In a settlement, seeing change may be what a plaintiff wants instead of money

Trend presents challenges but can be good opportunity for settlement

The bottom line for settling malpractice lawsuits long has been what numbers to put after the dollar sign. But that is changing fast. Where plaintiffs once focused entirely on the settlement amount, even when they had heartfelt grievances, today’s plaintiffs are much more likely to demand that you change whatever they think led to their tragedies. In some cases, promising to change policies and procedures isn’t enough. Plaintiffs sometimes demand to be directly involved in the improvement process by sitting on a review board or speaking with physicians and staff about their experiences.

If you haven’t yet encountered these demands for a noneconomic settlement, you soon will, says Martin J. Hatlie, JD, president of the Partnership for Patient Safety in Chicago and a frequent mediator for medical malpractice cases. Your response can determine whether the dispute escalates or is resolved in a way that leaves everyone satisfied. These plaintiff demands can be an opportunity if the risk manager responds appropriately, he says. "I think we’re seeing more of it, and it’s just beginning," Hatlie says. "There is so much dissatisfaction with how the legal system works in handling malpractice claims that I think we’re going to see much more."

Plaintiff wanted to prevent more errors

Noneconomic settlements are an opportunity for the health care provider to address the issues that most concern plaintiffs, says Susan Sheridan, who lives in Eagle, ID, and has been the plaintiff in two malpractice cases involving more than money. 

Sheridan’s pursuit of noneconomic settlements was spurred partly by her experience in suing one hospital for brain damage suffered by her child. "The experience showed me that litigation is a dishonorable process. I found that it had nothing to do with the truth or patient safety," she says. "It had nothing to do with compensating the people who really deserve it. It had to do with lawyers trying to out-lawyer each other and expert witnesses paid huge sums of money with no oversight."

Sheridan’s advice for risk managers: Look at requests for noneconomic settlements as the plaintiff offering to be a partner in improving patient safety. "They want to work with the institution. They’re not just out for money or revenge," she says. "You can establish a much less adversarial relationship with the plaintiff if you agree to sit down and discuss this up front. Risk managers may find that plaintiffs are more likely to settle if you offer some type of policy change or institutional change. It may reduce the payment because the plaintiffs will be fulfilled in areas they think are more important."

The focus on noneconomic damages is a by-product of mediation, Hatlie says. When plaintiffs request something other than money, they usually want the health care provider to change policy or implement a training program, he says. Research shows that plaintiffs want acknowledgment that something went wrong, an apology, and changes to ensure that the same tragedy doesn’t happen to another family, Hatlie says. Those are the feelings that lead to request for noneconomic settlements.

They want more than just a general promise that you will look into the situation and address whatever deficiencies you find. They want specific requirements written into the settlement. Most of the requests are reasonable, Hatlie says, and the defendant often is already making the changes requested. "We often see it as part of the defense, when they claim that they’ve done something to remedy this situation," he says. "But sometimes they’re reluctant to discuss it because it can look like an admission that they were negligent in the first place. A lot of times, it just amounts to putting it in the settlement document for the plaintiff and not necessarily doing something you didn’t want to do just because the plaintiff said to."

Good news if handled well

Though noneconomic settlements may seem like a challenge to risk managers and attorneys used to hammering out deals solely based on a dollar figure, Hatlie says they represent a good opportunity. "I think it’s a good development for hospitals because it is a new way for hospitals to negotiate. If they discuss some of these requests they might be able to settle the case for less than they would otherwise," he says. "There are some great settlement opportunities here; but if you just refuse to even mediate these requests, you may end up making the plaintiff even more angry than before and going to trial."

One risk manager who uses noneconomic settlements is Sheila Stieritz, RN, BSN, director of patient safety at Abington (PA) Memorial Hospital. Stieritz says she often discusses noneconomic issues with plaintiffs and finds them a way to make the negotiation more constructive. "Often, it takes the form of education classes conducted within the hospital, or some other sort of effort that addresses whatever the plaintiff thinks went wrong," she says. "We’ve had experiences in which this worked well to bring about a more cooperative feeling and helped everyone feel that they achieved something positive in the end."

Hatlie and Stieritz advise risk managers to be receptive when plaintiffs bring up the idea of noneconomic settlements. Don’t be defensive and react as if the plaintiff is stepping on toes and trying to run your hospital.

"Be open to it and evaluate it to determine if it is an opportunity to make a case go away faster and for less money," Hatlie says. "It’s new territory and not a lot of precedent yet; but if you can give plaintiffs an explanation and show them the change they want, you may be able to chase away a lot of lawsuits."

The most impact might be felt in cases where the patient has died and the family wants to see something positive come from the loss, he says. When the patient is alive and there is an enduring economic burden for ongoing care or lost wages, there will be less opportunity to negotiate noneconomic damages as an alternative to cash payouts. However, the family still may want noneconomic concessions in addition to the money.

Lawyers not likely to offer

Ideas for noneconomic settlements almost always originate with the plaintiffs, not their attorneys. Even when plaintiffs are eager for such an agreement, their own attorneys may resist the idea and discourage its pursuit. That’s what happened with one of Sheridan’s cases that Hatlie mediated. Hatlie says Sheridan’s attorneys kept saying, "You’re going to blow the settlement. The money is most important." Sheridan had to speak up herself to say the money was not her top concern. "The plaintiff’s attorneys want the money. They want to see the biggest possible award so they can get the biggest possible percentage," Hatlie says.

If the plaintiff’s attorneys don’t suggest anything, bring it up yourself, Stieritz suggests. She often does. Hatlie notes that in mediation, it usually is possible for the risk manager and plaintiff to have a direct dialogue; that is the time to ask if there is anything you can do besides the financial settlement.

Stieritz suggests it is best to wait until you get a sense for whether the plaintiff might be receptive to noneconomic settlement provisions before making any offer. You usually can tell right away if the plaintiff is interested in such changes or just wants money, she says, and don’t wait too long to bring up the subject. "Our experience has been that the sooner you make this kind of offer, the better it will be received and the more good you can do with it," she says. "If you wait until later when the negotiations are getting tough, it can be perceived differently, as if you don’t really want to offer it in good faith but you’re just doing using it as a tactic."

Stieritz says Abington looks at noneconomic settlements as something that should at least be considered in every negotiation with a plaintiff. In most cases in which they are used, she says they generate a feeling that some good came out of the situation. "These are plaintiffs who really do want to do something positive. They have a real altruistic side," Stieritz says. "It’s something we want to encourage and it fits with our efforts to constantly improve."

Sheridan urges risk managers to see noneconomic settlements as an opportunity for everyone to walk away satisfied. More than merely going along with the request, she says risk managers should actively work with the plaintiff to arrange a settlement of more than money.

This strategy isn’t a way for the hospital to avoid paying what you reasonably owe the plaintiff, but it is a way to keep that claim from escalating into something unreasonable. "Seize this opportunity with both arms, because this is a plaintiff who wants to be constructive and not destructive," she says. "If no one will listen to that plaintiff except their own attorney, the case can explode. If the hospital and risk manager will communicate and turn that error into something positive, I guarantee you it will be a much less adversarial experience and everyone will be more satisfied."