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Medical malpractice lawsuits plummet in Wisconsin [1]

['Cary Spivak']

Date: 2014-06-28 03:00:00+00:00

Video Sarah Schuh and Katherine Daniels discuss their problems finding a lawyer to pursue legal action after their mother died following apparent medical errors. Video by Rick Wood

Three years after her mother died, Sarah Schuh received a shocking call: It wasn't the car accident that had killed her mom, the caller said. She died because of "mess-ups" in the emergency room.

The caller: Zulfiqar Ali, the emergency room doctor who had treated Schuh's mother on the day she crashed her Honda CR-V into a marshy area near the Sheboygan River.

In almost any other state, that kind of disclosure would have likely paved the way for a medical malpractice lawsuit.

Not in Wisconsin.

State laws and court rulings have combined to erect roadblocks at the doors of Wisconsin courthouses, placing strict limits on who can sue for medical malpractice, how much money they can collect and where the money will come from.

"There is no medical malpractice in Wisconsin," said Charles Stierman, once a top Milwaukee malpractice lawyer who stopped taking such cases in 2000. "Who wants to tilt at windmills?"

The number of medical malpractice lawsuits filed in Wisconsin fell to 140 last year, a drop of more than 50% since 1999, court records show. Malpractice lawyers blame the decline on state laws that they say are skewed in favor of doctors and hospitals; medical groups contend that malpractice suits have declined because health care professionals have gotten better at their jobs.

At the same time, a state-run malpractice insurance fund — created because of fears that medical malpractice insurance premiums would skyrocket without it — has grown to more than $1.15 billion, a total larger than all the money it has paid out during its entire 39-year history.

Insurance fund soars, claims fall Wisconsin's state-run medical malpractice fund has grown to more than $1 billion since 1999 as state laws clamp down on malpractice claims. Injured Patients and Families Compensation Fund assets vs. claims paid

(Fiscal year ends June 30) Source: Wisconsin Injured Patients and Families Compensation Fund

Yet Schuh and her brother and sister are unable to sue for medical malpractice in the death of their mother, Colleen Daniels, because a state law allows only spouses and minor children to sue for loss of companionship in a medical malpractice death case.

Daniels was divorced, and the youngest of her three children, Katherine Daniels, was 18 — no longer a minor, although she was living at home and attending Kiel High School when her mom died.

So today, even though state regulators have said their mother died after a breathing tube was mistakenly inserted into her esophagus — her food pipe — instead of her windpipe, Wisconsin's legal system offers Daniels' children no relief.

"They should have to pay for what they did to her and what they've done to us," said Katherine Daniels, now 21, and expecting her first child. "I mean, I was so young."

Florida is the only other state with a similar ban.

No such ban exists for other wrongful deaths in Wisconsin, such as those caused by drunken drivers or other negligent acts. In those types of cases, Daniels' grown children would have had every right to file a lawsuit.

"The rule would not apply if you died because you were hit by a Pepsi truck or a Coke truck," said Paul Scoptur, a Milwaukee plaintiffs' lawyer and trial consultant. "To deny accountability when someone is killed is wrong."

An unnecessary death

Daniels lost control of her Honda CR-V for unknown reasons while driving on Highway 67 on March 19, 2011. It flipped over a guardrail and landed in a marshy area near the Sheboygan River. Emergency personnel performed CPR to revive her at the scene and took her to Calumet Medical Center in Chilton, where she was alert.

Her daughters happened to drive by the accident scene shortly after their mother had been rushed to the hospital. "I just saw them pulling her car out of the river....I was hysterical," Katherine Daniels recalled.

By the time they arrived at the hospital, Schuh said, Ali, the emergency room doctor, told them their mother had taken a dramatic turn for the worse: Her heart had stopped beating, and she had a 1% chance of living.

Daniels was rushed via helicopter to Theda Clark Medical Center in Neenah, where she died three days later.

In interviews with the Milwaukee Journal Sentinel and in testimony before the state Medical Examining Board, Ali repeatedly acknowledged that errors were made in treating Daniels and described a hectic scene at the Calumet emergency room that included arguments with a paramedic and others over whether the doctor had mistakenly inserted a breathing tube into Daniels' esophagus. Ultimately, a paramedic inserted a second tube into Daniels, without Ali's permission, because he believed the doctor had erred.

Although he called Schuh three years later to tell her that mistakes had been made, Ali denies making any errors himself.

A hospital review committee reviewed Ali's actions and concluded that " the patient died and there was significant variation from the standard of care that was preventable," according to a 2011 letter to state regulators from Mark Kehrberg, chief medical officer at Affinity Health System. Calumet Medical is part of Affinity.

Affinity, through a public relations agency, declined to comment because of "pending legal action involving Dr. Ali." Ali was fired by the hospital shortly after treating Daniels and is suing for discrimination. Kehrberg's letter states that Ali was not fired because of the Daniels case.

The billion-dollar cushion

Because Wisconsin laws are unusually protective of doctors and other health care professionals, it is often difficult to find a lawyer willing to consider taking on a medical malpractice case.

One of the biggest roadblocks, lawyers say, is the state's malpractice insurance fund, called the Injured Patients and Families Compensation Fund.

Its assets have ballooned from $501 million in June 1999 to more than $1.15 billion in March of this year. Doctors, hospitals and others in the health care industry are required to pay into the fund, which in turn pays malpractice claims and verdicts that exceed $1 million.

Fund officials argue the money is needed in case a series of medical mistakes results in major payouts. But malpractice lawyers say the huge treasury instead enables private insurance companies to dig in and fight claims even when malpractice is obvious, because the most a private insurer would have to pay out if it lost a multimillion-dollar verdict is $1 million.

"They've adopted a scorched-earth approach" to fighting claims, said Eric Farnsworth, a Madison lawyer who represents plaintiffs in medical malpractice cases.

The defense won more than 90% of medical malpractice cases that went to verdict nationwide from 2008 to 2012, according to a survey by PIAA, a trade organization for the medical malpractice insurance industry.

Plaintiffs received awards in four of the 18 cases decided by Wisconsin juries last year, according to state Medical Mediation Panels records. The biggest jury award was for $1.8 million, although that was lowered to $250,000 because of a state law limiting damages on state employees.

So it makes sense for insurance companies to fight claims in Wisconsin instead of simply paying them or settling cases out of court. "It's not a large gamble, especially when you consider the percentage of cases won" by plaintiffs, said Michael Matray, editor of Medical Liability Monitor, a Chicago-based trade journal. "It's ridiculously low."

While insurance companies fight medical malpractice complaints throughout the country, there is more pressure elsewhere to settle them out of court, because going to trial could result in a mega-verdict, which in turn can trigger even messier legal actions. Wisconsin's Patients Compensation Fund eliminates those concerns.

Mediation requests plummet Requests for mediation in Wisconsin medical malpractice cases have fallen dramatically. Lawyers say the drop is caused by a series of legal moves, including the creation of caps on the amount of damages a jury can award a victim of malpractice. Number of requests for mediation in Wisconsin

(Mediation must be requested before a lawsuit can be filed.) Source: Medical Mediation Panels

"The fund has a huge effect on the overall Wisconsin medical liability market — no question about it," said Howard Friedman, president of the health care professional liability group for ProAssurance Corp., an Alabama firm that has the largest share (nearly 30%) of the medical malpractice insurance market in Wisconsin. "It enables the stability of the market because you don't have the shock losses."

Friedman and other insurance executives say their companies pay claims for medical malpractice that are justified without putting the claimant through a wringer. But if a doctor argues against settling, the insurer considers it good business to listen to the client — the doctor.

"We're a company that defends physicians," Friedman said. "That's our reputation."

The state malpractice insurance fund provides unlimited coverage to more than 15,600 physicians, hospitals and some other health care providers. It was created in 1975 amid fears that a crisis in medical malpractice insurance would strike Wisconsin and make it difficult to keep good doctors here.

Seven other states have similar funds. Wisconsin, though, is the only state where every doctor and hospital must pay premiums into the fund and where victims of medical malpractice are guaranteed to collect the full judgment awarded, including lost future wages.

Wisconsin medical malpractice payouts well below national average From 1991 through 2012, an average of 46 cents out of every premium dollar collected for medical malpractice insurance in Wisconsin was spent to defend or pay claims, far below the national average of nearly 82 cents. (The payouts do not include some other costs, such as administrative expenses, which can reduce or eliminate underwriting profits.) Average payouts for medical malpractice claims and associated costs, in cents, for every premium dollar collected, U.S. vs. Wisconsin

Note: Wisconsin's average is the lowest in the nation. Source: National Association of Insurance Commissioners

Hidden assets elsewhere

Patricia Epstein, a Madison attorney who represents health care providers and who used to practice in New York, said physicians in that state will sometimes put ownership of their homes in a spouse's name to protect the property from litigation.

Also, Mark Grapentine, lobbyist for the Wisconsin Medical Society, notes that in other states, physicians' trade groups hold seminars teaching doctors how to hide their assets from verdicts. Here, there is no risk of losing a home, even in a rare mega-verdict.

"Wisconsin is a very good state for doctors and protecting their personal assets," Epstein said.

Grapentine considers the fund good for doctors and patients, because it protects doctors while ensuring that a wronged patient will actually be paid any large, court-ordered award. "In some states you'll have a gigantic award given to a plaintiff who will then exit the courtroom and look around and there's no one there to write the check," he said.

Before injured parties can receive a nickel from the fund, however, they must first collect $1 million from a medical malpractice insurance company, which is no easy task.

"These cases always become a World War III battle," said Patrick Dunphy, a Brookfield plaintiffs' lawyer. "That raises the costs. Combined with the caps and the difficulty of winning medical malpractice cases, the ultimate effect is that there is decreased access to the courthouse."

Collecting on a medical malpractice claim has gotten more difficult nationwide — the number of claims paid dropped 39% from 2003 to 2013. In Wisconsin, the decline was more than 66%, according to the National Practitioner Data Bank, a registry maintained by the federal government.

Meanwhile, the number of issues reported to the federal database increased substantially. The issues — known as adverse actions — include reports of medical errors, loss of privileges and disciplinary actions. In Wisconsin there were 38 adverse action reports involving doctors filed in 2003, a figure that increased to 105 in 2013.

Error reports rise, payouts drop "Adverse action" reports, documenting issues such as medical errors resulting in disciplinary action or loss of hospital privileges for a doctor, have been rising. At the same time, payments to medical malpractice victims have fallen nationally and in Wisconsin. Reports of errors (adverse actions) compared with medical malpractice payments, Wisconsin vs. U.S. Note: Figures are for physicians only Wisconsin National Source: National Practitioner Data Bank

Dunphy, though, has shown that under certain circumstances, large malpractice awards are possible in Wisconsin. In 2008, he won a $35.3 million jury verdict on behalf of a newborn who suffered a severe brain injury because of an error by a Waukesha Memorial Hospital nurse.The bulk of the award was for medical costs, a category that is not capped by state law.

From its inception in 1975 through the end of 2013, the state's malpractice insurance fund has paid 667 claims totaling $845.7 million, with the amount paid varying widely from year to year.

It paid out $23.5 million to five people in the fiscal year that ended June 30, 2013.

The fund is so rich that if it had to pay every claim currently pending — plus the claims that its actuary anticipates may be filed — it would still have $532.3 million in its coffers.

Regardless, Randy Blumer, a former deputy insurance commissioner whose term on the fund's 13-member board recently ended, rejects the suggestion that the fund is too big. Blumer said it is difficult to predict how much money the fund needs because malpractice claims frequently are not paid until several years after the event occurs. "It is similar to predicting weather patterns," Blumer said.

Still, the board is lowering the premium rates by 10% effective Wednesday. Physicians will pay annual premiums to the fund of between $1,311 and $8,653 depending on their specialty and the amount of surgery they perform.

Limiting the damage

Malpractice market a boon for insurers Wisconsin boasts the healthiest medical malpractice insurance market in the nation. Insurers in the state posted an underwriting profit — a profit measured as a percentage of premiums — of 77.5% in 2012, the highest in the nation and seven times the national average, according to data from the National Association of Insurance Commissioners. The state's medical malpractice insurance industry posted a return on net worth of 28.2% — second only to Nevada. In addition, from 1991 through 2012, Wisconsin insurers spent an average of 46 cents in claims, expenses and defense costs for every premium dollar they collected — the lowest in the nation, according to the insurance commissioners' data. Nationally, the average was 82 cents paid for every premium dollar. As a result, Wisconsin premiums paid by Wisconsin doctors are among the lowest in the nation. An obstetrician practicing in Milwaukee or Dane counties paid up to $34,677 for $1 million worth of coverage last year, according to the Medical Liability Monitor. The same coverage cost up to $177,441 in Cook County, Ill., $46,103 in Iowa and $22,950 in Minnesota. Minnesota and Wisconsin are both known to have juries that are less likely to award large damages to a plaintiff. — Cary Spivak

Also working in doctors' favor in medical malpractice cases is Wisconsin's $750,000 cap on "noneconomic" damages — for instance, claims that malpractice caused pain and suffering or loss of companionship. Wisconsin is one of about 35 states with such caps, according to A.M. Best Co., an insurance company rating firm.

Wisconsin has had various ceilings on medical malpractice damages since 1986. A $350,000 cap was enacted in 1995, which with inflation adjustments rose to $445,775 before it was struck down by the state Supreme Court in 2005 as being arbitrary and violating the equal protection provision of the state constitution.

State lawmakers led by then-Rep. Curt Gielow (R-Mequon), a former hospital administrator, then approved a $450,000 cap that was vetoed by then-Gov. Jim Doyle. The Democratic governor ultimately approved the $750,000 cap in 2006.

Gielow, now chief executive at Concordia University's campus in Ann Arbor, Mich., said in an interview that caps are needed "to give surety to the insurance market."

The state also caps noneconomic damages in any wrongful death case at $500,000, and it bans punitive damages in medical malpractice cases.

The cap on malpractice damages is even lower if the doctor is employed by the state, a category that includes the more than 1,350 who practice at Madison's University of Wisconsin Hospital and Clinics or associated facilities. Because the UW doctors are state employees — all state employees are covered by the cap — the ceiling on damage awards of any type is $250,000 per defendant, a cap that applies even if a doctor's negligence results in a lifetime injury that will require millions of dollars of future treatment.

"This is a great place to be a physician," said Farnsworth, the Madison lawyer, who is challenging the $250,000 cap in appellate court. "They have de facto immunity."

Milwaukee lawyer Ric Domnitz argues that all of the damage caps lack logic.

The cap would not apply if a doctor — or any other person — gets drunk, climbs behind the wheel of a car and runs over a pedestrian, resulting in the victim's becoming a paraplegic, Domnitz said. If the same injury were to result from negligence during surgery, even if the negligence were caused by drug or alcohol use, the noneconomic damages would be capped.

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"If you're given the privilege of practicing medicine...how are you on the hook for less money than if you make a mistake and you roll through a stop sign or you blow through a red light?" Domnitz said. In the car accident, "you're on the hook for everything. But the same guy gets protected with a $750,000 cap if he injures you with a scalpel in his hand."

In most cases, lawyers for plaintiffs take medical malpractice cases on a contingency basis, meaning they get paid only if they win. The lawyers generally pay the expenses required to bring the suit — money that is recouped only if they win.

It generally costs at least $60,000 to bring a medical malpractice lawsuit, a figure that could easily hit six figures if the case goes to trial. So attorneys say they frequently shy away from cases that do not have a large amount of economic damages, such as medical bills or lost wages.

The fees that lawyers can receive in a medical malpractice case are also capped by state law. They are limited to one-third of the first $1 million won, plus 20% of any awards over that amount. If a case is settled within 180 days, the top fee drops to 25%. Attorneys' fees in other lawsuits, such as car accident claims, are not capped.

"Ultimately law is a business," said Ann S. Jacobs, a Milwaukee plaintiffs' lawyer who is president-elect of the state's trial lawyer association. " ...So if it's going to cost you $60,000 to $80,000 in costs but the most you're going to get in fees is (about) $200,000 and costs or a little less, it's not a great investment."

The number of medical malpractice lawsuits filed in Wisconsin dropped from 294 in 1999 to 140 last year.

The decrease has driven some lawyers out of the medical malpractice litigation business. "They're not as willing to take them on as they were many years ago partly because (of) the caps," said James Gutglass, a veteran Milwaukee defense lawyer.

Video James Gutglass, a veteran Milwaukee defense lawyer, describes Wisconsin's current medical malpractice system.

While lawyers contend that's largely because of the strict state laws, Ruth Heitz, general counsel for the State Medical Society, said doctors and hospitals should get much of the credit.

"Some of the decline in cases is due to doctors' getting it right, doing the right kinds of things," Heitz said. "There are fewer incidents of medical negligence."

Heitz argues that the caps and other tort reforms are needed to keep the Wisconsin health care system strong.

The Wisconsin system "works fairly well for almost everyone," Heitz said. "There are some claims that are excluded, but in looking at the entire picture for the medical liability system, it tries to strike that balance so that you have health care access."

A circuitous route

That is a tough argument for the children of Colleen Daniels to accept. Before her death, Daniels worked two jobs, and the family's home was in the midst of foreclosure — and Katherine Daniels says the situation has deteriorated since her mother's death.

"My mom was my biggest financial supporter," said Katherine, now 21 and a housekeeper at the Osthoff Resort in Elkhart Lake.

On the last day before the statute of limitations on the case would have expired, a highly regarded medical malpractice lawyer, Michael End, reluctantly agreed to file a request for mediation on behalf of the family. State law requires the request for mediation before a medical malpractice lawsuit can be filed.

Video Michael End, who is representing the estate of Colleen Daniels, talks about the family's experience under the current medical malpractice system.

End is mapping a circuitous route to the courthouse by seeking a pain-and-suffering award for Daniels' estate, thus bypassing the ban on suits by adult children.

"Mike End is the patron saint of lost causes," said Stierman, the lawyer who stopped taking medical malpractice cases in 2000.

It's not an easy case. Not only will End have to prove a breathing tube was put into Daniels' esophagus; he'll also have to convince a jury that Daniels was aware of the error and felt the air surging into her stomach. He'll also try to prove that Daniels heard Ali, the ER doctor, and others argue over whether she was being treated properly.

Without that, it will be difficult to show that she suffered and collect damages on behalf of the estate.

"It's much more difficult to prove pain and suffering than it would be to show loss of companionship," End said.

Even if he wins, state law caps the award at $750,000, a portion of which would pay End's fee and expenses.

'Absolutely wrong'

Daniels' children would never have reached out to End had Ali not contacted Schuh in March. Ali said he made the call because he felt the family should know what happened.

Video Dr. Zulfiqar Ali, the emergency room doctor who treated Colleen Daniels, says he put the breathing tube in correctly.

He said that even he was amazed to learn later that Daniels' children could not sue him directly.

"To me it was unimaginable," Ali said during an interview at the recently opened Lisbon Urgent Care in Milwaukee, where he was practicing until last week. "I personally think it is absolutely wrong.

"If a patient survives, then they can sue me," Ali said, waving his arms in disbelief at the situation. "If a patient dies, then it is less liability on me."

Ali's medical license was suspended Wednesday by the state Medical Examining Board, after the state's expert witness, an emergency medicine physician, concluded that Ali had inserted a breathing tube into Daniels' esophagus, depriving her of oxygen for more than 30 minutes.

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[1] Url: https://archive.jsonline.com/watchdog/watchdogreports/medical-malpractice-lawsuits-plummet-in-wisconsin-b99290329z1-264436841.html/#:~:text=At%20the%20same%20time%2C%20a%20state%2Drun%20malpractice%20insurance%20fund%20%E2%80%94%20created%20because%20of%20fears%20that%20medical%20malpractice%20insurance%20premiums%20would%20skyrocket%20without%20it%20%E2%80%94%20has%20grown%20to%20more%20than%20%241.15%20billion%2C%20a%20total%20larger%20than%20all%20the%20money%20it%20has%20paid%20out%20during%20its%20entire%2039%2Dyear%20history

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