Defeating the malpractice crisis with standardized review of expert opinions.

Some states and politicians tout tort reform as the solution to the malpractice insurance rate crisis rocking U.S. health care. But is tort reform really enough?

Tort reforms with caps on non-economic damages slow the rising trend in malpractice insurance premiums. Other reforms in legislation such as graduated contingency fees, lowering of the statute of limitation, collateral source rules, medical injury compensation funds, etc. complement tort reform.

However, because of legislative obstacles, many states are reluctant or unable to sufficiently limit non-economic damages or to combine them with these other factors. (1) Consequently, malpractice premiums are still increasing by more than 20 percent a year--even in some states that have tort reforms, such as Maryland and Virginia. (2)

Data from the General Accounting Office and other sources (3, 4) conclude that, although multiple variables combine to increase medical malpractice premium rates, the increasing total cost of claims is the only variable that statistically correlates with increasing premiums. This relationship is key to the understanding of the unifying cause for the cost of premiums and a path to a durable solution, a solution that is also within the power of the medical profession to influence.

Included in total cost of claims are costs originating from expert opinions. Once opposing opinions are proffered by experts, costs begin to accrue for malpractice insurers.

Differences of opinions between medical experts occur for two reasons:

1. Intellectual differences, which are opposing but supportable interpretations of the same data or factual information

2. Errors, which are unsupportable distortions of data or factual information

Sometimes the medical record is a source of error because of flawed documentation. Under this condition, the error is an internal threat to validity and would equally affect opinions from experts on both sides of a case.

However, a more odious source of error is the medical expert himself. Under this circumstance, error is an external threat to validity because of an expert's bias, general knowledge, ability and motivation.

In medical malpractice, it is easy to confuse error with validity. This is because experts on both sides of a malpractice case are required to render opinions about the standard of care to a reasonable degree of medical certainty. Statistically, this burden of proof is ambiguous since only 50 percent plus an additional ill-defined quantum of certainty is necessary to satisfy the judicial threshold for either side.

Essentially, this is a level of confidence that is actually uncertainty and can influence medical experts, intentionally or unintentionally, to distort data. To further complicate decision making, 50 percent plus a quantum more of certainty is also the jury instruction for a preponderance of the evidence, which is the standard deciding a medical malpractice case. (5)

Undeniably, error is a cause of frivolous lawsuits, however, not every misinformed jury verdict is a frivolous lawsuit. Although there are many factors that sway jurors, error in expert testimony can and does influence misinformed verdicts and is not limited to one side of a case or another. Nor are the credentials, position and power of experts a factor in reducing error, although they might be a factor in amplifying it.

Error can be found in all opinions regardless of the merit of a lawsuit. The distortion of data itself does not constitute a frivolous claim. However, once an error is known, the predisposition to exploit the ambiguity of the law to intentionally present this distortion as evidence is certainly part of a frivolous claim.

The United States Supreme Court essentially acknowledges this ambiguity in evidentiary reliability in Daubert vs. Merrell Dow Pharmaceuticals. (6) It ruled that, faced with a proffer of expert scientific testimony, the trial judge must make a preliminary inquiry of whether the testimony's underlying hypothesis or methodology is scientifically valid, has been or can be tested, is consistent with peer review and accepted science and has a quantifiable error.

In effect, the Supreme Court concedes that a reasonable degree of medical certainty, itself, lacks a certain amount of verification. To overcome this deficiency, the Supreme Court holds expert opinions to the same standards used in the scientific method for testing the validity of a hypothesis. The purpose of the scientific method is to examine the influence of error on conclusions and using it by testing the null hypothesis behind a medical malpractice case should expose the error-prone opinion of some medical experts.

When understood from this position, error in an expert's opinion is the common attribute that ultimately leads to misinformed jury verdicts for both sides and this, in turn, increases the total cost of claims for a malpractice carrier regardless of who succeeds in the courtroom. So a unifying cause of avoidable costs to a malpractice carrier is error-prone opinions from some medical experts.

Economic strategy

Tort reforms, as conceived of and enacted today, have limitations on non-economic damages as their common denominator. This manages total cost of claims at the affect of the crisis, namely damages, by limiting non-economic damages in all lawsuits to offset the affect of non-economic damages in misinformed verdicts. Consequently, tort reform is damage control.

However, focusing on error as the cause of misinformed jury verdicts goes directly to the origin of avoidable costs to malpractice carriers and, therefore, is risk management rather than damage control.

Total costs of claims are born by malpractice carriers. In addition to the money paid to claimants, they also include the contingency fees and transaction costs for all misinformed plaintiff verdicts and all the legal costs for defendants, who are responsible in bona fide lawsuits, whether or not they succeed in court. In both instances, these costs result from the extremes to which medical experts on both sides resort in attempts to exploit error in order to substantiate their opinions and repudiate the opinions of opposing experts.

Although depositions, status conferences, settlement hearings and pretrial conferences are designed to inquire about error, they do not adequately expose attempts to exploit it. Therefore, a strategy that specifically concentrates on the error-prone opinion, which is also consistent with the Daubert decision, would complement tort reforms, assist existing legal processes and reduce total costs of claims. In turn, this should produce downward pressure on malpractice premiums.

There are three components to this strategy:

1. A means of objectively demonstrating error in expert opinions

2. A performance measure linking error-prone opinions to total cost

3. Existing statutes in the law that make the other two components work

Determining error-prone opinion

While all specialty organizations have guidelines for ethical medical testimony, there is no standardized methodology that is designed to objectively qualify an expert's opinion. So the first concept in this strategy is a method that defines the rules for the statistical validation of an opinion and does so by having each expert test the null hypothesis of any malpractice case. (7)

The generic null hypothesis states that, under the circumstances specific to the allegation of malpractice, the risk of the occurrence for an adverse outcome consequent to treatment is not significantly different from the background risk of its occurrence consequent to random chance.

After reaching an opinion, experts would prepare reports either retaining or rejecting the null hypothesis by showing quantitatively in a standardized format how and why the risks of causing the adverse outcome, which are intrinsic to the actual treatment, were statistically the same as or different from the background risk. Hence, the data being observed and measured are risks.

The observed background risk for any adverse outcome is a known constant. Theoretically, it includes all adverse outcomes, avoidable and unavoidable. Regardless of what the observed background risk might be, the relative background risk is always 1.0. All treatments in question have relative risks, which might or might not be the same as the relative background risk, and indeed several treatments might be equally safe and effective, each having a relative risk of 1.0.

However, there is always a hypothetical safest effective treatment specific to the same or a similar patient, presenting with the same clinical circumstances at the same place and time, which has the relative background risk of 1.0. Experts, themselves, determine this hypothetical safest effective treatment as a benchmark against which the actual treatment is compared.

Both the actual and the hypothetical treatments are divided into seven distinct phases.

1. The pre-treatment phase is the work-up.

2. The evaluation phase is the diagnosis.

3. The discrimination phase is the identification of alternative treatments.

4. The informed consent phase is the education of the patient about these alternatives.

5. The selection phase is the choice of the most appropriate treatment.

6. The technical phase is employment of treatment.

7. The resolution phase is the follow-up.

Each phase has a relative risk that contributes to the overall treatment risk and could be intuitively estimated from an expert's knowledge and experience.

First, experts determine the relative risk of each of these phases for the safest effective treatment. However, to assure that the adverse outcome following the safest effective treatment is always a random occurrence, none of its phases can have a relative risk exceeding 1.0, although they could be less.

Next, the relative risks for the seven phases of the treatment in question are determined by comparing and contrasting them to corresponding phases of the safest effective treatment. These relative risks are equal to or greater than those in the safest effective treatment but are never less. Experts must document their rationales for these seven determinations in the written report.

Once the relative risk of each phase of the treatment in question is determined, the actual observed risk for each phase is calculated (relative risk of the phase X observed background risk in the population = observed risk of the phase). As a result, any actual treatment could be among other safe and effective treatments; however, this is tentative until the null hypothesis is statistically tested.

Testing this sample of the seven observed risks in the treatment in questions determines if the actual treatment is statistically different from all those treatments in which the adverse outcome was unavoidable and caused by random chance.

The one sample t-test (upper tail) is used for this analysis. The level of significance, or oe (alpha), is 0.5, the statistical counterpart to reasonable degree of medical certainty, and the mean for the null hypothesis is the observed background risk of the adverse outcome in the population. Although other alphas are more specific for negligence, 0.5 is an explicit convention of tort law and cannot be changed. The result is the p-value.

When the p-value is less than oe, the null hypothesis is rejected. This indicates that the adverse outcome is not a random event and results from treatment. When the p-value is equal to oe, the null hypothesis is retained. This indicates that the risks of the treatment in question are not significantly different from the background risk in the population and the adverse outcome is a random occurrence and unavoidable.

Determining the performance measure--the cost driver

The second concept is the cost driver for uncertainty. Uncertainty is the unpredictability of total cost of claims to a malpractice carrier from one year to the next. Uncertainty triggers the price for liability insurance premiums.

A cost driver is an accounting computation that considers all activity costs arising from uncertainty divided by some attribute that is common to all those activities. (8) The common attribute for uncertainty is the error-prone opinion. So the cost driver is dollars per error-prone opinion. This cost driver serves as an objective performance measure for the impact of legal processes on uncertainty. (9) The higher the cost driver, the greater the uncertainty.

It focuses attention on avoidable litigation costs, inefficient legal processes, misinformed verdicts and unjustified awards. Figures 1 and 2 show how dollars per error-prone opinion are calculated.

When all factors are considered in the cost driver equation, tort reforms only influence three of them, namely, net dollars to plaintiffs, contingency fees and savings in verdicts. All tort reforms reduce net dollars to plaintiffs and result in savings in verdicts because of caps on non-economic damages; however, with few exceptions, compensatory damages are not limited.

Some tort reforms reduce contingency fees by a regulated fee structure graduated to the total award; however, plaintiff transactions costs and all defense legal costs are not under the influence of tort reform.

On the other hand, management of error-prone opinions on both sides of a malpractice case would influence virtually all factors in the cost driver equation, either directly or indirectly. So management of this one factor dramatically decreases the cost driver for uncertainty.

Existing statutes in the law

Rule 11 of the Federal Rules of Civil Procedure (10) sets conditions for filing only valid lawsuits. Pleadings to the court are certification that a lawsuit is filed only after a reasonable investigation of the facts determines that the allegations have evidentiary support or are likely to have evidentiary support after discovery.

However, in 1991, Brennan, et al, (11) examined 31,000 medical records in New York State in which there were 1,100 diagnoses consistent with negligent events from which lawsuits could be anticipated to originate. Of this number, only a fraction cross-referenced with the actual number of malpractice cases filed in New York State in a corresponding time period. This fraction represented 10 percent of all lawsuits filed. As a result, many valid lawsuits are not filed and 90 percent of those cases that are filed arise from injuries that are not usually associated with negligent events.

Among this 90 percent would include all the invalid cases from which misinformed jury verdicts might result. Because invalid claims would necessarily have to be supported by opinions from medical experts if they were to continue, this study implies a high percentage of error-prone expert opinions in medical malpractice cases.

Rule 11 also sets the conditions for frivolous lawsuits. A frivolous lawsuit is one that is invalid yet filed or continues to be prosecuted for improper purposes even when an attorney has knowledge that there is no evidentiary support.

There are sanctions for frivolous lawsuits. However, since the intrinsic ambiguity in a reasonable degree of medical certainty obscures the influence of error on the threshold of proof, there is no way of objectively proving whether or not a lawsuit is frivolous. So unless attorneys and experts introduce error with overt impunity, they are generally not held accountable for error.

If, however, medical experts on both sides of a case would evaluate the validity of their own opinions, judges and opposing attorneys and experts would be parties to expert reports on both sides because reports of this nature are discoverable. They would also be parties to an expert's sources of error, whether general ability, knowledge, motivation or bias, because any unjustifiable exaggeration or underestimation of a relative risk is patently obvious in this methodology. So all parties have a means to objectively inquire about the validity of an expert's opinion based on how the expert adhered to the rules of the standard methodology.

This is in complete agreement with the Daubert decision that states that the focus of such an inquiry must be solely based on principles and methodology of decision making, not on the conclusions they generate.

When a verifiable error-prone opinion is exposed and the underlying theory of a case is objectively shown to be based on error, the decision to continue it is no longer a matter of tactics (12) or ethics (13) but, rather, a matter of the law, namely Rule 11. A plaintiff attorney cannot wantonly litigate a lawsuit knowing that it is founded on objectively proven errors. To do so fulfills the criteria for a frivolous lawsuit and invites sanction.

While a defense attorney is ethically obligated to passionately represent a client, Rule 11 also specifies the conditions for filing a response to a complaint. The filing of a response certifies to the court that, after a reasonable investigation of the facts, the denials of factual contentions are warranted on the evidence. So when a defense attorney has knowledge that the opinion of his or her medical expert is objectively proven to be erroneous, his or her client is best represented by an early settlement.

Since this strategy relies heavily on written reports, there is ample precedent for expert reports. (14) Medical expert reports are required in some states, such as Pennsylvania; in fact, these reports are the only discovery of expert opinions before trial. Other states require affidavits of merit from medical experts before a lawsuit could be filed. Many tort reforms contain requirements for affidavits of merit.

Presently, reports and affidavits of merit are only the opinions of medical experts and fall short of any validation for the opinions. However, there is no prohibition preventing professional organizations, such as the American Medical Association, from adopting standards for medical experts that include reports validating their opinions in a similar fashion to the model.

In fact, setting professional standards is an indisputable, explicit, legitimate and authoritative power of the medical profession. (15) It needs neither legislation nor the approval of any other interest group involved in medical malpractice. This does not imply that there would be no resistance from these interest groups. However, resistance would be futile because it would mean opposing something everyone wants, namely, valid opinions from medical experts.

Capital example

What if this strategy was adopted by medical leaders in a place like the nation's capital? The public endorsement of a standard of practice for medical experts by physician leaders in the District of Columbia would have immediate consequences by raising the bar for expert opinions. It would create the expectation for experts on both sides of a malpractice case to use this methodology.

Consequently, during status hearings and settlement conferences, judges would inquire of both defense and plaintiff attorneys how respective medical experts tested the validity of their opinions. In fact, the Daubert decision empowers judges to do so.

The long-term economic consequences of this strategy are demonstrated by using data to reproduce the uncertainty that a prominent malpractice insurance company, NCRIC, faced in Washington D.C. in 2001.

Because its financial report commingles losses from Washington, D.C. with losses of other states where NCRIC also does business, certain data pertaining to the District of Columbia are not found in this statement. Nevertheless, they are extrapolated from other sources. So this analysis is a reasonable approximation of NCRIC's data synthesized from NCRIC and these other sources.

Data for D.C. show that, in 2001, NCRIC tried 20 cases and settled two others out of court. The 10:1 ratio of litigated to settled cases in NCRIC's data is noteworthy when compared to the opposite industry-wide trend and suggests an internal disposition for NCRIC not to settle cases.

Of the 20 cases litigated, five (25 percent) resulted in plaintiff verdicts, 13 (65 percent) ended in defense verdicts and two ended in a mistrial or a hung jury. (2) Data from the National Practitioner Data Bank show that in 2001 the mean medical malpractice payment (settlements and awards) in the District of Columbia was $630,473, which was the highest in the nation. (16)

The American Academy of Actuaries has national data showing that defense costs averaged $86,000 per claim when the defendant prevailed at trial, $91,000 when the plaintiff prevailed, $40,000 when a suit was settled and $17,000 when a case was dismissed. (17) Finally, the Council of Economic Advisers has data showing that non-economic damages are 24 percent of plaintiff verdicts in all malpractice cases. (18)

From these sources, it is estimated that the total cost of claims for NCRIC to defend and indemnify physicians in the District of Columbia in 2001 was $6,238,311 of which $756,568 were non-economic damages (Table 1). This does not include the defense costs for those cases that were dropped or dismissed in 2001 ($17,000 per case); nor does it include payments on claims from earlier years. So the first factor in the numerator of the cost driver equation, total litigation costs, is $6,238,311.

NCRIC's financial report also indicates that only one of the five plaintiff verdicts in 2001 exceeded its reinsurance threshold of $500,000. Under this circumstance, the total plaintiff verdicts of $3,152,365 are assumed to include four that are no greater than $500,000 and one that is at least $1,152,356.

In the 22 cases decided in 2001, there are 44 opinions, one on each side of a case. Since these were never examined, there is no way of knowing how many were error-prone. Although Brennan et al, showed a disproportionately high percentage of potential non-meritorious cases among all cases filed, let's assume that 90 percent of the opinions behind the NCRIC experience were justifiable and, if tested by the above methodology, were not distorted by extremes.

That means only 10 percent, or four opinions, patently underestimated or exaggerated risks for either side. It also assumes that these four opinions would result in misinformed jury verdicts. Furthermore, of these four error-prone opinions, two are from plaintiff experts and two are from defense experts, which gives equal weight to misleading assertions on both sides of a case. These four error-prone opinions are the denominator of the cost driver equation.

Exposing the two error-prone opinions of plaintiff experts could have saved NCRIC $1 million in potential verdicts (assuming that the single $1.15 million verdict was a meritorious case) and $148,000 in defense costs (Table 2). When the two error-prone opinions of defense experts are exposed, NCRIC could have saved $212,189.

Since legal transaction costs of the plaintiff influence an acceptable settlement, the earliest possible settlement limits these expenses and plaintiffs could be persuaded to accept offers 20 percent below what a settlement or a jury verdict might be a year or more later.

This saves money for NCRIC. Part of this saving would be offset by defense legal costs. However, because of the ability to reconcile outstanding issues with plaintiffs in half the time and with half the difficulty, the $40,000 legal cost for settlements could be decreased by 50 percent. This results in a net saving of $212,189 (Table 2).

Under these circumstances, in 2001, the total cost to the malpractice carrier after correcting for error-prone opinions is $6,238,311 - ($1,000,000 + $148,000 + $212,189) = $4,878,122. This is the second factor in the numerator of the cost driver equation.

Hence, the cost driver for uncertainty is ($6,238,311 - $4,878,122) + 4 error-prone opinions = $340,047 per error-prone opinion.

The purpose for calculating the cost driver is to determine a performance measure, not to prove that these savings are the actual savings to NCRIC. In effect, the cost driver is the opportunity cost to NCRIC for not reconciling error-prone opinions.

As an objective performance measure, $340,047/error-prone opinion sends strong signals about avoidable litigation costs, inefficient legal processes, misinformed verdicts and unjustified awards. This enables top management at NCRIC to set goals, objectives, policy and strategy to reduce future costs.

Actuaries could hardly be faulted for being risk-adverse when a single error-prone opinion costs $340,000. However, in 2001, if the cost driver for uncertainty was zero and the total cost of claims to this insurance company was $4.8 million rather than $6.2 million, its litigation costs in Washington, D.C. potentially could be reduced by 22 percent, or $1.36 million. A $250,000 cap per case on non-economic damages would not do better.

Under the circumstance in which four verdicts were under $500,000 and one was in excess of $1.15 million--if it is assumed that all non-economic damages resulted from the larger verdict--NCRIC would save $506,568 ($756,568-$250,000) or 8 percent of the total cost of claims. If, however, non-economic damages were equally distributed among all verdicts and was 24 percent of each, savings would only be $26,000 or 0.4 percent.

Setting standards

The cost driver is not only the opportunity cost to a malpractice carrier but it is also the opportunity cost to the medical profession for not reconciling error in expert opinions. While tort reform is a laudable goal, a greater reduction of uncertainty and, correspondingly, malpractice insurance premiums could be achieved by organized medicine if it is committed to:

* Setting the rules and adopting a formal standardized model for malpractice review consistent with the Daubert decision that objectively tests the null hypothesis in every malpractice case

* Indoctrinating all physicians about its use

* Promoting it until it becomes the professional standard

Setting objective standards is a win-win solution that makes tort reforms work well and gives liability insurance companies the certainty necessary to stimulate permanent downward pressure on insurance premiums.

Having the foresight to do so could also influence the development of special medical malpractice courts, a concept that is currently receiving attention. (19) A standardized method of objective malpractice review would likely be a requirement for impartial court-appointed medical experts in any state that adopts this concept.

References

1. General Accounting Office. "Medical malpractice: implications of rising premiums on access to health care." Report to the Congressional Requester, GAO-03-836. Aug. 2003, 30-42.

2. NCRIC, Annual report: 26 March, 2004. Available at: http://biz.yahoo.com/e/040326/ncri10-k.html. Accessed March 21, 2005.

3. Congressional Budget Office. "Limiting tort liability for medical malpractice." January 8, 2004. Available at: http://www.cbo.gov/showdoc.cfm?index=4968&sequence=0. Accessed March 21, 2005.

4. National Association of Insurance Commissioners. 2004 National Association of Insurance Commissioners Drafted: 06/18/04 Statistical Information. May 19, 2004. Available at: http://www.naic.org/minutes/june04/stat.zip (password protected site). Accessed March 21, 2005.

5. Civil Jury Instruction No 2-8: 1981. Standardized Jury Instruction for the District Of Columbia. 2003, 23.

6. Daubert vs. Merrell Dow Pharmaceuticals (92-102) 509 U.S. 579 (1993).

7. Smith, H. "A model validating an expert's opinion in medical liability cases," Journal of Legal Medicine, in press.

8. McLean, RA. Financial Management in Health Care Organizations (2nd ed) Clifton Park, NY. Thompson, 2003. 136.

9. Atkinson, AA, Banker, RD, Kaplan, RS, Young, M.S. Management Accounting (2nd ed). Upper Saddle River N.J. Prentice Hall. 1995. 531.

10. U.S. Federal Rule of Civil Procedure 11.

11. Brennan, TA, Leape, LL, Laird, NM, et. al. "Incidence of adverse events and negligence in hospitalized patents: results of the Harvard medical practice study I." N Eng J. Med. 1991: 324(6): 370-376.

12. Brennan T, Sox C, Burstin H. "Relation between negligent adverse events and the outcomes of medical malpractice litigation." N Eng J Med 1996;335: 1963-67.

13. American Bar Association. Model rules of professional conduct. Rule 1.2. Available at: http://www.abanet.org/cpr/mrpc/rule_1_2_comm.html Accessed March 21, 2005.

14. Summary of medical malpractice law: index of states. Available at: http://www.mcandl.com/states.html. Accessed March 21, 2005.

15. Daft, R.L. Organization Theory and Design (6th ed). Cincinnati, Ohio. South-Western College Publishing, 1998, 442-44.

16. National Practitioner Data Bank. Available at: http://www.npdbhipdb.com/. Accessed March 21, 2005.

17. American Academy of Actuaries. Presentation by Bruce Wilson of the Physician Insurer Association of America. Washington Forum 2003. Available at: http://www.actuary.org Accessed March 21, 2005.

18. Council of Economic Advisors. "Who pays for tort liability claims? An economic analysis of the U.S. liability system." April 2002. Available at: http://www.proassurance.com/index.asp. Accessed March 21, 2005.

19. Common Good. Majority of Americans support creating special health courts. July 14, 2004. Available at: http://cgood.org/healthcare-newscommentary-inthenews-110.html. Accessed March 21, 2005.

RELATED ARTICLE: Cost & Calculations

Figure 1 Cost Driver Equation

[Dollars]/[Error-prone Opinion] = [Total Cost of Claims - Unavoidable
  Cost]/[# error-prone opinions (both sides)] = [Avoidable Cost]/[#
  error-prone opinions (both sides)]

Figure 2 Calculations of Total Litigation Cost and Error-Corrected
Litigation Cost

Total Litigation Cost = Net dollars to all plaintiffs (monies actually
                        allocated to plaintiffs from the awards)
                        +
                        All plaintiff transaction costs (administrative
                        expenses plaintiff attorneys pass on to clients)
                        +
                        All contingency fees (payments to plaintiff
                        attorneys for services rendered)
                        +
                        All defense legal costs (all legal transaction
                        costs and attorney fees for defending
                        physicians)

Error-Corrected       = Total Litigation cost--(Savings in all
Litigation Costs        plaintiff verdicts when correcting for error)
                        +
                        Savings in all defense costs when correcting for
                        error
                        +
                        Savings from all timely settlements when
                        correcting for error

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RELATED ARTICLE: Cost & Savings

Total Litigation Cost to Defend and Indemnify Physicians

Payment in all plaintiff       (5 X $630,473)           $3,152,365
  verdicts
  (a) Non-economic damages     (24% X $3,152,365)         (a) $756,568
  (b) Compensatory damages     ($3,152,365 - $756,568)    (b) $2,395,797
Defense legal cost in          (5 X $91,000)              $455,000
  plaintiff verdicts
Defense legal cost in defense  (13 X $86,000)           $1,118,000
  verdicts
Defense legal costs in         (2 X $86,000)              $172,000
  mistrials
Payment to claimants in        2 X $630,473)            $1,260,946
  settlements
Defense legal cost in          2 X $40,000)                $80,000
  settlements
Total cost of claims                                    $6,238,311

Savings in Error-Corrected Litigation Cost

Savings in verdicts   2 X $500,000                           $1,000,000
  (dismissed cases)
Savings in defense    2 X ($91,000 - $17,000)                  $148,000
  costs (dismissed
  cases)
Savings from         (2 X 20% X $630,473) - (2 X $20,000)      $212,189
  settlements
Total Savings                                                $1,360,189

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By Howard Smith, MD

Howard N. Smith, MD, practices gynecology in Washington, D.C. and is completing a Master's degree in Health care Administration at the University of Maryland. He can be reached at 202-223-3456 or [e-mail]

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