Southlanders file bulk of state's malpractice suits.

Concentration of managed care may be a factor

A study of major medical malpractice suits filed in California has turned up an interesting if somewhat distressing statistic for local health care providers: The majority of high-paying cases were filed in Southern California.

Oakland-based Medical Underwriters of California, which manages a professional liability insurance company to cover the state's physicians, performs an annual survey of medical malpractice suits based on information published in five legal journals and newsletters. It found that of 149 California malpractice cases decided in 1994 that resulted in verdicts, settlements or arbitration awards of more than $100,000, 80 percent were filed in Southern California.

The Medical Underwriters survey is by no means an exhaustive study of California medical malpractice cases. Because it tracks only cases covered by legal journals, it cannot claim to be a scientifically reliable picture of the lawsuit environment. However, in the absence of any other publicly available statistics on malpractice suits, the survey at least points up possible trends that are of interest to insurers and providers.

Slight slowdown

Although the Medical Board of California began tracking medical malpractice claims in 1993, the agency only keeps track of the total number of successful claims, and does not break them down by region or cause.

According to the Medical Board, the state agency that regulates medical licensing, there were slightly fewer successful malpractice claims (those involving settlements or arbitration awards of more than $3,000, or court verdicts greater than $30,000) in fiscal 1995 than in fiscal 1994. There were 1,187 successful claims between July 1, 1993 and June 30, 1994, and 1,050 successful claims from July 1, 1994 to June 30, 1995.

Those numbers are consistent with the results of the Medical Underwriters survey, which found a slight decline in the number of verdicts, settlements or arbitration awards greater than $100,000 between 1993 and 1994.

Specifically, the Medical Underwriters found 154 such high-paying cases in 1993, compared with 149 in 1994. However, the number has risen steeply since the Medical Underwriters first began conducting its survey in 1973, when it found only 42 such high-paying cases.

Last year's high percentage of Southern California high-pay cases is nothing new, according to underwriting manager Ron Neupauer with Medical Underwriters of California, who performed the study.

The six-county Southern California region has long been a hotbed of malpractice litigation, and L.A. County has been especially hot, Neupauer said.

"There's a general feeling in our business that the frequency and severity of malpractice claims are greater in Southern California," Neupauer said. "I don't know if it's jury attitudes, or something going wrong, or the greater prevalence of managed care, or what."

Litigious Southlanders

Dr. Chad Smith, an orthopedist who practices at Orthopaedic Hospital in downtown L.A. and who is frequently called as an expert witness in malpractice cases, said he believes people are just more litigious in Southern California.

"There are more lawyers per person down here than there are in Northern California," Smith said.

But a more frequently cited explanation is the greater penetration of managed care here than in Northern California. That theory seems to be supported by the extremely high number of lawsuits alleging failure to diagnose and failure to perform Caesarian-section baby deliveries, claims that are frequently filed against doctors under managed care contracts because of the capitation system of payment, according to attorneys.

In 1994, 43 percent of the cases cited in the Medical Underwriters survey were based on allegations that a physician failed to diagnose a given ailment, and those cases accounted for 40 percent of the $122 million indemnity total paid out for all the cases in the study. In 1990, only 29 percent of the cases making up 19 percent of the total indemnity were related to failure-to-diagnose claims. Eighty-three percent of the California diagnosis-related cases in 1994 were filed in Southern California, according to Medical Underwriters.

"It has a lot to do with the gatekeeper practice of HMOs," said consumer attorney William Newkirk of West L.A.-based Newkirk & Newkirk, explaining the growing prevalence of failure-to-diagnose cases. "Today, the disease progresses to a fairly serious level before the patient is allowed to see a specialist who can take care of the problem."

System under fire

Under the capitation system, health care providers are paid a set fee based on the number of enrollees they serve, regardless of how many actual patients they treat during a given period. Many critics and consumer attorneys such as Newkirk claim the system creates an environment in which providers are reluctant to order diagnostic tests or refer patients to specialists, because they will not be compensated for these services.

Managed care practices also have been blamed by some analysts for the high number of suits filed against obstetricians, who were hit with more malpractice claims in the study than any other specialty.

Thirty-two of the 149 lawsuits in the Medical Underwriters survey in 1994 were directed at obstetricians/gynecologists. The next-highest target group was general and family practitioners, with 16 cases, followed by orthopedic surgeons with 13 and then emergency medicine specialists with 12.

Many of the 25 birth-injury cases in the study were based on an alleged failure to perform Caesarian sections. According to Neupauer, physicians are under considerable pressure from payors and consumer groups to cut back on C-sections, leading to a reluctance to perform the procedure. To David Harney, a local consumer attorney who specializes in medical malpractice, it's an economic issue.

"I think it's the attitude that you can get them (mothers and their newborns) out of the hospital quicker if you don't do a C-section," said Harney, whose office is in downtown L.A. "It's cheaper that way."