A Risk Manager, Claims Manager and Lawyer Walk into a Bar

Transcription

1 A Risk Manager, Claims Manager and Lawyer Walk into a Bar Views on Claims Trends from 3 Different Perspectives Carol Paris Director of Risks / Claims Management Orlando Regional Healthcare Scott D. Braun Member Clark Hill PLC Anthony D. DellaCroce Healthcare Claims Manager Beazley Group Don Bourassa Senior Vice President J. Smith Lanier & Co.

2 Overview What is Everyone Feeling? Are You Feeling Some types of cases getting a little harder to resolve? Cases lifespan increasing? Increased anxiety? Verdicts getting bigger? Settlement values creeping up? Legal expenses increasing? What We re Seeing It s NOT your imagination Claims environment is changing Certain classes of claims are becoming more difficult to settle for reasonable amounts It s not all Claims! 2

3 Claims Environment Might Depend On Who You Ask Provider Perspective: High level of expertise on local trends Strong familiarity with parties and counsel Excellent clinical knowledge Strong litigation tactics Insurance Claims Manager: Good at providing current on the ground observations and perceived trends National perspective Perceptions can be subjective But has the benefit of actuarial / quantifiable data National Monitoring Counsel: Wide range of clients Broad Industry perspective Complex Claims Experience National Contacts 3

4 Orlando Health Is A Large, Integrated Delivery System Regional system with comprehensive, high-value differentiated service mix Over 1,800 beds, 87,000+ admissions and 635,000 outpatient visits Multiple acute care facilities across a broad service area Dedicated specialty hospitals: UF Health Cancer Center at Orlando Health, Arnold Palmer Medical Center Distinct capabilities in oncology, cardiovascular car, neurologic care, orthopedics, OB/GYN and pediatrics The only Level 1 trauma center and licensed air ambulance service in Central Florida Statutory Teaching Hospital Large and committed physician base Strong market share Transitioning to value-based 4

5 Orlando Regional Medical Center Orlando Regional Medical Center ( ORMC ) UF Health Cancer Center at Orlando Health 5 5

6 Orlando Regional Medical Center (cont.) 808 acute care bed tertiary care center Central Florida s only Level One trauma center 38,000 square foot Ambulatory Care Center Provides services in the following key areas: Heart and Vascular Cancer Neurosciences Orthopedics Surgical Specialties Emergency Services Outpatient Services 6 6

7 Arnold Palmer Medical Center Arnold Palmer Hospital for Children and Winnie Palmer Hospital for Women & Babies 443 licensed beds 331 Acute Care 60 NICU Level II 52 NICU Level III Pediatric Emergency Department and Level One Trauma Center for Children 4 th largest Neonatal ICU and 2 nd largest delivery hospital in the U.S. 7 7

8 Dr. P. Phillips Hospital 237 bed full-service medical and surgical facility 24 hour emergency services with 42 patient bays Specialty services: Cardiovascular care Oncology services Neurosciences Orthopedics Surgical specialties including robotics Home to a fully accredited chest pain program and a designated primary stroke center 8 8

9 South Seminole Hospital 206 bed full-service medical/surgical acute care facility Home of Orlando Health Behavioral Healthcare, an 80 bed psychiatric hospital Provides a full range of outpatient services including: Hyperbaric oxygen therapy for wound care Diagnostic and interventional radiology Nuclear Medicine Laboratory Surgical services Sleep disorder services Outpatient psychotherapy 9 9

10 Orlando Health Central 171 bed acute care hospital 87,000 square feet of medical office space connected to the hospital 228 bed skilled nursing facility known as Health Central Park Recently approved a $25 million grant funded renovation and expansion of the emergency department Provides services in the following key areas: Cardiac, Stroke, Orthopedics, Women s Health Emergency Services Express Care Orthopedics Pediatrics Wound healing 10 10

11 South Lake Hospital 104 bed acute care hospital Owns and operates: Surgical center Endoscopy center Medical office building Hospital-based home health agency Wound care center Outpatient lab and x-ray facility Medical practices including: OB/GYN, Neurology, Endocrinology, Urology and the Center for Women s Health Home to the LiveWell Fitness Center and National Training Center Recently broke ground on a Skilled Nursing Facility 11 11

12 Orlando Health s Hospitals Hospital Map Code Orlando Regional Medical Center 1 UF Health Cancer Center at Orlando Health 2 Arnold Palmer Hospital for Children 3 Winnie Palmer Hospital for Women & Babies 4 Dr. P. Phillips Hospital 5 South Seminole Hospital 6 Orlando Health Central Hospital 7 South Lake Hospital 8 St. Cloud Regional Medical Center 9 Source: System Management 12 12

13 Provider Perspective Florida Viewed as Litigious State Lotto mentality Types of injuries OB claims Neurosurgery Infections Frequency Stable for catastrophic cases Tort Reform CAPS ruled unconstitutional in death cases Currently working to have other CAPS ruled unconstitutional No current activity to add legislation to address the CAPS Claims Handling Approx. 156 Open Claims Volumes Increasing Catastrophic cases driving increase in settlements/jury awards Brain damages Paralysis 13

14 Claims Manager Perspective Size $10m is the new $5m Venue Bad states getting worse, good states getting tougher Plaintiff s Bar More aggressive and demanding Volume Steady, but Large Claims Increasing Claims Handling Hospital, LTC, and Misc. Med Approx. 3,000 Open Claims Anxiety Increased likelihood to overpay 14

15 Average closed claim 15

16 Proportion of claims closed above $2m 16

17 Proportion of claims closed above $5m 17

18 Claims Frequency - All States 18

19 Average cost per claim Overall Florida vs Overall US 19

20 Average cost per claim Dade/Broward County vs Overall Florida (excl. Dade/Broward) 20

21 Average cost per claim Dade/Broward County vs Overall Florida (excl. Dade/Broward) vs Overall US 21

22 Getting Walloped for a $20,000,000 Verdict: The Good Old Days MI: Birth injury trial in Oakland County, MI, resulting in a $144m verdict. (October State Record) AL: $140m in AL for a Wrongful Death Claim. (December 2012) CT: Birth injury trial in CT resulting in a $58m verdict. (May State Record); NY: Paralysis of 14-year-old student as a result of negligent implantation NY: Birth injury claim resulting in a $130m in Nassau County, NY. (April 2013) of cervical screws to correct scoliosis resulted in $45.6m verdict. (May PA: Birth injury case tried in Philadelphia resulting in a $78m verdict. (July 2012) MA: Stroke and paralysis sustained by 35-year-old mother after child birth CA: Birth injury claim resulting in a $74.5m verdict. (April 2012) PA: Birth injury claim tried to a $32.8m verdict. (January 2014) CA: Alleged sexual assault of a 30-year old patient resulting in a $65m verdict. (November 2011) CA: Amputation of limb and parts of pelvis of 17-year-old student following NY: Bilateral amputation of legs resulting in a $62m verdict. (January 2014) WI: Loss of limbs to 53-year old following infection resulting in a $25.3m ) resulting in a $35.4m verdict. (May 2015) failure to diagnose cancer resulting in a $28.2m verdict (March, 2015) verdict. (July 2014)

23 Not Just the Usual Suspects OH: Alleged birth injury resulting from delayed C-section delivery. $28.7m verdict. (December 2014) VA: Alleged failure to timely diagnose impending myocardial infarction to a 37 year old resulting to diminished life expectancy. $25m verdict. (February State Record) RI: Brain damage in adult male allegedly due to failure to diagnose resulted in $25.6m verdict. (May 2015) NH: Alleged locked in syndrome after veteran discharged from VA hospital resulted in $21.5m verdict. (April 2015) CO: Alleged neurological injury to a child caused by a medication error resulting in a $17.8m verdict. (April State Record) ME: Alleged failure to read pap smear test resulted in $9.65m verdict despite the fact that Plaintiff now cancer free. (May 2015) WY: Alleged paralysis to an adult male secondary to an alleged failure to diagnose a neck fracture resulting in a $9m verdict. (November State Record) 23

24 And the Settlements Follow Along PA: $11.6m settlement for allegations of partial paralysis to a 24-year-old following a flu vaccine MN: $10m settlement for assault of nursing home resident. FL: $11.5m settlement for allegations of failure to timely deliver infant plaintiff causing brain damage GA: $7.5m settlement for alleged overdose of potassium in pediatric patient resulting in brain damage 24 NY: $17.9m settlement for allegations of failure to timely treat infection resulting in quadruple amputation AL: $12m settlement for alleged neurological injury in pediatric patient IL: Power Rogers & Smith case in Cook County, IL, involving quadriplegia to a 47-year-old following a trucking accident resulting in a $25m settlement IL: $20m settlement for allegations of failing to respond to cardiac arrest post-surgery in three year old resulting in brain damage IL: $32m settlement for alleged failure to treat infection led to quadruple amputations in 11-year-old female.

25 Florida Verdicts - On Par with National Trends Alachua County:Long Long Term Term Care in in Tampa resulting in a $900m Alachua County: Carecase case Tampa resulting in a $900m verdict. (February 2012) Alachua County:Brain Brain damage paralysis secondary to a to a punctured Alachua County: damageand and paralysis secondary punctured artery during brain surgery resulted in $23.4m verdict. verdict. (February 2012) artery during brain surgery resulted in $23.4m verdict. (January 2011) Duval County: Severe neurologic injury to an adult male follow Duval County: Severe neurologic injury to an adult male follow USDC (Southern Dist. FL): Death of cervical cancer after pap smear test bariatric surgery resulting in a $178m verdict. (January 2012) read as normal by cytotechnologist resulting in $20.87m verdict. (April bariatric surgery resulting in a $178m verdict. (January 2012) Broward County: Brain damage leaving patient in a persistent (January 2011) USDC (Southern Dist. FL): Death of cervical cancer after pap smear test read as normal by cytotechnologist resulting in $20.87m verdict. Broward County: Brain damage leaving patient in a persistent 2014) (April 2014) vegetative during cervical spine manipulation procedure resulting state in $38.57m verdict against 2 physicians. (May 2013) Broward County: aftermultiple multiple hospital resulted in Broward County:Paraplegia Paraplegia after hospital visitsvisits resulted in resulting in $38.57m verdict against 2 physicians. (May 2013) failure toto diagnose abscess, lead to $19.25m verdict. failure diagnosespinal spinal abscess, lead to $19.25m verdict. (May (May 2014) Orange County: Brainverdict. damage a result of botched abortion resulting in $36.7m (Julyas 2011) Lee County: Brain damage following excessive dose of trace elements for resulting in $36.7m verdict. (July 2011) Lee County: Brainin damage following excessive dose2011) of trace nutrition resulting $19.2m verdict. (February hysterectomy tried toinfection a $30m verdict. (December Palm Beach County: allegedly due to2013) injury to bladder Pasco County: Brain damage after undiagnosed aneurysm burst after vegetative state during cervical spine manipulation procedure Orange County: Brain damage as a result of botched abortion Palm Beach County: Infection allegedly due to injury to bladder during during todelay a $30m verdict. (December 2013) Palmhysterectomy Beach County: tried Alleged in treating bacterial meningitis contracted by a 10-month-old infant resulting in $28.45m verdict. 2014) elements for nutrition resulting in $19.2m verdict. (February 2011) Pasco County: Brain damage after undiagnosed aneurysm burst after discharge from ED resulted in $13.2m verdict. (December 2013) discharge from ED resulted in $13.2m verdict. (December 2013) Palm Beach County: Alleged delay in treating bacterial meningitis Miami-Dade County: Quadruple amputation allegedly due to negligent contracted by a 10-month-old infant resulting in $28.45m verdict. administration of expired vaccine resulting in $12.6m verdict. (January (July 2012) (July 2012) 25 Miami-Dade County: Quadruple amputation allegedly due to negligent administration of expired vaccine resulting in $12.6m 2012) verdict. (January 2012)

26 Recognized/Successful Plaintiff s Counsel Increased Expectations Generally Venued in Bad States Poor Liability Pictures Common Factors of The 1%ers Inflammatory Facts Inflated Life Care Plans Potential for Significant Damages 26 Plaintiffs Counsel Cases Taken Outside of Usual Geographic Area

27 Other Factors / Trends Continued Erosion of Tort Reform Nationwide Damages caps struck down in Florida, Georgia, Illinois; Pending challenge to cap applicable to public entities in Oregon Increased Regulatory Oversight/DOJ Investigations Deluge of civil suits after DOJ investigation made public Turning medical negligence suit into Consumer Fraud Act case; Unfair Trade Practices; Improper Billing; Violation of anti-trust, anti-kickback or consumer protection statutes. 27

28 How Do We Stem the Tide? Options Considerations Capitulate and continue making increasingly large payments? Put up a fight and dig in? Raising the floor Becoming an easy mark Reputation Try the case? 28 Potential for a run away verdict

29 Solutions and Suggestions for Tackling Large Claims Be Patient! Buy-In from Senior Management 29 Sometimes being proactive can be interpreted as fear You don t have to pay what they want: you hold the cards Work up liability, causation and damages defenses: sometimes cases do get better with discovery Big cases often don t settle, if at all, until the eve of trial or beyond Make them earn it Common board objections to being more aggressive Reputation don t want to be in the paper Start the dialogue early education Strengths/weaknesses of case Dangers of overpaying

30 Solutions and Suggestions for Tackling Large Claims Getting the Right Counsel No more gentleman s lawyer Prepare for trial not settlement No more business as usual approach 30 Trial Strategies Set up appellate issues early Know who you are dealing with plaintiff bar, experts, judges Daubert/Frye Conceding liability? Legislative Avenues Engaging other providers to identify common issues Jointly working with legislatures on tort reform and birth injury funds

31 Insured, Insurer and Broker Dialogue Start the discussions early Candid discussions on strategy, valuation and expectation 31 Unified front Using collective experience for best results

32 Do the Right Thing: Don t Let Fear of Litigation Stand in the Way Patient disclosures and transparency Fulsome Root Cause Analysis and reviews Using claims experience to further drive risk management and patient safety 32 Write-offs

33 Contacts 33 Carol Paris Director of Risks / Claims Management Orlando Regional Healthcare. Carol.Paris@orlandohealth.com Scott Braun Member Clark Hill PLC. Sbraun@clarkhill.com Anthony DellaCroce Healthcare Claims Manager Beazley Group Anthony.DellaCroce@beazley.com Don Bourassa Senior Vice President J. Smith Lanier & Co. Dbourassa@jsmithlanier.com August 20, 2015