Are Malpractice Payouts Adding to Rising Health Care Costs?

There is no end to the number of medical malpractice stories. A single dose of aspirin is billed at $25. Or a simple chest X-ray costs hundreds of dollars more at one hospital compared to another in the same town. Mounting health care costs are a concern for everyone these days, so why are costs escalating at an alarming rate?

Some researchers blame large medical malpractice settlements for draining our health care resources and increasing health care costs. But a new study of malpractice claims from 2004 to 2010 by John Hopkins researchers debunks this myth. Malpractice payments over $1 million add up to approximately $1.4 billion per year. That’s less than one percent of national medical expenditures in the United States. These types of “catastrophic” payouts often occur when a patient is killed or injured under the age of one, develop quadriplegia or brain damage, or have an issue with anesthesia, according to a study published in the Journal for Healthcare Quality.

However, the leader of the study, Marty Makary, MD, MPH, associate professor of surgery and healthy policy at John Hopkins University School of Medicine, says: “The notion that frivolous claims are routinely resulting in $100 million payouts is not true.” Instead, Makary suggests the real problem is that too many tests and procedures are being performed by physicians who fear they might be sued if they do not order them. This idea is known as defensive medicine and costs nearly $60 billion a year. Makary adds, “It is not the payouts that are bankrupting the system—it’s the fear of them.”

Generic versus Brand Name Prescription Drugs FAQs

What is the difference between generic versus brand name drugs?

The difference between generic and brand name prescription drugs is the inactive ingredients. These may include color, shape, taste, preservatives and packaging. Both generic and brand name drugs must contain the same active ingredients, dosage form, concentration, and route of administration.

How can you find out if the drug you need has a generic form?

Check the Orange Book, a publication that rates generic drugs and provides FDA substitution recommendations, or visit

Do most people use generic or brand name prescription drugs?

Eight of every 10 prescriptions are filled with generic drugs today. That’s because generic versions offer huge cost savings, cutting drug costs by up to 80 percent. In fact, the FDA says Americans save $158 billion on prescription drugs annually by using generic versus brand name drugs.

Why are brand name drugs more expensive than generic drugs?

It can take 10 years and almost $1 billion to develop a new prescription drug. During development, the drug is under patent protection and the pharmaceutical company has exclusive rights to sell the drug. This rationale allows the company that created the drug to recoup its development costs and make a profit according to the Journal of Health Economics. Once the patent expires, other pharmaceutical companies can sell the drug at a greatly reduced rate because they have not incurred the development costs.

Does the FDA regulate generic drugs?

If a pharmaceutical company wants to produce and market a generic drug, it must file documentation with the FDA that it follows good manufacturing practices.

Do you have a legal question? Submit your questions to Nancy by email at [email protected].

Prescription Errors — When Can Medication Kill?

After hospitalization, Mr. Jones was prescribed a blood-thinning medication called Coumadin. He picked up his new prescription at the neighborhood pharmacy on the way home. When he opened his new prescription, a slew of papers spilled from the envelope. Annoyed, he threw them in the trash, not noticing the prescription strength was different from what his doctor had ordered. The next morning, his wife found him dead on the bathroom floor. Mr. Jones had slipped, hit his head on the sink, and died from a brain hemorrhage due to his blood not clotting properly. The pharmacy had incorrectly filled his prescription, dispensing double the dose of blood-thinning medication prescribed.

Mr. Jones’ death was totally preventable, but he and more than 1.5 million people every year are harmed due to medication errors according to a report by the Institute of Medicine. The cost of death and injury from such medication errors has been estimated to be $77 billion dollars annually (Preventing Medication Errors, National Academies Press: 2007:124-5).

Common types of medication errors include the wrong medication being prescribed due to an incorrect diagnosis, poor drug distribution practices, inadequate communication to the patient, and dispensing errors (e.g., incorrect medication, dosage strength, or dosage form; miscalculating a dose; and failing to identify drug interactions or contraindications).

When are you most vulnerable to falling victim to a medication error?

Certain conditions in hospital and community pharmacies create a risk for medication errors. Among the top reasons for medication errors are disorganized work flow, fatigued staff, frequent interruptions and distractions, poor physician handwriting, an emphasis on volume over service quality, stress, ineffective communication with patients, improper technician training and inadequate staffing (National Association of Pharmacy Regulatory Authority).

Despite new technology, such as bar scans on medications, electronic medical records, automated medication dispensing and e-prescribing, medication errors still occur because pharmacists and technicians can override these systems.

How can you prevent prescription errors from happening to you?

Be watchful about the medications you receive, and ask questions. Begin by making a list of all medications you currently are taking. Type this list, make several copies and give it to any nurse or doctor when they ask what medications you are taking. Also, look at your pills before you place them in your mouth. If they do not look the same as your last prescription, ask your pharmacist why.

As a nurse, I was taught the “Five Rights of Medication Administration”:

  1. Was the RIGHT drug ordered?
  2. Did the RIGHT patient receive the medication?
  3. Was the drug given by the RIGHT route (e.g., orally, intravenously or injection)?
  4. Was the RIGHT dosage given?
  5. Was the medication provided at the RIGHT frequency (i.e., three per day)?

If you follow these tips, you may save yourself or a loved one from a dangerous medication error.

Potential New Way to Report Medical Mistakes

Negligence in health careMedical errors and negligence in health care, such as prescription mix-ups, surgery on the wrong body part, and infections, often go unreported by patients each year. But a new federal initiative proposed by the Obama administration plans to address this growing problem.

According to a recent New York Times article, consumers will be able to report medical mistakes and unsafe practices by health care professionals and hospitals through a website and in telephone interviews. The government plans to use information submitted by consumers to improve health care safety by sharing the results with health care providers.

If the pilot project goes well, health officials will begin collecting information in May 2013 and fliers describing the project will be available at hospitals, doctors’ offices, pharmacies, and mailed to patients’ homes. For more information, visit the Agency for Healthcare Research and Quality website.

Pear R. New system for patients to report medical mistakes. New York Times. Published online Sept. 22, 2012: [Image source]

Power of Attorney FAQs

Power of attorney for health care purposesWhat is a power of attorney?

A power of attorney (POA) is a document that gives authority or power to a designated person to act on your behalf when you cannot.

Is there more than one type of POA?

Yes. There are a few types of POAs for different situations. A financial POA allows someone to conduct business on your behalf such as transferring real estate, entering into contracts or transferring money. You also can have a power of attorney for health care; this person has the ability to make decisions about your medical treatment if you are unconscious or unable.

What is a living will?

A living will is a document that allows you to set forth in detail what your wishes are regarding end-of-life treatment.

Do you have a legal question? Submit your questions to Nancy by email at [email protected].

How to Spot Nursing Home Abuse and Neglect

Most nursing home residents are elderly, with several medical problems that could result in death. So how do you determine if a death is due to care home abuse? Below are conditions that may indicate nursing home abuse or neglect.

  • Pressure sores or bedsores: Pressure sores occur on the bony prominences, such as buttocks and heels, and are caused by prolonged pressure when the resident cannot reposition themselves.
  • Dehydration: Signs of dehydration can be confusion and weakness, and in the elderly who have multiple medical problems, dehydration can be deadly.
  • Multiple falls: Nursing homes are required to alert family members to a change in condition such as a fall. Falls can result in fractures, and if not diagnosed in a timely manner, the resident can suffer for days prior to treatment.
  • Bruises: Bruises found on the chest, back, arms and legs can be signs of abuse by the nursing home staff or other residents. Bruises without explanation by staff should be treated with suspicion.
  • Sudden changes in mental status: If a resident becomes confused or does not recognize family and friends, this can be a sign of abuse (e.g., dehydration, medication errors or infection). If a change in mental status is not immediately evaluated by the nursing home, it can be a sign of neglect.

Defeating Mandatory Arbitration Clauses

Are insurance companies satisfied with the litigation climate post-tort reform? Of course not! Mandatory arbitration clauses contained in many consumer contracts are the latest wave of tort reform storming the beaches. The insurance industry calculates its insureds will fare better with arbitrators than jurors; however, by including these clauses, it denies legal clients their Seventh Amendment right to a jury trial. The nursing home industry has been aggressively enforcing these clauses, emboldened by recent cases from the Ohio Supreme Court (Hayes v. Oakridge Home, 122 Ohio St. 3d 63, 2009-Ohio-2054) and United States Supreme Court (Marmet Health Care Ctr. v. Brown, 132 S. Ct. 1201, 182 L. Ed. 2d 42 2012).

A Recent Nursing Home Case

In a recent case, our firm was successful in defeating a nursing home admission agreement with an arbitration clause both in the trial court and later in Montgomery County’s Second District Court of Appeals.

The plaintiff’s father was admitted to the defendants’ nursing home facility for short-term rehabilitation, and the plaintiff was asked to sign admission papers despite her father being able and competent. The plaintiff was presented with several documents including an admission agreement with a one-sentence mandatory arbitration clause, which she signed, and an arbitration agreement, which she refused to sign in the presence of the admission officer.

The plaintiff’s father was admitted and died ten days later of a treatable infection due to the defendants’ failure to properly evaluate and care for the father.

How We Succeeded

The key to our success in this case was a strong factual record and an aggressive attack using basic contract law principles. We provided the court with a detailed affidavit comprised of the father’s daily activities to demonstrate his competency and a complete factual narrative of the admission procedure including conversations with the admission officer.

At the hearing before the trial court, the plaintiff was the only witness to testify, while the defendants relied only on the signed admission agreement containing the mandatory arbitration clause.

Asking the Right Questions

When applying basic contract law to defeat mandatory arbitration clauses, we asked the following questions:

  • Did the proper parties sign the agreement?
  • Was the plaintiff competent to sign?
  • Was there an offer, acceptance and consideration?
  • Was there a “meeting of the minds” between the plaintiff and defendant on all substantive provisions?

In our case, the plaintiff told the admission officer she did not wish to arbitrate and refused to sign the arbitration agreement. The trial court found this uncontroverted evidence compelling and held there was no agreement to arbitrate (i.e., “no meeting of the minds”).

Proving Unconscionability

Assuming there was a proper and enforceable contract, the analysis then shifts to whether the contract is procedurally and substantively unconscionable. Procedural unconscionability examines the bargaining power, age, education and business acumen of the involved parties, while substantive unconscionability refers to the terms of the contract.

In our case, the trial court found the plaintiff was under significant emotional duress when she signed the admission agreement, and there was a lack of other available nursing home choices. Moreover, the contract was deemed one-sided; the terms allowed the defendant to sue the plaintiff in court for non-payment but required the plaintiff to submit any disputes to arbitration forgoing a jury trial.

Utilizing solid factual documentation and applying basic contract law can help lawyers protect their clients’ right to a jury trial. These clauses can be defeated with assaults on many fronts. Good luck!

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