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					                       Proposal to

                Provost’s Common Fund

Profiling and Understanding Medical Malpractice Litigation

             Neil Vidmar, Duke Law School
            Paul D. Lee, Duke Medical School

                     March 19, 2004

             Profiling and Understanding Medical Malpractice Litigation

                             Neil Vidmar, Duke Law School
                            Paul D. Lee, Duke Medical School

   This proposal involves a collaborative, multi-disciplinary research project involving Neil
Vidmar of Duke Law School and Paul Lee of Duke Medical School. Dr. Gerald McGwin at the
School of Public Health, University of Alabama, Birmingham (statistician) will serve as our
collaborator. The research aim is to provide a detailed profile of medical negligence claims, the
costs of these claims and the process and outcomes of litigation for a period of twelve years
ranging from 1990 through 2001. While prior medical malpractice crises have been well-studied,
the nature of the most recent crisis and underlying issues have heretofore proved elusive to
researchers, but they are critical to understanding a societal problem of great policy importance for
American society. Further, we seek to place the findings into a context that will allow
examination of the validity of the perspectives of the key parties in the dispute as a way of
illuminating potential approaches to addressing the problem. The research efforts under this
proposal are expected to lay the groundwork for applications for additional funding from the
Robert Wood Johnson Foundation or the Law and Social Sciences Division of the National
Science Foundation.

       In a recurring pattern of about ten-year cycles a “crisis” in obtaining affordable medical
liability insurance develops, a crisis that is intimately tied to medical malpractice litigation. The
crisis has major consequences for our health care system and for the American public. First,
physicians in many specialties and in many geographic areas are experiencing serious problems in
obtaining or affording medical liability insurance. Second, during the past two years highly
contentious legislative hearings have been held in numerous states (including but not limited to
Florida, North Carolina, Mississippi and Pennsylvania) as well as by a Congressional House
subcommittee. These hearings have been held in an attempt to understand the problem and to
devise solutions to the insurance crisis. The problems involved in this debate are very serious ones
having far reaching consequences on the costs and access to health care and the interests of
persons who suffer injuries as a result of medical negligence. Yet the debate between opposing

groups is more often filled with angry rhetoric and unsubstantiated claims than with sound
arguments based upon an accurate picture of what actually occurs when a patient makes a claim
against a medical provider.

       Health care providers and business organizations blame the nature and operation of the
American tort system as the principal culprit behind the problems.1 Proponents of reforms believe
that juries favor plaintiffs and give verdict awards that exceed the amount necessary to compensate
plaintiffs who are actually injured from medical negligence. Further, the critics argue that these
verdicts force insurers to settle frivolous lawsuits out of fear of jury awards and in others settling
cases for far more than they are worth. This is called the shadow effect of jury awards. Finally,
critics believe that the contingent fee system provides a “lottery” effect that also contributes to the
filing of frivolous lawsuits. In contrast, consumer groups and the plaintiff’s bar argue that the
problem is not with the tort system but rather with the high incidence of medical mistakes that lead
to claims.2 Moreover, proponents of the current system believe that rising malpractice premiums
and underwriting/coverage decisions have more to do with poor investments and with factors
associated with the business cycle that affects liability insurers’ profits than with rising claims and
the size of awards.3

   The problem of medical negligence lawsuits has been investigated by many researchers,
including one of the authors of this proposal.4 However, that research has been handicapped by
limited information about the incidence of claims, the costs of litigating these claims- and how
these factors have changed over time, particularly with respect to the most recent “crisis.” There
are several reasons for this lack of information. Many settlements between claimants and doctors
are confidential, whether they occur prior to a lawsuit being filed or after a jury verdict. When
insurers and others do provide public data about costs and payouts it is presented in summary

     See, e.g. Lawsuit Hell, NEWSWEEK, December 15, 2003, especially 46-48.
     Linda Kohn, Janet Corrigan and Molla Donaldson, eds., TO ERR IS HUMAN: BUILDING A SAFER HEALTH CARE SYSTEM,
   Institute of Medicine ( 2000); Lucian Leape, Institute of Medicine Medical Error Figures Are Not Exaggerated, 284
   RESPOND (2004).
     See, e.g. Neil Vidmar, MEDICAL MALPRACTICE AND THE AMERICAN JURY (1995); Vidmar, Tort Reform and the
   Medical Liability Insurance Crisis in Mississippi: Diagnosing the Disease and Prescribing a Remedy 22
   Stephen Daniels and Joanne Martin, CIVIL JURIES AND THE POLITICS OF REFORM (1995).

statistics that do not allow breakdowns of what occurs by types of cases. Jury verdict data used by
some interest groups are often biased and unreliable.

       The proposed research will be able to rectify these deficiencies by merging two large
databases from the state of Florida. The first Florida database involves over 70,000 closed claims
reported to the Florida State Department of Health dating back to 1975.5 Under Florida law
medical liability insurers are required to report detailed information about the claims made against
their insured health care providers.6 The information includes, among many other variables:
information about the severity and nature of the injury allegedly suffered by the claimant; the
particular health care provider and medical care provided; the medical specialization of the
provider; when and at which stage of the litigation process the claim was settled; how the claim
was settled; and the amounts paid to lawyers to defend the claim as well as the amount, if any,
eventually paid to the claimant. The data also provide insights about the amounts that are awarded
for “pain and suffering,” one of the most controversial aspects of jury awards. The second data set
involves a set of 854 jury verdicts in medical malpractice trials from 1990 through 2002 that are
compiled in a legal data base maintained by Westlaw. Prior research has shown this latter data set
to be reasonably comprehensive of jury verdicts, including cases in which the doctor prevailed.7
These data give details about the issues at trial and in many instances also provide information
about the “pain and suffering” components of awards as well as the amounts awarded for
economic losses. We have now linked these jury verdict data with the Florida Department of
Health data base.

       This linking will provide a unique opportunity to uncover how cases are resolved
throughout the continuum of the legal process, especially settlements either before or after a
verdict. Thus, for example, we will be able to assess the true nature of payments after initial
verdicts are reached. Researchers have long known that jury verdicts frequently do not reflect the

      This data base has been used in previous studies, see, e.g. Nye The Causes of the Medical Malpractice Crisis:
   An Analysis of Claims Data and Insurance Company Finances 76 GEORGETOWN LAW REVIEW 1495 (1988); Sloan et
   al., SUING FOR MEDICAL MALPRACTICE (1993); Studdert et al. The Jury is Still In: Florida’s Birth-related Neurological
   Injury Compensation Plan , 25 J. OF HEALTH POLITICS, POLICY AND LAW 499 (2000).
     Governor’s [Florida] Task Force on Medical Malpractice, REPORT ON MEDICAL MALPRACTICE (2003).
     Vidmar et al., Jury Awards for Medical Malpractice and Post-verdict Adjustments of Those Awards 48 DEPAUL L.
   REV. 265 (1988). See also, Vidmar and Rose, Punitive Damages; In Terrorem and in Reality, 38 HARVARD JOURNAL ON
   LEGISLATION, 489 (2001).

amount of money that the plaintiff actually receives. In some cases, for instance, there are multiple
defendants, some of whom may settle without a jury trial while the other defendant goes to trial.
One consequence of this scenario may be that plaintiffs who lose at trial actually do not come
away empty-handed.8 On the other hand, cases that produce large jury verdicts that make the news
often are quietly settled for substantially less than the verdict. By cross-referencing the data bases
we can make estimates of reliability of the data that are reported and better understand any
systemic biases that may be present. In addition to information about the substantive claims,
analysis of the merged data will allow us, for the first time, to obtain an actual estimate of the costs
of litigation for the defendants on a case by case basis, including cases in which the claimant
eventually received nothing.

           Our preliminary analyses of the merged data bases indicate that a very substantial number
of cases are settled with a payment to the claimant without a lawsuit ever being filed. Some of
these cases involve very serious injuries or death and the payments are very substantial. In
addition, despite that fact that Florida has legislation requiring neurological birth injuries to be
diverted to a non-legal forum there appear to be a substantial number of cases that eventually result
in jury trials.9 These preliminary insights, if explored in more detail, can have great importance for
the controversy about reforms to the legal system. As an example, the perspective of physicians
and insurers is that there has been a large increase in paid claims, while that of the plaintiff’s bar
and consumer groups is that there has not been a significant increase in the size of jury awards
when adjusted for inflation. Both perspectives could be accurate, but misleading when viewed in

           The above discussion only touches upon a small fraction of the issues that will be
investigated in these combined data sets. However, before we can truly begin to mine the data we
need to further validate the their reliability, a process that includes labor-intensive cross-checking
of the files and, in some instances, seeking additional sources to verify that reliability. When
completed we will apply the same methods to data collected by the North Carolina Administrative

        See also Studdert, supra , note 4.

Office of the Courts to develop a comprehensive profile of verdicts and settlements in North
Carolina. Similar data bases may also exist in Texas, offering even greater opportunities.

       This project is truly interdisciplinary and cross-discipline in nature. It requires expertise
about the litigation process as well as medical expertise to understand the nature of the medical
injuries and the providers of the services. Before we can apply for external funding for these
projects we need to complete the merging of the data sets and assess the reliability of the data, a
time-consuming and labor-intensive task. We will also endeavor to bring additional Duke faculty
members from various schools and units to participate in the research.

       It is important to emphasize, however, that on the basis of our preliminary research, we
expect that with support from the Provost’s Common Fund we will be able to produce at least two
scholarly articles within the next year that will describe the main outlines of the litigation process
and fill in many of the gaps missing from the picture of medical malpractice litigation. These
articles will aid in our applications for outside funding. Nevertheless, the articles will have value in
their own right. We expect the results to be of interest to the general public as well as concerned
professionals in the fields of medicine and law. By empirically assessing the current presumptions
of interested parties, we will be able to provide critical evidence to guide policy discussions about
resolving not only the current crisis but also, hopefully, lessen the chance of future crises.

                                         Brief Biographies
   Neil Vidmar, Ph.D.

           Neil Vidmar is Russell M. Robinson II Professor of Law at Duke Law School and holds a
   secondary appointment in the Psychology Department at Duke. He received his Ph.D. in social
   psychology from the University of Illinois in 1967 and joined the Psychology Department at the
   University of Western Ontario in Canada in that year. He remained at Western Ontario until his
   appointment at Duke Law School in 1987. Professor Vidmar is co-author with Valerie Hans of
   and editor/author of WORLD JURY SYSTEMS (2000). He has written over 100 articles, chapters
   and reports that include the following subjects: the jury system; small claims courts; the Ontario
   Business Practices Act; exemplary damages; independent para-legals; rights consciousness;
   dispute resolution; procedural justice; privacy; reliability of eyewitnesses; attitudes toward the

death penalty; bias in the ABA ratings of judicial candidates and battered woman syndrome. With
his co-investigator, Professor Shari Diamond of the American Bar Foundation and Northwestern
Law School, he was engaged in a study of civil juries in Arizona, carried out in conjunction with
the Pima County, Arizona Superior Court and supported by the National Science Foundation and
the State Justice Institute. That project videotaped the actual deliberations of 50 civil juries and is
providing unprecedented insights into how juries perform their duties. He also lectures on
judging scientific evidence for judicial education programs in the United States and Canada.

         Vidmar has testified or consulted as an expert on jury behavior for trials in the United
States, Canada, England, Australia and New Zealand. He was lead drafter of an amicus brief in
Kumho Tire v. Carmichael (1999), a leading Supreme Court case involving expert evidence, and
co-drafter of an amicus brief on punitive damages submitted in the Supreme Court case of State
Farm v Campbell(2003). He also offered evidence in Best v. Taylor Machine (1997), an Illinois
constitutional case involving medical malpractice tort reform. His work on trial prejudice in
Canada was utilized in a leading case involving aboriginal rights, R.v. Williams (1998), that was
decided by the Supreme Court of Canada. His national and international research on pretrial
prejudice is documented in Case Studies of Pre-and Mid-trial Prejudice in Criminal and Civil
Litigation, 26 LAW AND HUMAN BEHAVIOR 73 (2002) and in “When All of Us are Victims: Juror
Prejudice and “Terrorist” Trials 78 CHICAGO-KENT LAW REVIEW 1143 (2003). In criminal
cases most of his testimony and consulting has been for defendants, but on several occasions he
has also assisted the prosecution. In civil cases his testimony or consulting activities have been
about equally divided between plaintiffs and defendants. Defense clients have included
physicians in medical malpractice cases and large corporations.

Paul P. Lee, MD., JD.

         Paul P. Lee, MD, JD, is the James Pitzer Gills III and Joy Gills Professor of
Ophthalmology at Duke Medical Center, Senior Fellow in the Duke Center on Aging and Human
Development, and part of the Health Services Program at RAND, Santa Monica, CA. He is
Medical Director and an active clinician, surgeon, and teacher in the Department of
Ophthalmology. National service activities include the Board of Trustees of the American
Academy of Ophthalmology, the Writing Committee for the board re-certification examination
and Associate Examiner for the American Board of Ophthalmology, the Socioeconomics and
Health Services Section Editor for the Archives of Ophthalmology, and the Editorial Boards of
Evidence-Based Eye Care and the Chinese Journal of Ophthalmology. Community service
activities include Board of Directors involvement for the Center for the Partially Sighted in Santa
Monica, CA, and the Blind Children’s Center in Los Angeles, CA.

        Professor Lee was a Phi Beta Kappa graduate of the University of Michigan, an AOA
graduate of the University of Michigan Medical School, and a Stone Scholar at the Columbia
University School of Law. After completing his internship in internal medicine at the Beth Israel
Hospital in Boston, he completed his ophthalmology residency at the Wilmer Eye Institute at
Johns Hopkins Hospital. From there, he completed his glaucoma fellowship at the Massachusetts
Eye and Ear Infirmary. He then joined the faculty at the Doheny Eye Institute, University of
Southern California and the consulting staff at RAND, for 6 years, before joining the faculty at
Duke University Eye Center in 1997.

         Dr. Lee is an internationally recognized academician in eye care delivery and glaucoma.
He has published numerous peer-reviewed journal articles and book chapters., He is the
Socioeconomics and Health Services Section Editor for the Archives of Ophthalmology and
serves on the Editorial Boards of Evidence-based Eye Care and the Chinese Journal of
Ophthalmology. He has led scientific investigations into why patients lose vision, the quality of
care, patient-centered care, quality of life, health care delivery workforces, and the impact of
financial and other factors on care delivery. His team was recently awarded an NEI grant to
investigate methods of enhancing the ability of eye doctors to provide care for patients with
diabetes, together with an NIA grant to understand how patients use (or do not use) health care

       Dr.Lee is Medical Director and an active clinician and surgeon in the Ophthalmology
department at Duke, having been recognized as one of our physicians who is among the “Best
Doctors in America” and “America’s Top Doctors.” He serves as a Trustee on the Board of the
American Academy of Ophthalmology and serves in several capacities for the American Board of
Ophthalmology. He is also on the Board of Directors of the Center for the Partially Sighted in
Santa Monica, CA, and the Blind Children’s Center in Los Angeles, CA.