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Medical Malpractice Liability Reserves

For more information, please contact The Ahearne Law Firm, PLLC at (845) 763-4100 for a free initial consultation and case evaluation.

Most doctors will be sued for malpractice at some point in their careers. A 2016 Medscape survey revealed about 80% of physicians age 60 and above had experienced at least one malpractice suit over the course of their careers. A similar analysis by the American Medical Association showed 60%of physicians over age 55 across all practice areas had been sued for malpractice at least once.

Medical malpractice occurs when a patient is harmed by a doctor or other medical professional who fails to competently perform his or her medical duties. Each year in the United States, about 440,000 patients die from preventable medical errors. Medical error is the third leading cause of death, behind cancer and heart disease.Though the rules about medical malpractice vary from state to state, there are general principles and broad categories of rules that apply to most medical malpractice lawsuits.

Most medical malpractice claims fall into one of these categories:

  • Failure to diagnose. If a competent doctor would have discovered the patient’s illness or made a different diagnosis, which in turn would have led to a better outcome than the one actually achieved, then the patient may have a viable medical malpractice claim.
  • Improper treatment. If a doctor treats the patient in a way that no other competent doctor would, the patient could have a medical malpractice claim. It may also be malpractice if the doctor selects the appropriate treatment but administers it incompetently.
  • Failure to warn a patient of known risks. Doctors have a duty to warn patients of known risks of a procedure or course of treatment, known as the duty of informed consent. If a patient, once properly informed of possible risks, would have elected not to go through with the procedure, the doctor may be liable for medical malpractice if the patient is injured by the procedure in a way that the doctor should have warned could happen.

Risk management professionals are responsible for making litigation strategy decisions and setting reserves in medical malpractice lawsuits. These decisions are routinely made based on case manager discretion and the gut instinct of the reserve setter. Given the many variables, differing perspectives and competing objectives these lawsuits involve, it is risky for a single person or a panel of experts to effectively analyze medical malpractice cases.

Since 2009, The Risk Authority Stanford, a risk consulting firm created from the hospital risk management department serving the Stanford University School of Medicine, Stanford Health Care and Stanford Children’s Health in California, has been exploring ways to improve the reserve-setting process. The firm developed Decision Analysis Reserve and Trial Strategy (DARTS), a structured reserve-setting process that uses decision science and risk management tools to help provider organizations make better choices about litigation strategy and case value. The tool, which Stanford University Medical Network has been using for the past year, provides more accurate medical malpractice reserves by accounting for all of the variables in lawsuits as well as how they interact.

The Risk Authority Stanford not only looks to assist provider organizations develop more accurate reserves, but also simplifies the reserve-setting process. The DARTS software tool breaks the process down into steps that make setting reserves easier for claim managers. The tool user starts by inputting the case facts, including the allegations against the medical professional and the injury the patient sustained.

To prove that medical malpractice occurred, a patient must be able to show:

  • A doctor-patient relationship existed
  • The doctor negligently failed to meet the standard of care owed under the circumstances that led to the allegations of malpractice
  • The doctor’s negligence caused the injury
  • The injury led to specific damages

Accordingly, the DARTS software tool next allows the user to enter any information available regarding whether the physician did or did not deviate from the established medical standard of care, and analyzes the probability of causation.Based on the information provided, the tool calculates the amount of all possible damages, including non-economic, economic and loss of consortium.

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If you or a family member have suffered injury as a result of negligence by a medical professional, you and/or your family member may be entitled to money damages.

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