Rising Medical Costs Drive Up Catastrophic Recoveries

Catastrophic injury recoveries are higher than ever in North Carolina, with several over $9 million reported in the last six months.

Plaintiff and defense lawyers agree the upswing is primarily due to one factor: soaring health care costs.

"Catastrophic injury awards do seem to be going up," said Rocky Mount attorney J. Nicholas Ellis Jr. Ellis chairs the NCBA's litigation section and is on the board of the North Carolina Association of Defense Attorneys.

"Not only has the cost of health care dramatically increased, so has the amount of time that care has to be provided," he said. "With technological advances in medicine, a child who was once projected to live no more than five years may now live 15 years -- and a child once projected to live 15 years may now have a full lifespan."

Until three years ago, verdicts and settlements in large personal injury cases rarely topped $6 million, according to the recoveries reported to Lawyers Weekly.

But in 1997, plaintiffs won huge verdicts in three catastrophic claims -- two exceeded $20 million, while one was $10 million (see sidebar below). Settlements in similar cases have been going up ever since.

While medical costs may be the driving force behind bigger recoveries, other factors also play a role. Here's what several attorneys had to say about the increase.

Medical advances and higher health care costs. "In brain injury cases, the kinds of medical care available haven't fundamentally changed, but the cost of care has skyrocketed," said Raleigh attorney Mark Holt. He was one of the plaintiffs' attorneys in Snell et al v. Gaston Memorial Hospital et al, a childbirth tort claim that settled for $10.75 million.

In more and more catastrophic awards, the total recovery barely exceeds the cost of future medical care, according Holt.

"When a hospital or doctor is deciding how much insurance to buy, I think rising medical costs affect that decision as much as the rising level of malpractice verdicts," he said. "It may be a chicken-and-egg scenario, but I think you have to start first with higher medical bills. That in turn has the potential to drive up the amount of insurance medical providers feel they need to protect themselves."

Fayetteville attorney Wade Byrd, who also represented the plaintiffs in Snell, agreed with Holt.

"I remember settling a case involving a baby with brain damage in 1984 for $1.2 million, and Medical Mutual was quoted as saying that was $400,000 more than they had paid in any malpractice case up to that time," Byrd said. "I've got a case right now involving a ventilator-dependent quadriplegic, and the life care plan alone is valued at between 26 and 40 million dollars.

"That simply reflects the enormous increase in medical costs and the growing sophistication about what is needed to take care of people in catastrophic cases," said Byrd.

"For instance, the most expensive case is someone who has been catastrophically injured, but is cognitively intact. That person not only has hospital and medical needs, but they also need to be educated. They need to learn and communicate. That presents an incredible challenge.

"Look at Christopher Reeve," Byrd said. "Properly cared for, he'll live into his 70s, and he's a quadriplegic on a ventilator. Take that many years of care, and you have an enormous number. Why should our clients be entitled to any less care than Christopher Reeve?"

Raleigh plaintiffs attorney Don Strickland said the rate of inflation also has to be taken into account.

"Medical costs have been rising even higher than inflation," he said. "So when a case pays out over 30 or 40 years, you have to factor that in."

The prospect of future medical advances also affects life care plans, according to Strickland.

"For instance, future medical technology may help people regenerate nerves or rebuild knees," he said. "A client may be struggling mightily to walk now, but in 15 or 20 years, they may have devices that make him a bionic man. He's got to be able to afford those technological advances to enhance his life."

Large verdicts can breed large settlements. Holt also noted the long-term impact of huge verdicts like the $23.2 million childbirth tort award in Griffin v. Teague three years ago.

"Large verdicts show defendants and their insurance carriers how jurors value various kinds of damages," Holt said. "That impacts two things: the amount of liability insurance purchased and the size of settlement offers, particularly as to geographic region."

The amount of insurance coverage is especially critical in medical malpractice cases, according to Holt.

"In other types of negligence cases, such as products liability, you might have a corporate defendant with large assets," he said. "But when you go against a medical provider, how much can be paid hinges directly on the amount of insurance coverage."

The $10.75 million settlement in Snell came out of Gaston County, Holt said.

"Adjusters will often say to us that in a rural county there's never been a medmal verdict higher than so and so. Settlements like Snell show them that people across the state are not dramatically different."

More sophisticated jurors. The explosion of media outlets, especially law-related cable channels, has also triggered larger recoveries, according to Ellis.

"People are more informed about what goes on in courtrooms," he said. "They're more knowledgeable about the cost of things and perhaps big awards don't scare them as much as they used to. With 50 cable channels, jurors have the same access to information in Avery County that they do in Wake."

Strickland agreed.

"Particularly with closed head injury cases, I think the public understands a lot more than they did in the past," he said. "Jurors may know people with closed head injuries. It's not the invisible epidemic that it used to be."

Sharing information. "Another thing is that the plaintiff's bar is becoming more sophisticated," Ellis said. "It's better organized than the defense bar. For instance, you can go to the Academy of Trial Lawyers website and find someone that's sued Wal-Mart before. They've done a better job of networking than the defense bar."

Strickland said that more expert information is available to plaintiffs lawyers than ever before.

"There's better medical evidence and literature to support a lot of injuries that wasn't widely available before," he said. "In trial lawyer magazines and academy publications, there are always articles on how best to try a closed head injury case."

Punitives. In some big settlements, another factor driving up settlements is the threat of punitive damages.

"Take nursing home cases," said Ellis. "If a 90-year-old plaintiff develops bed sores and for some reason passes away, let's be realistic: how big can the amount of compensatory damages be?

"But if the plaintiff shows the nursing home had a pattern of understaffing, those numbers could be different," he said.

Winston-Salem attorney Clifford Britt said the prospect of punitives played a significant role in the $9 million settlement in Doe v. FirstHealth of the Carolinas. In that case, a newborn infant was placed on hot water bottles that had been overheated. The child suffered severe burns, then developed meningitis which caused brain injuries.

"At mediation, the defense said they didn't give any weight to our punitives claim because they didn't think it had a chance of succeeding," Britt said.

"I don't think that view really held up when it came time to settle the case."

Timeline Of Catastrophic Injury Verdicts, Settlements

Following is a list, in chronological order, of the largest catastrophic injury recoveries reported to Lawyers Weekly since 1990.

A significant trend: a large jump in the size of recoveries, beginning in 1997.

Jan. - Sept. 2000

• September 13, 2000: $9.5 Million Settlement While Appeal Pending — Garbage Truck Ran Over Boy Walking To School — Traumatic Brain Injury, Amputation — Total Meds Of $780,000 — Contrib Defense Struck — Wooten et al v. Waste Industries, Inc. et al (Durham County; 98 CvS 1078) — Plaintiff's Attorneys: Bill Thomas and Jay Ferguson, Durham; and Don Strickland, Raleigh.
  
  
• June 2000: $9 Million Settlement — Infant Burned After Birth — Brain Damage — Meningitis — Jane Doe v. FirstHealth of the Carolinas dba Moore Regional Hospital (Moore County) — Plaintiff’s Attorneys: Clifford Britt and Tom Comerford, Winston-Salem; Zachary Bynum III and W. Everette Murphy IV, Winston-Salem
  
  
• March 31, 2000: $10.75 Million Settlement — Obstetrics — Delivery — Severe Brain Injury, Hypoxia, Cerebral Palsy — Doctor, Hospital Sued — Carlisle A. Snell et al v. Gaston Memorial Hospital et al (Gaston County Superior Court; 98 CvS 4491) — Plaintiff’s Attorneys: Mark Holt, Raleigh, and Wade Byrd, Fayetteville.
  
  
• May 23, 2000: $6.1 Million Verdict — Obstetrics — Decreased Fetal Movement — Hypoxia — Mental Retardation, Spastic Quadriplegia — Past Meds, Life Care Costs of $347,000 — Dame v. Adkins (Nash County Superior Court; 96 CvS 1838) — Plaintiff’s attorneys: William Holdford and Roger Young, Wilson; Stephen E. Erickson, Great Neck, N.Y.

1999

• August 16, 1999: $7.5 Million Mediated Settlement — Driver Hit Pedestrian — Double Amputation — Drake v. ReUse Technology (Wake County) — Plaintiff’s Attorneys: Howard Twiggs and Doug Abrams, Raleigh.
  
  
• Jan. 16, 1999: $9 Million Mediated Settlement — Auto Negligence — Closed Head Injury — Right Eye Blind — Past Meds of $430,000 — $1.4 million Lost Wages — Estimated Future Meds Between $8-11 Million — Frangos v. Name Withheld (Mecklenburg County) — Plaintiff’s attorneys: Rick Anderson and Wm. Benjamin Smith, Charlotte.

1998

• June 25, 1998: $9.25 Million Mediated Settlement — Pregnant Clerk Beaten By Robber — Negligent Mall Security Alleged — Permanent Brain Injuries, Coma — Past Meds Of $1.5 Million — Marker v. Owners Of Silas Creek Crossing Shopping Center (Forsyth County) — Plaintiff’s Attorneys: Clifford Britt and W. Thompson Comerford, Winston-Salem.
  
  
• March 20, 1998: $7.48 Million Settlement — Scaffold Collapse — Quadriplegia — Premises Liability — $740,000 Comp Lien Waiver — Mitchell v. Goode (Durham County Superior Court; 96 CvS 00604) — Plaintiff’s Attorneys: John Alan Jones and H. Forest Horne Jr., Raleigh.
  
  
• Jan. 15, 1998: $8 Million Settlement — Failure To Treat Neurologic Injury On Time — Quadriplegia — Ventilator Dependent — Past Meds of $300,000 to $500,000 — Price v. Sattler (New Hanover County) — Plaintiff’s Attorney: Bill Faison, Durham

1997

• Sept. 5, 1997: $23.25 Million Verdict — Childbirth Tort — Skull Fracture — Brain Injuries, Hypoxia — Lifespan Issue —— Plaintiff Estimated $14- $17 Million Future Meds — $1 Million Lost Wages — Griffin v. Teague (Mecklenburg County Superior Court; 95 CvS 13212) — Plaintiff’s Attorneys: John Edwards and Mark Holt, Raleigh
  
  
• July 8, 1997: $10 Million Verdict — Medical Negligence — Ruptured Disk Removal — Quadriplegia — Lost Consortium — $704,000 Present Value Of Lost Earnings — Past Meds, $395,000 — Future Life Care Needs, $1.3-$2.7 Million — Carter v. Hucks-Follis and Pinehurst Surgical Clinic (Hoke County Superior Court; 94 CvS 336) — Plaintiff’s Attorneys: Joe McLeod and William Aycock Jr., Fayetteville.
  
  
• January 10, 1997: $30.9 Million Total Settlement — $25 Million Compensatory Verdict — Products Liability — Pool Drain Sucked Out Child’s Intestines — Lifetime Care Estimated $12-20 Million — Lakey v. Sta-Rite Industries, Inc. (Wake County) — Plaintiff’s Attorneys: John Edwards and David Kirby, Raleigh.

1996

• Sept. 26, 1996: $6 Million Childbirth Verdict — Mental Retardation, Blindness — Brown v. Bowen et al (Nash County Superior Court; 93 CvS 1519) — Prior $2.5 Million Settlement With Other Defendant — Plaintiff’s Attorneys: Jimmie Keel and Susan O’Malley, Tarboro 

1993-1995

• No catastrophic recoveries exceeding $6 million were reported to Lawyers Weekly for these years.

1992

• Dec. 11, 1991: $7 Million — Included $6 Million In Punitives Against Hospital, Corporate Parent — Psychiatric Patient Suicide — Premature Discharge — Insurance Ran Out — Muse v. Charter Hospital (Guilford County) — Plaintiff’s Attorneys: Wade Byrd, H. Dolph Berry, Robert A. Bell, Fayetteville.
  
  
• April 24, 1992: $6 Million Total Settlement — Auto Negligence — Mother, Two Sons, Two Family Friends Injured — Kim v. Poling & Bacon Construction Co. (Wake County Superior Court; 92 CvS 00111) — Plaintiff’s Attorneys: John Edwards and Kim Church, Raleigh

1991

• June 19, 1991: $15.1 Million — Railroad Crossing Accident — Quadriplegia — Plaintiff Awarded $13.6 Million, Including $5 Million Pain, Suffering — Wife Received $1.5 Million — Dixon v. CSX Transportation, Inc. (U.S. Western District) — Plaintiff’s Attorneys: R. Kent Brown, Robert Newkirk, Charles "Mac" Sasser, Charlotte.
  
  
• June 28, 1991: $6.29 Million — Auto Negligence Verdict — Cabbie, Trucker Ran Red Light — Plaintiff Suffered Permanent Brain Damage, Coma, Ruptured Aorta, Intestines — $1 Million Lost Consortium — Park v. Erwin — Plaintiff’s Attorneys: H. Edward Knox and Dianne Wall, Charlotte.

1990

• Nov. 20, 1990: $15 Million Verdict - Nursing Home Negligence - Delaying, Switching Medicine - $7.5 Million Punitives - In re Estate of James v. Hillhaven Corp. (Hertford County) - Plaintiff's Attorneys: Thomas W. Henson and Ronald D. Manasco, Rocky Mount.
  
  
• October 1990: $9 Million Medmal Settlement — Failure To Diagnose Meningoccemia — Quadruple Amputee — Pritchard v. Coastal Emergency Services — William Thorp, Charles Bentley Jr. and Annie Sullivan, Raleigh.

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