00:10:11 - 05:10:11
Jarrod Bailey 0:09
Okay. Everybody, welcome to reimagining healthcare a new dialogue with risk and patient safety leaders. Presented by Medplace. We're excited to bring you conversations with top risk and patient safety thought leaders from organizations around the country. Please subscribe to get the latest news and content. And if you found value from this episode, please share it with your colleagues who'd like to see meaningful dialogues created around the community. And if you're interested in participating as a guest, please email us at speakers at Medplace.com I am Jared Bailey. I'm the CEO of Medplace and playing your host.
I'm joined by Karen Knowles, the executive vice president at Gallagher Bassett healthcare Hey, Kara. Hey. So let me let me give a little bit of your background here. So Miss Knowles holds a juris doctorate and it has over 18 years of medical malpractice program claims litigation management experience. In her current role at GV specialty Kara is responsible for professional liability and general liability claim management for multiple healthcare systems, including a large multi hospital risk retention group and a multi specialty Medical Group with 1600 physicians. So I'm sure you see a lot of interesting things through your day. duties include identification and implementation of litigation strategy, claim reporting subcommittees, the Board of Directors, development of clean trends and lessons learned, collaboration with risk managers, defense counsel, access carriers and negotiating settlements. That's a lot of stuff that you do. Welcome, Kara. It's good to have you.
For those who are unfamiliar, so we're going to talk about the rise of nuclear verdicts today. It's top of mind for everybody. Everybody's talking about it. We've seen some pretty incredible things happening in the news lately. So for those who are unfamiliar with the term, can you tell us what a nuclear verdict is?
Kara Knowles 2:23
Yeah, no, Thanks, Jared. I appreciate you inviting me to be here today is very much a hot topic right now is these nuclear verdicts. And you mentioned my background, I kind of have my foot in defense counsel, land risk management claims management, and this is a topic that really bridges all three and, and Genesis nuclear verdicts originally came out of the trucking industry, and related to verdicts kind of north of $10 million. And they were an anomaly and things that really didn't hear about very often, unfortunately, what we're now seeing is that term, the 10 million, some people still use it. But now we're often talking about 50 million or 100 million. We're really talking about these kind of out there. verdicts that kind of shocked the industry when they come down. And what you know, I think even more interesting right now, is we're talking about nuclear verdicts, when we really haven't been trying cases. You know, for the past two years, jury trials have been no, we just really haven't had them with court closures because of COVID. And so I think everyone's sitting up, because our reemergence into jury trials is faced with these nuclear verdicts have increased both frequency and severity.
Jarrod Bailey 3:45
So they're increasing in frequency, do we have hypotheses for why that's happening?
Kara Knowles 3:52
Yeah, I think there's kind of a million different reasons why perhaps is happening. And they all fall under a big umbrella that we're calling social inflation. So it's not that the patient injuries are getting worse, or that the cost of providing care for catastrophically injured patient is different. It's really about the perception of the jurors, generally, and with regard to litigation. And so kind of drilling down a little bit more on that. What we're hearing in the field is jurors are angry, in general. These are folks that are kind of maybe at unease about their own kind of economic or social situation. There's folks that are that are not happy with kind of corporate America. So where in the past I would say that verdicts were driven, maybe by sympathy. We're kind of seeing a shift where they're being more driven by I anger. And I think the other piece to that is that we're seeing complacency around big numbers, the numbers that are getting thrown out, really didn't shock us socially anymore. Their numbers the 100 million dollar verdict is a number that we're hearing about in the news. So we're already becoming a desensitized to it, is that when we're in a case, and they're asking for that, it doesn't see is out seem as outrageous, as perhaps it did 10 years ago.
Jarrod Bailey 5:32
Yeah, it's interesting as we're all consumers of healthcare, we're all hearing the headlines, and I do feel the desensitization to it. You know, and then you've got some things like COVID, that just put gasoline on this, like, fire, right, and it's created this, it feels like, released with part of the population, it created this, like Gulf, and in all these headlines that are kind of pitting patients against doctors, and it's really unfortunate to see but you're kind of seeing this like this, like cultural shift, maybe underneath it. And maybe that's kind of what you're intimating here. You know, and together with these big numbers that that do create some desensitization, it's, it's pretty wild. I read that ASHRM actually the American Society for healthcare risk management in AON did a study, right. And they were just looking at these $10 million or higher verdicts. And I read that they've tripled and last decade, they've gone from 11 and 2010 to 38 In 2019. That is pretty wild.
Kara Knowles 6:50
Yeah, absolutely. It's sort of indicates that North of 10 million area is more of a working layer now, though, that's not as uncommon as it had been. And it's certainly we're seeing a change in strategy with how plaintiffs attorneys are litigating cases, right. The existence of life care plans are just huge. I mean, anytime there's a catastrophic injury, there's going to be a big number life care plan that really isn't based on reality in terms of what it would cost to pay for these services. But you know, they're already starting at a bigger number. We're seeing kind of a decrease in tort reform being available to lower verdict numbers. And then the subjective nature of pain and suffering, right, that's just a number. There's no benchmark for it. And we're seeing plaintiff attorneys really stress and take that number as big as they can even bigger than these life care plans. So you know, certainly play as firms know how to take all these topics, take the social inflation issues, couple of with the bad damages case, and the jury's willingness to accept the big numbers.
Jarrod Bailey 8:09
Interesting. So interesting. So the plaintiff side is getting really good at building these big numbers and supporting them and putting those in front of juries. And I just had a guest, who's a risk manager, Denise Atwood, and she's, she recognized how well the plaintiff side is organized. And it's not just you know, in one market, it seems in a lot of markets, and it's impressive, how well organized the plaintiff site is. And when you start doing a lot of that information sharing and that sort of thing, best practices, you can sort of see a united front, that's creating this big impact. I don't know that I see that all the time on the defense. I don't see I don't necessarily see that level of organization and collaboration. on the defense side, probably not even in the same ballpark. So I don't know if you have any opinion on that. But it was a topic that just came up.
Kara Knowles 9:07
Yeah, absolutely. You're dead on the play, defense firms are very well organized, the share information better. We're behind the curve with regard to any of that. On the defense side, I think we're starting to see a little bit of inroads on that in terms of the use of national account trial counsel. So there's across the country, a dozen probably more firms that are kind of becoming specialized in taking on these big catastrophic trials, and they're repeatedly going against the same attorneys. So being able to learn from a trial, take it to given the transcripts, the witness statements and use them in the next event. So we're starting to get a little traction, but way behind the curve in terms of what the plaintiffs bar has done with regard to collaboration and share
Jarrod Bailey 10:00
Right. Yeah I see it even in the technology side of things, we see some pretty impressive tech companies coming to for on the plaintiff side, but you don't see as, as much, probably not even a fraction of it on the defense side. So it's interesting, it's interesting to watch, there's definitely some bright spots, there's some leaders in the industry that are that are doing a good job of organizing on the defense side, but certainly something I think you're right, everybody's on their back foot at the moment. So okay, so all the stuffs happening, all of these nuclear verdicts are start starting to be on the rise. Like what are what are carriers and self insured hospitals? You know, you guys, are a TPA, working with self insured hospitals and others like, what, what, what can be done about this, like, what are people doing about this?
Kara Knowles 10:52
Yeah, and I think it falls into a couple different buckets. So one is on the litigation front what can what can we do? And I think we touched on collaboration, B, I think there has to be a change in mindset with how the defense side presents damages. You know, historically, there was a thought that if you mentioned damages, you were somehow de facto conceding liability and causation. You just can't do that anymore, you've got to give the jury an alternative, you've got to be able to give them something else to go off on as they evaluate the damages case, and do it obviously, do it in a way that you're not compromising the liability or the causation side of things.
You know, we're seeing a little bit of development of private trials. So using a retired judge, or other alternative venue to litigate a case where you're not able to settle it, but without the risk posed by a jury, and without the cost or time associated with a jury trial. So tearing can have ideas of those popping up. And I think people are really trying to maybe get creative about how to litigate these cases. And it sounds a little counterintuitive I think we need to try more cases, which sounds crazy that in the face of nuclear verdicts, I'm suggesting we try more cases. But we're, it looks like we're running scared. Right? So that's driving up settlement values, is driving up kind of venue data. And, yes, you have to be smart and selective about those cases that you do take to trial. But I think we've got to get back out there and try to offset the narrative against the nuclear verdicts, with some defense verdicts.
Jarrod Bailey 12:49
Interesting, right. So it's an optics thing. And if all we're reading in the news is win-wins on one side. Yeah, it makes it makes sense. Well, you've got like early resolution programs and CRP stuff, and you've got a lot of really great programs pushing for better communication early on that sort of thing. Are those exacerbating the problem? Are they are they helping, like, what? Where did those fit?
Kara Knowles 13:20
Yeah, no, I think it's a great point. And I think it's highlighting that we need to be proactive before the litigation before we're at the courthouse steps getting ready to pick a jury. I think it starts with, we generally know which of these cases are going to pop, right it's going to be sexual misconduct cases, sepsis, neurologic injuries to high wage earner adults or birth injuries. So we know those are our most dangerous subset of cases. So what are we doing at the beginning, when those events happen, or certainly when we first get noticed, have a claim to get ahead of them? You know, by the time we get a claim letter from a plaintiff's attorney, they've already done about 10 expert reviews, they've had the records reviewed, they have a whole theme. And we don't want to be taking their lead. Right. I think we've really got to continue to stress proactive claims management, where from the outset, when you have an event that results in one of those type of injuries. Let's get early expert review. Let's get staff interviewed. Let's pull policies and procedures. Let's figure out what our story is. and not wait for plaintiff to knock on the door.
Jarrod Bailey 14:44
It just makes sense. Right? Be proactive. rather than reactive and reacting way too late right after there's already been bad poor communication and you know, it Anger and other resentment and things like that building up over time confusion, right. Okay, so I don't know what the watercooler conversation sound like, over it GB, but you know, you were looking at some things like this $97 million case that happened to a family with a boy that was injured at birth, you've got this Vanderbilt case, like, what? What's the chatter? Like what, what's really kind of getting attention right now? And how are you like working with your clients to like use these cases to maybe change strategy or implement new things or?
Kara Knowles 15:44
For sure, and I think, again, it kind of goes back to the beginning. You know, the best time to settle a case is early and pretty close after you recognize liability challenges. For a couple reasons, as you just kind of noted, people are less entrenched, people have less time and money into it. Often, it's before a plaintiff's counsel is affiliated in another attorney, that they're going to have to split views with before people spend the next kind of four years litigating the case. And we're also seeing private equity funding these cases on behalf of plaintiffs firms fascinate Oh, yeah. And so it, it really gets complicated by the time you get to the jury, and I'm not sure at that point, other than trying the best possible case you can with regard to the Iowa verdict. I'm not sure there's much else you can do at that time. And so yes, there's going to be those cases where you've done all the right things. And you're just told to pounce and about 10 different ways. And so you have no choice, and you have to be then ready to try the case. But I think what we're talking about is how to really get after these cases early, have standard processes in place. You know, with regard to the Vanderbilt one, making sure you know about work arounds in your organization, and have you address those? You know, certainly we're hearing with regard to the Vanderbilt one concern from the hospital systems and from nursing wanting to know if this is what's ahead for them unfortunately, a tough thing to swallow on top of everything else, hospitals and healthcare systems have had to manage in the last few years.
Jarrod Bailey 17:40
Yeah, it's wild. We have nurses on our staff and know, we know nurses, and it's just all eyes are on this particular case, because of the implications for the future. It's tough. It's a really tough time. And Vanderbilt is as far as delivery of care is a leader in in does some amazing stuff. Right, and Jerry Hickson and his group down there, just so it can really kind of happen anywhere. But once it becomes a claim, and you know, bad things happen, that that's sort of the cats out of the out of the bag at that point, but are you seeing any best practices from hospitals that are doing things earlier? Or even before? You know, before the bad things happen? Have you seen any kind of interesting things being done at the hospital level just as far as like quality programs and things like that, that are innovative?
Kara Knowles 18:38
Yeah, I've seen you're exactly right, the best way to avoid a nuclear verdict is don't have the event happened to begin with. Right. Certainly, that's an optimistic theory, but we're hearing more of an outreach for kind of risk assessments. You know, I think people are concerned about what, what may be going on that they're not even aware of. And having third parties can come in and identify risk potential, and then provide best practices to help with those. Certainly, seeing those, I don't know about you have you? Are you seeing other things kind of pop up with regard to the risk management, best practices kind of thing?
Jarrod Bailey 19:16
We're going to we're going to see more of this by virtue of the work that we're doing, but the biggest trend that we see is, I wouldn't say Historically, most many hospitals, maybe it's most have said, Hey, we're not going to, if something bad happens, we're not going to go outside of our group, and we're not going to talk about it, we're going to deal with it internally. And I would say that we've seen a lot more movement towards starting to bring in outside like doing reviews outside and getting peer review done. Not in the same department anymore. But you know, doing a number of peer reviews. You know from folks that Have no skin in the game and you know, they've gotten neither competitive nor partner motivations to, to cover for anybody, right? It's just hey, here's just best practices, here's good medicine, let's talk about when it's not the best. And let's improve that. In so I would say that we're seeing a lot more of that willingness to go outside of these groups that you just can't get rid of some of that bias. It's just natural world humans, right, we all have to work with everybody each other all day. And there's only so much I'm going to say you're due for or against somebody that that I'm tied to. So, anyway, so I would say that is probably the biggest thing that I see.
Kara Knowles 20:46
I think that's kind of in line with what we're seeing in that it's people are willing to ask for help, and a little less defensive clothes, in posture with regard to these things. So I do think that that's a good next step.
Jarrod Bailey 21:01
Yeah. Well, so with your team, in which you'd be in general, what are you guys finding yourselves doing more of these days? Like, what kind of questions are your clients asking? And were they asking for help, specifically? Or is it was the same? Same things? As usual? Are you seeing anything new pop up?
Kara Knowles 21:21
Yeah, I think, um we do a lot of self-insured retention claims administration. And so I think we're seeing these verdicts are causing changes in insurance structures. So hospitals and health systems are having to take on more risk where the SIR, self insured retention, could have been a million dollars. Now that's looking at like $5 million. And so that's a lot more risk for these hospitals to manage on a day-to-day basis, and then certainly manage financially. So I think we're seeing additional opportunities to partner with those folks to help them either develop a claim program or be a partner with them in the claims program. And then I think we're also just seeing people step back and look at their last run, and their lost histories and say, Okay, what can we do with these open cases to try to speed things along? You know, can we try to resolve them? Can we get them off? Off the books?
Jarrod Bailey 22:22
It's interesting. I, this certainly is not universal. But there's, there's a few carriers that I know, that med insurance, carriers that that know, to the day, how much to the dollar to the day, how much a claim costs to be alive, right? As long as it's alive, it's costing us X number of dollars per day. And it's really interesting. You know, when you start putting those kinds of terms, it brings a lot of focus in terms of like how do we close some of these out? How do we get some of these off the books?
Kara Knowles 22:56
For sure, and I think the courts are going to start helping in that regard, because we're, we're seeing cases now have viable trial dates again, and we're seeing ADR mediations arbitrations getting ordered by the courts. So they're starting to move things a little bit, there's still certainly a backlog, particularly given the posture of civil cases, secondary to criminal cases. But yeah, we're there helping a little bit as well.
Jarrod Bailey 23:26
Yeah. I mean, how? What's the over under on this backlog getting cleared in the next year? I mean, how much? How much are we looking at?
Kara Knowles 23:37
I don't know. You know, I think it also depends, everybody's holding their breath, hoping that there's not a step backwards, right, everyone's slowly getting towards business as usual. You know, it is tricky, because historically, medical malpractice cases, take a long time to try. Certainly, you can do it in five days, but because of how many experts are involved, it can be three weeks or four weeks, and courts don't want to spend four weeks of their trial calendar on a single case they want to try to get those through as many as fast as possible. And so we are seeing the court, order more settlement conferences, having the parties show up in the courthouse and say, Why can't you settle this? They would like nothing more than for us to help them get their docket reduced.
Jarrod Bailey 24:28
Sounds like it I know where at least I've heard that as COVID was just starting and then right in the middle of it that plaintiffs firms were holding may have been holding back, right. They were holding back they felt like you know, our physicians and our nurses, the frontline were like they're all they had a glow halo effect around them, because they were saving our lives. Right and they were in the trench. And I heard a lot of you know, plaintiffs firms were holding back on cases. I don't know if that's true. And I don't know if we've seen some of that. Holding back now start to release now that we're sort of we've been through COVID. A couple of couple of times. Have you seen anything like that? Is there any trend one way or the other? Good point.
Kara Knowles 25:17
Yeah, I think we, we were really hoping on that halo effect that these healthcare heroes, now that they're sitting in a jury trial, you're not going to want to punish them. Right? We haven't quite seen that play out. We have to some degree, when we're talking about trials of the local nonprofit community hospital, where everybody on the jury goes and gets their care for various systems, we're not really seeing it. And unfortunately, what we have also seen is an increased skepticism around medical evidence. You know, people aren't just accepting what the medical expert has to say at face value. They want to they have their own ideas about the medicine or science, there's a little bit more distrust on the various theories, perhaps particularly if it's not a mainstream idea that your expert is speaking to. So juries are a lot more skeptical. And I, for me, at least, that was a surprise as we've gone back into our into the jury trial system.
Jarrod Bailey 26:22
Yeah, indeed. Well, so I guess with all of these, these nuclear verdicts that keep coming faster and a little bit bigger, sounds like you know, some of the advice that you that you guys are spending with your customers just looking at their risk stack and making sure that that is keeping up with the trends, right. I mean, you can go years, and I'd have one problem. And then one of these nuclear verdicts hits and all sudden, you're like, well, we didn't, we didn't engineer our capital stack, or our risk stack to, to accommodate something like this. Anything else that you guys are doing as far as trends? Or is it just keep getting better at defending and keep making better decisions early on?
Kara Knowles 27:07
You know, I think it's also be insensitive to the timeline, right, a case that has a verdict hit today in 22. That could be care from back in 2014, or 2015. And not that you should discount that. But I think you should also, retrospectively look back and say, Okay, what was happening in our organization at that time the different leadership with different culture? Have we made changes, hopefully, in those five years? And then also, what can we continue to learn? Because we are going to there's always going to be, especially in med mal, a five year lag, sometimes even more, based on when the event happens to when you're getting that verdict. So I think it's understanding that timeline and looking for opportunities throughout the entirety of the timeline.
Jarrod Bailey 27:58
Yeah. Yeah. You know, I've also noticed, I would say, this is another trend, I would say that in a lot of hospitals historically, that the risk group has sort of been separated from the quality and patient safety group. And, and not enough data transferring between the two. And I would say that that's, that seems to be eroding that for places in some places, it's a very integrated process. And it's, it's really fantastic to see, but, and others, I see where they've been historically separated, I see that that gulf closing, and I see data being shared back and forth, in a little bit more helpful way, right. As far as you know, claim may happen historically it goes to the risk group, and you never hear about it again. But then I'm seeing now with trend is claim happened, but then what kind of learnings can happen throughout that go from that feedback into the delivery of care and the quality systems?
Kara Knowles 28:56
No, I think that's a great point, I think, I think claims risk quality were almost three separate silos, and we are starting to see them working more collaboratively. Because everyone's got the same goal, right, which is patient safety. And so really trying to great point increase kind of the sharing among those different departments.
Jarrod Bailey 29:17
One thing I didn't think to ask you, but I'll ask you, since I've got you, is there anything happening from a laws that are being proposed or new laws on the books that are raising the eyebrows or either creating some concern or like concern that this may become a trend or hope that this this could become a trend like anything happening from a
Kara Knowles 29:43
Yeah, I think from a legal standpoint, the big unknown is COVID, immunities and how that's going to play out in the future through the prep act. You know, there's different decisions starting to come down on you know, when a patient event injuries happened during the thick of COVID? What immunities might exist? And how do those play out? And so we're really early on with regard to those cases. And I think that's going to be fascinating to watch how that comes out. Because it isn't just a COVID patient who had an injury because of COVID is a patient that was treated during the pandemic, that maybe there was staffing shortages, or equipment shortages, or inability to treat? I mean, there's so many ways that can be interpreted. So that's going to be pretty interesting to watch.