A miscreant is simply a troublemaker. When it comes to a medical malpractice lawsuit, the biggest miscreant is the defense attorney followed closely by the medical malpractice insurance company.

For a doctor, medical malpractice insurance coverage is the difference between financial security and ruin. I practice in the state of Maryland. Maryland law does not force physicians to buy medical malpractice insurance. Nevertheless, doctors must carry a policy, which has a minimum limit of $1 million per claim and a $3 million aggregate annual limit, in order to practice here.

This is true because to remain in practice, doctors need to do business with hospitals and health insurance companies. Hospitals require doctors to carry active malpractice insurance for privileges. Commercial health insurances do not do business with a doctor as a provider unless there is proof of coverage. Even so, if a physician decides to practice without insurance in Maryland, they must disclose this in writing or explicitly post it in the waiting room. These are less guarantees of a patient’s right to safety in Maryland than they are disclaimers of a doctor’s right to professional privacy in Maryland. Such regulations are only possible if they are promoted by defense lawyers.

Medical malpractice insurance pays all defense litigation expenses as well as settlements or verdicts. These litigation expenses arise because defense lawyers are hired by malpractice carriers, who pay them win, lose, or draw.

Regarding medical malpractice insurance and medical malpractice lawsuits, there are many things about which all of us, including doctors, do not know. Mostly, it is the technical relationship between the defense lawyer, the doctor and the medical malpractice insurance carrier in the event of a lawsuit. This is a tripartite relationship, in which the legal and financial obligations are split by technical dynamics, which depend upon who defense lawyers perceive as their most important client. What results are the following:

• The two-client model: In most states, both the malpractice carrier and the physician are classified as co-clients of the defense lawyer.
• The one-client model: In some states, including Maryland, the health care provider is the client. The insurance carrier is classified as a third-party payer and not as a client.

Either model is a tripartite relationship. In fact, in both models the malpractice carrier is a client, albeit a de facto client. The carrier retains and pays the defense firm directly on an hourly basis, as per the “duty to defend” clause found in the physician’s insurance policy. However, conflicts of interest frequently surface. For instance, a carrier may prefer to settle a case to minimize financial exposure, while a doctor may want to fight on to protect his or her reputation. To make certain the malpractice carrier remains the ultimate authority, insurance policies include a “hammer clause.” This establishes that if a physician refuses a settlement offer, which the carrier wants to accept, the physician is liable for any verdict that exceeds the settlement offer. I have no doubt that defense attorneys have their fingerprints all over this hammer clause.

Under the Maryland Attorneys’ Rules of Professional Conduct (MARPC), if such a conflict of interest emerges, the attorney’s highest, undivided duty belongs strictly to the insured health care provider. I have no doubt that defense attorneys have their fingerprints all over this as well.

At first glance, this seems to neutralize a conflict of interest. Looking closer, however, this maintains the tripartite relationship, which favors both the malpractice carrier and the defense counsel. Although a lawyer’s primary loyalty remains with the insured health care provider, there are circumstances in which the defense lawyer can follow the carrier’s strict billing and litigation rules as long as such rules do not materially interfere with the lawyer’s independent professional judgment. Essentially, the usual conduct of business by the insurance carrier remains unchallenged by MARPC, which screams involvement by defense lawyers. Also, how such conflicts of interest are resolved is not the subject of tort reforms in the state of Maryland, which also screams involvement by defense lawyers.

In the final analysis, in Maryland, defense lawyers and malpractice carriers exert the upper hand. Because they infiltrate all aspects of governance, from state to local government, and in the medical society, they are politically powerful and will remain so. In the meantime, all the users of the health care system in Maryland, be they physicians or patients, pay the price because the way the health care marketplace works is to pass through all legal costs to users in the system. This is not only true in Maryland, but it is true everywhere until we all wake up and see how defense lawyers and malpractice carriers continue to manipulate medical malpractice lawsuits in ways that benefit them. This is what miscreants do best.

Howard Smith is an obstetrics-gynecology physician.