Supervisors Bypassed in Malpractice Settlements : L.A. County: System allows bureaucrats to pay out millions of dollars. Critics call for more accountability.

Without any review by elected officials, Los Angeles County spent nearly $100 million during the last three years to defend and resolve malpractice cases brought against the county’s troubled public health system, records and interviews show.

Virtually all other litigation--from accidents on county property to alleged brutality by sheriff’s deputies--comes before the County Board of Supervisors for review and approval of major settlements.

But for a quarter century, decisions regarding medical malpractice payouts have been delegated to the county counsel and the chief administrative officer.

And in recent years, while malpractice costs have soared, Chief Administrative Officer Richard B. Dixon has left the decisions entirely to county lawyers and outside consultants. “I don’t know a scalpel from a forceps,” Dixon said.

The system, which is unusual among the nation’s most populous counties, was adopted to shield details of malpractice cases from public view, according to former county officials.

County officials defend the system, saying that complex malpractice cases are best left to legal and medical experts.

“I don’t see how (a review by elected officials) will increase accountability,” said DeWitt Clinton, county counsel and a board appointee. “I rely on the judgment of (experts) and I guess the supervisors would, too.”

The county recently has been criticized for conducting important business in private and for vesting extraordinary decision-making power in bureaucrats who have little accountability to voters.

Calling the malpractice costs “astronomical,” Supervisor Gloria Molina said in an interview that the board should review all major settlements. “I don’t see anybody holding the health department accountable for that,” she said.

If supervisors scrutinized the payouts, Molina said, they might find correctable problems that could save tax dollars and improve health care at the county’s six hospitals and 47 neighborhood clinics. The facilities largely serve the poor.

Recently, the supervisors, alarmed by $34 million in payouts by the Sheriff’s Department over the past four years, hired a counsel to investigate the problem and provide improved oversight.

The county health system, one of the largest in the nation, recorded about 4 million patient visits last fiscal year. The two busiest hospitals--County-USC Medical Center and the Martin Luther King Jr./Drew--have been cited over the past five years by state health officials and hospital accrediting authorities for problems that include insufficient staffing and deficiencies in patient care.

Records show that the cost of malpractice settlements and court awards has multiplied sevenfold in the past decade to a projected $38 million this year--more than the county paid last year to resolve all other types of litigation combined.

Individual malpractice payouts ranged from a few thousand dollars to a $1.75-million settlement, and dozens of cases resulted from injury or death to newborns. County officials said the rising number of malpractice claims and payouts reflects a national trend. They said adequate oversight of health care already is provided through hospital peer review, the county’s legal and medical consultants and state and national government regulators.

A majority of supervisors said in interviews that they either were unaware that the settlement of malpractice cases is left to non-elected officials or they approved of the practice.

Supervisor Ed Edelman, after learning about the practice, said perhaps the board should start reviewing all payouts.

“We should know when there are cases that show someone is not practicing (medicine) up to the standard that is expected,” he said.

Supervisor Mike Antonovich said he was under the impression that he and other members of the board approve malpractice settlements.

Supervisors Deane Dana and Kenneth Hahn said they prefer to leave settlement decisions and oversight to experts. “We really don’t have the time . . . (for) nit-picking small things,” Dana said. “If you don’t have good managers, you get rid of the managers. But when you have 86,000 employees, we can’t micromanage or we’re going to sink.”

One-third of the malpractice payouts, officials say, exceed $100,000. But the supervisors do not review any malpractice payouts, even though most other settlements exceeding $100,000 are routinely submitted to the board.

The supervisors also are not regularly informed about why their appointed county counsel has settled malpractice suits, nor of the amounts that the county has agreed to pay.

In other types of litigation, the supervisors--like their counterparts on the Los Angeles City Council and in other jurisdictions--discuss legal settlements in public and in closed sessions. The dollar amounts always are made public.

The county compiled a summary of recent malpractice payouts in response to a Times request under the state Public Records Act. But officials, citing privacy and attorney-client privilege, refused to disclose the names of doctors and other health professionals involved in the cases or disciplinary actions taken against them.

County figures show that nearly $100 million was spent on malpractice cases during the past three years, including $24 million for legal costs and $4.7 million to a private consulting firm. Awards and settlements climbed from $5.5 million in fiscal 1980-81 to $17.4 million in 1988-89, $23.7 million in 1989-90 and $26.6 million in 1990-91.

According to county records, payments approved during the past three years included:

* $150,000 to the six children of a 58-year-old man admitted to County-USC Medical Center and “essentially given no treatment for 1 1/2 hours” before he died of a heart attack.

* $200,000 to the family of a mother of five who “remained in (Martin Luther King Jr./Drew Medical Center) emergency room for 14 hours with little actual treatment” for a possible bowel obstruction and died after surgery.

* $580,000, plus lifetime medical costs, to the family of a baby born with brain damage at Olive View Medical Center because of a “delay in performing Cesarean section” because of a shortage of anesthesiologists.

* $690,000, plus lifetime medical care at county facilities, to a baby born at County-USC Medical Center who suffers from cerebral palsy and other ailments.

The largest payout was awarded by a jury last April to eight surviving children of Otis Robinson, who died after Los Angeles police arrested him for alleged drunk driving. A jury found that a junior resident at County-USC failed to properly diagnose Robinson’s broken neck and allowed sheriff’s deputies to take him from the hospital’s jail ward to the Central Jail. He received medical treatment the next day, but died.

The court awarded Robinson’s family $3.1 million but county lawyers negotiated a $1.75-million settlement in return for not pursuing an appeal.

Los Angeles County’s method of handling malpractice cases differs from other large jurisdictions contacted by The Times.

In Chicago, malpractice settlements--no matter how small the dollar amount--are approved in closed session by the Cook County Board of Commissioners, then are made public. The cost and number of payouts were not available, officials said.

“It’s the elected officials who are responsible for the taxpayers’ money,” said Karen Covy, a deputy state’s attorney in Cook County. “If there is any kind of problem with spending, they’re the ones who are going to be held accountable.”

In San Francisco, all malpractice settlements exceeding $5,000 are discussed by supervisors in closed session and the settlements are later made public. Total payouts were not immediately available.

In New York City, which spent $53.5 million last year on malpractice payouts, the city’s elected controller must approve the payouts, then they are made public.

Most Southern California counties, including Ventura and San Diego, which operate much smaller public hospital systems than Los Angeles County’s, take all malpractice cases to their county supervisors for approval. “Any time there is litigation involving anything, it always comes to the board,” said Bob Lerner, a spokesman for the San Diego Board of Supervisors.

In Orange County, where the county contracts with the University of California for medical services, settlement decisions in all types of litigation are made collectively by the chief administrative officer, county counsel and the county’s risk manager, but supervisors later are informed, said Ernie Schneider, chief administrative officer.

Los Angeles County supervisors established the malpractice system in 1967 on the recommendation of the county counsel and the chief administrative officer.

John Maharg, county counsel at the time, said supervisors were cut out of the settlement process at the request of doctors. “If the board settles, it is a matter of public record,” Maharg said. “The physicians didn’t like that at all. It exposes their errors.”

Harry Hufford, a former chief administrative officer who was county budget director at the time, said the county’s insurance company believed that confidentiality would make doctors more likely to settle cases than risk a costly trial. “If their career was at risk (through public disclosure), they would rather go to trial,” Hufford said.

Dr. Ronald Kaufman, associate chief of staff at County-USC Medical Center, confirmed that staff doctors want to keep the lawsuits out of public view. He said the county would have difficulty retaining its staff if it were to identify doctors who are sued.

The names of doctors, he said, are typically dropped from final settlements. That means the legal action is not reported to the Medical Board of California, which disciplines doctors, or to the federal agency that acts as a clearinghouse for malpractice cases.

The county stopped buying medical malpractice insurance in 1987 because of soaring premiums and became self-insured. But the system for reviewing malpractice cases remained in place.

Dixon said he doubted that supervisors “would make a whole lot of difference” in the outcome if they reviewed the many complicated malpractice cases against the county. In other litigation, he said, the supervisors usually go along with the recommendations of their attorneys.

Andrew Bliss, chief of medical legal affairs for the county hospital system, said a review of malpractice cases by supervisors could be beneficial.

“The difference it would make,” Bliss said, “is they would allocate the resources needed” to improve services--or to contract out some medical services to private contractors.

Officials said that part of the county’s rising malpractice bill is attributable to the number of high-risk patients referred or transferred to county facilities by private health facilities.

Phil Miller, principal deputy county counsel, drew this comparison between the county hospitals and other institutions: “A mechanic who sees Mercedes that are all less than 2 years old is going to do minor maintenance, and he is going to show his cost per vehicle down. A guy who is seeing ’48 Chevys is going to be doing major repairs all the time.”

Claims arising from childbirths accounted for about half of all payouts, records showed.

“We deliver a disproportionate share of the babies in this community, not just because the birthrate is highest among (the) relatively poor, but also because (births are) a very high malpractice risk,” Dixon said.

Officials called the number of lawsuits filed and the level of payouts low, but they were unable to provide overall statistics comparing the volume of patients versus malpractice payouts in Los Angeles to those in other major cities.

Medical experts say such comparisons are difficult because payouts vary according to the number of patients, the types of medical procedures, litigation policies and many other factors.

The Times found that malpractice payouts in New York City were higher last year than in Los Angeles County, but New York treated more patients. New York City--with 242,972 admissions, 30,662 deliveries, 1.1 million emergency room visits and 4.6 million outpatient visits--paid $53.5 million.

Los Angeles County--with 181,318 admissions, 40,963 deliveries, 317,576 emergency room visits and 3.8 million outpatient visits--paid $26.6 million.

National studies have found that, after explosive growth in malpractice lawsuits in the 1970s and early 1980s, the number of claims against hospitals leveled off between 1985 and 1990.

County officials said they already have an effective program to weed out bad doctors and correct procedural and staffing problems. As a result of a patient becoming a quadriplegic during an operation, for example, the county requires a neurosurgeon to be present during certain neck surgeries.

“Doctors meet and discuss cases and determine what should or should not be done differently to eliminate or mitigate problems,” said S. Robert Ambrose, assistant county counsel.

Los Angeles County Malpractice Payouts

Of the nearly $100 million spent by Los Angeles County on malpractice cases during the past three years, $67 million went to court awards and settlements and $24 million to legal costs, including private attorneys’ fees, records show. In addition, $4.7 million was paid to a private company--Professional Risk Management--to run the county’s malpractice defense program, including investigating cases.

During the past three fiscal years, 1,364 malpractice claims have been filed against the county. Of these, 484 were settled and 502 were rejected by the county without any litigation. A total of 549 cases, some dating back several years, are pending.

Following is a listing by county facility of malpractice payouts the past three years:

FACILITY FISCAL 1990-1991 1989-1990 1988-1989 County-USC $15.1 million $12.8 million $7.3 million Harbor-UCLA $2.5 million $3.3 million $2.5 million M.L. King/Drew $3.8 million $4.6 million $4.9 million Olive View $3.1 million $712,700 $465,500 Rancho Los Amigos $578,881 $595,548 $350,000 High Desert Hospital $3,750 $218,500 $5,000 Other* $1.6 million $1.5 million $1.9 million TOTAL $26.6 million $23.7 million $17.4 million

Figures include payments under structured settlements reached in previous years.

* “Other” category includes clinics, the Mental Health, Sheriff’s, Coroner’s and Fire Departments and miscellaneous.

SOURCE: Los Angeles County counsel’s office