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Medical Malpractice Suits and Private Equity Shields for Doctors

According to recent data, 9.5% of all annual deaths in the United States occur due to medical errors. With medical malpractice being the leading cause of death in our country, it’s more important than ever for patients to understand their rights. If you or a loved one has been injured, then you must have an experienced medical malpractice attorney to assist with your case.

Unfortunately, certain medical malpractice cases are encountering roadblocks to fair compensation. In some situations, the business side of the medical sector is changing the accountability for medical errors.

Private Equity Investments in the Medical Sector

In recent years, private equity firms have started putting their investments into medical businesses. The primary goal of a private equity firm is to put investor’s money into companies to generate a profit. Since the investment money is in the business, it affects how the business is managed because shareholder and investor outcomes are the priority.

When it comes to the medical sector, the investors are changing the way the acquired businesses are being run – which has an impact on both the staff members and the patients. While patient care is a priority, delivering quality patient support and maintaining profit margins is challenging. As a result, many medical businesses struggle financially, which is why some private equity firms are stepping in to help.

The trend is that patient care is often being negatively affected by these private equity investments. Not only is the quality of care being impacted, but there is an increasing concern about medical malpractice. If something goes wrong and a patient is negatively affected by a doctor’s neglect, then a medical malpractice lawsuit can be a way to access available compensation.

The problem is that the structure of these investments means that the private equity firm could be held accountable for the doctor’s mistakes. Since private equity’s goals are to minimize expenses and maximize profits, they have safeguards in place to avoid risk – including protecting against large payouts for medical malpractice.

Recent Medical Malpractice Case: Michael Simington

Recently, a medical malpractice case has been in the news because of the challenges the victim and his family are facing in their legal battle. In 2019, Michael Simington was 67 years old when he visited a urologist because he was having difficulty urinating. A biopsy was done, and the results showed that Simington had prostate cancer.

Even though the biopsy results came back positive, Dr. Ruben Garcia didn’t share these results with Simington until a year and a half later. Because of the delay in treatment, the cancer spread and eventually resulted in Simington’s death. It’s estimated that this medical malpractice caused Simington’s life to be shortened by 8 – 10 years, compared to the potential outcome if he had received prompt treatment.

When Simington hired a medical malpractice attorney and decided to move forward with his case, he encountered a problem. A private equity investment company owns the clinic where the doctor was working through the University of Texas and Tyler Health Science Center.

When a doctor is employed by a government entity, there are very limited options to sue for medical malpractice. If it’s possible to move forward with the suit, then the settlement is often much less compared to a typical medical malpractice suit. In this situation, Simington’s lawsuit alleges that the private equity strategy is to fraudulently hire doctors as professors as a way to shield them from lawsuits, even though they are performing health care services.

A Growing Trend in the Healthcare Industry

The reality is that private equity is increasing in the American healthcare industry. These larger companies are stepping in to buy hospitals, private practices, and even entire healthcare systems. The investors see potential for profits and are taking advantage of the opportunity. Recently, these private equity investors have been moving into academic medicine.

These acquisitions are causing concerns for Senators, researchers, and other people who are worried about the impact on the healthcare system. The biggest concern is that profits are being prioritized over patient care, especially in rural areas. While a private equity investment seems like a welcome opportunity because the money can revitalize a struggling healthcare business, the truth is that the heavy focus on profit eventually takes a toll on doctors and patients.

For-Profit vs. Non-Profit Medical Malpractice Cases

One issue is that hiring doctors through the private equity umbrella of a government sector (such as a university) creates a barrier for patients who are victims of medical malpractice. In Simington’s case, the doctor’s employment mattered for the lawsuit.

If Dr. Garcia were employed by a for-profit company, then it would have been a typical medical malpractice case. However, since the doctor was technically employed by a state agency, he was protected against medical malpractice suits. As a result, Simington would need to sue the university instead of suing the doctor directly, and there are many limitations affecting the timeline and type of malpractice cases that can be pursued.

Under a typical medical malpractice case, a patient can potentially receive up to $250,000 in noneconomic damages, with no limit on economic damages (such as lost wages and medical expenses). So, a patient can win a much larger settlement. But when the victim is fighting a two-tiered system where the doctor is employed by a government medical facility, the potential outcome is much more challenging. Not only is it unlikely that a case would meet the very narrow qualification requirements, but the maximum payout would be $250,000 for both economic and non-economic damages – a fraction of the payouts for typical medical malpractice cases.

Expert Solutions for Medical Malpractice Cases

Our team at Wormington & Bollinger has years of experience with medical malpractice cases. We will continue following Simington’s case to see how the outcome will set precedence for future cases.

Regardless of the type of medical malpractice case you are dealing with, our expert lawyers are here to help. We invite you to contact us at your earliest convenience to book a consultation. We’ll evaluate your case and provide personalized recommendations to help you achieve the best possible outcome.