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    Personal Injury and Insurance Law Legal Research Blog

    PERSONAL INJURY LAW UPDATE: Medical Malpractice—Effect of Treatment Expense on Potential Liability

    Posted by Gale Burns on Tue, Jan 10, 2012 @ 10:01 AM

    January 17, 2012

    Fred Shackelford, Senior Attorney, National Legal Research Group

    As the cost of medical treatment in the United States continues to increase, health-care providers and patients must often weigh the costs and benefits of various treatment options in deciding what course of treatment to follow. Until recently, there was apparently little or no case law directly addressing the effect of treatment cost considerations on a health-care provider's potential liability for medical malpractice.

    However, in Murray v. UNMC Physicians, 282 Neb. 260, ___ N.W.2d ___, 2011 WL 4104935 (2011), the court addressed the novel issue of whether the standard of care in a medical malpractice action may be affected by the cost of treating a patient. In Murray, a patient had been suffering from pulmonary arterial hypertension, a chronic condition in which blood vessels in the lungs constrict, causing pressure on the heart that can cause heart failure. The condition can be treated by a vasodilator known as Flolan, but this treatment costs roughly $100,000 per year, and if this treatment is begun, it must generally be continued for the rest of the patient's life. If the treatment is discontinued, pulmonary blood pressure rebounds and can be life-threatening. In Murray, the treating hospital's practice was to wait for the patient's insurance company to approve the treatment before beginning it, as most patients cannot afford the drug and it is more dangerous if treatment is started and then stopped. Unfortunately, Mrs. Murray died before the Flolan treatment was begun, and a medical malpractice complaint asserted that treatment should have been started before obtaining insurance approval.

    At trial, the defendant hospital presented witnesses who testified that the standard of care required finding some source of payment for the Flolan treatment but that if insurance was unavailable, it was usually possible to find some other payment on a "compassionate need basis" within the 12-week period that was purportedly appropriate for treating the condition.  The jury returned a general verdict for the hospital, but the trial court granted a motion for new trial, concluding that "a medical standard of care cannot be tied to or controlled by an insurance company or the need for payment." 2011 WL 4104935, at *3. The trial court added:

    The "bean counters" in an insurance office are not physicians. Medicine cannot reach the point where an insurance company determines the medical standard of care for the treatment of a patient. Nor, can we live in a society where the medical care required is not controlled by the physicians treating the patient. The position advanced by [UNMC's] expert tells us that the standard of care is different for those with money than for those without. This is neither moral nor just. It is wrong.


    On appeal, the Murray court noted that the issue of whether a medical standard of care can appropriately be premised on cost considerations was a matter of first impression in Nebraska. Furthermore, the "parties have not directed us to (nor are we aware of) any other authority speaking directly to that issue." Id. at *6. (However, the court noted that a number of commentators have addressed the issue in various legal publications.) The court observed that, in general, identification of the standard of care is a question of law, while the issue of whether a party breached the standard and was negligent is an issue of fact. Id. "Malpractice," the court reiterated, is defined as a "failure to use the ordinary and reasonable care, skill, and knowledge ordinarily possessed and used under like circumstances by members of [the] profession engaged in a similar practice." Id.

    The Murray court concluded that the trial court had erroneously granted a new trial, for three reasons. First, the trial court had misunderstood a defense expert's testimony to mean that treatment was required by the standard of care regardless of how it was to be paid for. Instead, the expert's basic opinion was that because of the risks associated with interruption of treatment, the standard of care requires a doctor to make sure that a payment source is in place before beginning Flolan treatment.

    Second, the standard of care is mandated by statute, and the defense witnesses testified that the hospital's policy was consistent with the statutory standard inasmuch as other health-care providers in the same or similar communities also deferred Flolan treatment until payment for a continuous supply had been secured.

    Finally, the Murray court decided that the trial court's concerns about health-care policy had been misplaced "in a situation in which the patient's ability to continue to pay for treatment [was] still a medical consideration." Id. at *7 (court's emphasis). The court found that there was no evidence that the decision to defer treatment had been based on the hospital's concern for its own financial interests. The hospital's "physicians were weighing the risk to Mary's health of delaying treatment against the risk to Mary's health of potentially interrupted treatment." Id. (court's emphasis). The court compared the defendants' medical decision in Mary's case to other situations in which treatment decisions might be based upon the patient's individual circumstances:

    As explained by Murphy, Thompson, and Johnson, the reason for waiting to begin Flolan until after insurance approval had been obtained was out of concern for the health of the patient. That was not meaningfully different from any number of other circumstances in which a health care provider might have to base a treatment decision upon the individual circumstances of a patient. For instance, a physician with concerns about a particular patient's ability to follow instructions, or report for appropriate followup care, might treat the patient's condition differently in the first instance. And a health care provider who is told that a patient cannot afford a particular treatment may recommend a less expensive but still effective treatment, reasoning that a treatment that is actually used is better than one that is not. These are difficult decisions, and there may be room to disagree, but it is hard to say they are unreasonable as a matter of law, or that an expert cannot testify that such considerations are consistent with the customary standard of care.


    The Murray court noted that the plaintiff's witnesses had been free to disagree with the defendants' experts as to whether the standard of care required more than those experts had said it did. Moreover, the evidence might have shown that in light of the patient's deteriorating condition, there was little risk in beginning Flolan treatment before securing a payment source. Id. at *8. Thus, the jury could have found that the standard of care required Flolan to have been administered immediately, but the trial court had erred in concluding that it should have directed a verdict on the standard of care. Id.

    The Murray court characterized its holding as being limited, stating that it was not deciding "whether the standard of care can or should incorporate considerations such as cost control or allocation of limited resources." Id. The court added:

    Although the decision (or lack thereof) of a third‑party payor contributed to the circumstances of this case, UNMC's decisions were still (according to its evidence) premised entirely upon the medical well‑being of its patient. In a perfect world, difficult medical decisions like the one at issue in this case would be unnecessary. But we do not live in a perfect world, and we cannot say as a matter of law that UNMC's decisions in this case violated the standard of care.


    The Murray decision may well be the first of many cases that will grapple with the issue of how cost considerations may affect the standard of care in medical malpractice cases. As health-care costs continue to rise and exert pressure on the resources of private and governmental insurance sources, it is likely that this issue will be addressed in many jurisdictions in the future.

    Topics: legal research, Fred Shackelford, medical malpractice, effect of treatment expense on potential liability, treatment options vs. trreatment costs, health-care provider's potential liability for, standard of care, medical well-being of patient, cannot be tied to insurance company's coverage, source of payment, personal injury

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