Why Johns Hopkins Overpaid by at Least $150 Million in OB-GYN Class Action

Mostly I post here from the perspective of a crisis communications expert but this time I’m wearing a different hat. In addition to advising on strategic communications and PR I’m the VP of Research and Strategy for Jury Insight, where we apply the techniques of political message testing and market research to extremely high-stakes litigation. The short version of what we do is that we break complex legal cases down into their most basic pieces and then test those pieces in a focus group process designed to mimic a greatly accelerated jury deliberation process. It’s really fun to do and results in highly predictive findings, which is why Fortune 500 companies and elite university systems pay us. For what it’s worth, Johns Hopkins is not a client. 

Johns Hopkins

When I read that John’s Hopkins had just settled a class action lawsuit for $190 million dollars I was flabbergasted. The facts of the case are fairly cut and dried and uncontested. Dr. Nikita Levy was an OB-GYN with a 25 year career at the hospital. Over the course of that career he examined at least 8,500 patients. In February of last year, a colleague told hospital supervisors that Dr. Levy was wearing a tiny spy camera disguised as a pen during exams. The university investigated and it turned out this was true. A search of the doctor’s home turned up 10 hard drives with more than 1,200 video clips of close-up gynecological exams. The cops got involved with a criminal investigation and two weeks later the doctor committed suicide.

Okay, that’s bad. This kind of thing is a PR nightmare for a hospital and a university. There’s no way around that. A doctor, the most intimate kind, betrayed the trust of his patients by covertly taking pictures of their private parts. And the hospital somehow didn’t catch on for decades. A black eye on the reputation of the institution, for sure.

But on the other hand, you’ve got to put it in the context of medical malpractice lawsuits, which big hospitals face every week. Here’s a case where nobody died because of a doctors’ error. Nobody was injured. He didn’t fail to diagnose a critical condition. The doctor didn’t have sex with his patients. The doctor didn’t share his cache of images with anyone. He didn’t perform pelvic exams on unconscious surgical patients without their knowledge, something that is apparently routine at teaching hospitals.

In our work at Jury Insight we routinely observe our focus groups as they review and consider both blame and damages in extremely difficult and complex medical malpractice cases. And what I see is that jurors are, in fact, capable of making well-reasoned decisions about damages even in cases where they are morally outraged. We researched a case for a prestigious university where its chief fertility expert was found guilty of mishandling, misappropriating, and, in fact, stealing eggs and fertilized embryos. Dozens of people had received embryos from other people and had babies. Other people learned that their excess eggs and embryos from fertility treatments had been used with other parents, and that they potentially have biological children somewhere out in the world that they don’t know about. It’s hard to imagine a worse scenario, short of anyone actually dying. What a huge personal and ethical violation.

You’d think this would be something that would settle for hundreds of millions of dollars, right? And that any university that would take a case like this to trial would be destroyed. 

Fact is that our juries were less than impressed by the damages in the fertility clinic case. Sure, they were outraged at the ethical breaches. But they were pretty practical about other things in ways you wouldn’t expect. They didn’t feel that an infertile couple who came to a clinic seeking a donor embryo and ended up with a healthy baby had much claim, in the end, just because it was the “wrong” embryo. They didn’t feel that people who were perfectly okay flushing unused eggs or fertilized embryos down the drain were somehow entitled to millions in damages because instead of going down the drain those embryos or eggs were implanted in someone else and became a kid. 

In the end, the case, involving 50 different plaintiffs, was settled for less than $15 million. It was settled so low because the university in question was willing to go to trial rather than to settle for hundreds of millions of dollars. They were willing to go to trial because the research had showed that they would probably win at trial and even if they lost, the resulting damages would nowhere near the amounts being demanded. They trusted the research and their confidence enabled them to settle the case at a reasonable level. When a defendant walks into settlement talks armed up with real-world facts about what will happen at trial it makes the whole thing a lot less speculative and scary. 

We’ll never know, but I believe that if the Johns Hopkins case had been properly focus grouped the hospital would have learned that potential jurors believe:

  • Even though Dr. Levy violated the trust of thousands of patients, the actual damage to most of those patients is ZERO. 
  • Jurors often want to “send a message” to the doctor by giving big damages. Dr. Levy is dead. You can’t send him a message via a judgement. 
  • This isn’t a case with institutional culpability. Johns Hopkins investigated immediately and suspended him immediately upon learning of the behavior. Jurors like to send a message to hospitals when there’s a big breakdown in protocols or management oversight. I don’t think anyone would expect a hospital to see this coming. 
  • To the degree that there are patients who can show actual medical costs for things like counseling or other therapy related to the violation of their trust, we’re talking about amounts in the thousands, not millions. 

The university might believe that by settling this case at such cost they’re putting it behind them. But the fact is that they’ve paid a historic amount and set a marker for their willingness to pay extortionate amounts based on feelings of shame and guilt, rather than quantified damages. That’s a dangerous and expensive precedent for any university or hospital to set. 

 

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