FHP, Hit Hard, Increasing Malpractice Reserves
FHP International Corp. on Wednesday said it is increasing its reserves for paying medical malpractice claims several days after a Los Angeles County Superior Court jury found the company guilty of negligence in the premature birth of a baby boy and ordered it to pay nearly $10 million in damages.
The Fountain Valley HMO said Wednesday that it intends to request a new trial and a reduction of damages, and to appeal if its requests are not granted.
The award was the largest malpractice judgment ever against the company.
In an 11-1 vote, a Superior Court jury in Torrance last Friday decided in favor of Sandra Harris’ claim that FHP’s negligence led to the premature birth of her son, Jonathan, at a hospital in Westminster in 1983.
Jonathan Harris, now 6 years old, is mildly mentally retarded, unable to walk and has only limited ability to control his arms, said Bruce Brusavich, an attorney for Sandra Harris.
The verdict comes in the wake of an admission by FHP in July that a 74-year-old Garden Grove woman suffering from advanced breast cancer died last November at the company’s hospital in Fountain Valley after a nurse grabbed the wrong medication from a shelf and mistakenly administered a lethal dose of it.
Sandra Harris was a clerical employee at FHP headquarters in Fountain Valley when she began to receive prenatal care at an FHP clinic in Long Beach. Harris’ attorney argued that the clinic initially misdiagnosed the start of her pregnancy and that after the error was discovered by ultrasound tests, the clinic’s staff didn’t correct the records.
On Christmas, 1983, Sandra Harris began to experience pregnancy-related symptoms and went to Humana Hospital in Westminster, an FHP contract hospital where she was treated by an FHP doctor. In her lawsuit, she contended that the doctor used artificial means to induce labor that led to Jonathan’s premature birth and brain hemorrhaging. She also said the physician was negligent in not checking the results of prenatal tests at the clinic.
FHP, however, contends that Harris’ water broke before she arrived at the hospital and that the FHP doctor behaved properly in deciding to immediately deliver the baby without first checking clinical records.
The company said it had evidence from ultrasound scans that the brain hemorrhaging in the baby occurred before he was born and had nothing to do with the timing or method of his delivery.
Joe Hilberman, FHP’s attorney, said Wednesday that the company believes the damage award is excessive and “far in excess of the child’s lifetime needs.”
The jury awarded a total of $9.86 million, including $436,000 for emotional and physical distress sustained by the mother and child, $8.25 million for future medical expenses and $1.175 million for impairment of the boy’s earning potential.
As a result of the award, FHP said it will increase its reserves for malpractice claims for the period from 1975-83, when the company was self-insured.
The company has not yet determined how much will be put in the reserves, said FHP spokeswoman Ria Carlson.
The company said the additional funding will reduce the company’s earnings in its fourth quarter and fiscal year ended June 30.
FHP’s stock, traded over the counter, closed Wednesday at $16.125 a share, down 87.5 cents.
