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Jan 15

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Sometimes it’s the reputation, not the money

When a nursing home faces alleged medical malpractice, it may often be the case that the individual lawsuit is not the biggest economic problem it faces.  The Rainbow Beach Nursing Center in Chicago is currently defending itself against a wrongful death lawsuit.   Two doctors caring for Sonia Eli at the nursing home each filled out prescriptions for her resulting in an alleged lethal overdose of the prescription medication.   Sonia’s family sued the nursing home last week for medical malpractice and negligence.

Assuming the case meets its liability burden of proof that the care provided to Sonia was below the standard of care that an average doctor would have provided, any economic damages will likely be small.  Generally, in medical malpractice cases, economic damages are based on (among other things) the injured party’s or decedent’s expected lifetime earnings.   Being in a nursing home, Sonia was undoubtedly past her expected worklife, and likely had a short remaining life expectancy.  Knowing that the damages (at least the economic damages) may be relatively small, Defendant(s) may be more worried about the impact on their reputation than any direct monetary damage of the lawsuit.  Should medical malpractice be determined, lost future earning associated with reduced future business from other current and potential clients will likely have a larger economic impact on  the company.

Additional information regarding calculating personal injury and medical malpractice damages can be found here.

About the author

Nicole Liska

I am a Principal at Fulcrum Inquiry, an accounting and economic consulting firm that performs damage analysis for commercial litigation, forensic accountings, financial investigations, and business valuations. I hold an ABD and MA in economics from the University of California, San Diego. I perform damages analyses and serve as a damages expert witness. My resume is on Fulcrum's website.

Permanent link to this article: http://betweenthenumbers.net/2013/01/sometimes-its-the-reputation-not-the-money/

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