Johns Hopkins hospital's potential financial fallout from $261M Netflix case verdict

Attorneys for St. Petersburg, Fla.-based Johns Hopkins All Children's Hospital said they plan to appeal the verdict that requires the hospital to pay $261 million in damages to the family of 17-year-old Maya Kowalski, whose case was made famous by a Netflix documentary, the Tampa Bay Times reported Nov. 13. The appeal is likely to delay payments until next year, but if unsuccessful, the hospital could face significant headwinds. 

The jury ruled that the hospital must pay $211 million to the family in the medical malpractice lawsuit and after further deliberations awarded an additional $50 million in damages on false imprisonment and battery counts. 

The $261 million in damages represents close to half of the $592 million in revenues the hospital reported in 2021, according to the report. 

The hospital's CFO Sherron Rogers testified during the trial that they could be forced to tap into cash reserves, possibly affecting future credit ratings and delaying future expansion projects, according to the report.   

Insurance will likely cover some of the $211 million awarded in compensatory damages, but Florida law prohibits insurance from covering the $50 million awarded in punitive damages, according to the report. 

Robert Bonar, DHA, a professor and program director of the Master of Health Care Administration at Washington, D.C.-based George Washington University, told the news outlet that even with the help of insurance, there are other financial implications down the road. A large claim made on liability policies will likely lead to the hospital paying more for future insurance, for example. 

"Large claims like this will frequently impact the organization across the whole spectrum," he told the news outlet. "It will lead to increases in self insured retentions, increased insurance premiums."

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