In 1995, Willie King went through every hospital patient's worst nightmare... King was 51 years old. He had moved to Tampa, Florida after retiring from his career as a heavy machine operator.
They Cut Off the Wrong Leg
By Marc Chaikin, founder, Chaikin Analytics
In 1995, Willie King went through every hospital patient's worst nightmare...
King was 51 years old. He had moved to Tampa, Florida after retiring from his career as a heavy machine operator. He couldn't work any longer due to heart problems and diabetes.
Still, he was living a happy life. He had three adult children and eight grandchildren.
King's health issues initially didn't stop him from doing his favorite things, like fishing and visiting family. As he explained...
I guess I was always an independent fellow, and I liked to be by myself, keep my own place, and I just did the things I wanted to do. If I wanted to go to the store, I could do that, but now these things have changed.
You see, King's right foot eventually became gangrenous. It was an unfortunate complication of his diabetes.
Doctors told him that his right leg needed to be amputated below the knee.
King went to University Community Hospital ("UCH") nearby. There, the staff prepared him for surgery. They placed him under anesthesia.
When he woke up, he noticed something was wrong. As he said...
When I came to and discovered I lost my good [leg], it was a shock, a real shock... I told him, "Doctor, that's the wrong leg."
The surgeon had removed King's left leg instead of the right one.
At some point, the wrong leg was listed on some paperwork. No one caught the mistake.
The hospital computer had showed that King's left foot – the wrong one – needed to be removed. So did the operating room schedule and blackboard.
King had the correct leg amputated at a different hospital a few days later.
The story soon hit the local news. The hospital released a statement to try to quell the scandal. In it, hospital president Norm Stein said...
Simply put, this event took place because of human error... We apologize to Mr. King.
Unfortunately, it wasn't the only mistake at UCH around that time. And it didn't take long for King's story – along with others – to become national news.
UCH barely survived the backlash.
The Joint Commission on Accreditation of Healthcare Organizations (now known as just the Joint Commission) temporarily suspended its accreditation status. This prevented UCH from collecting money from Medicare and Medicaid.
Ironically, local malpractice lawyers defended the hospital. They said UCH's track record of patient care wasn't much different from other hospitals.
Keep in mind that these lawyers are always watching hospitals. Any little mistake is a potential opportunity for a lawsuit.
And despite years of improvements in patient care, medical mistakes keep happening.
Researchers at Johns Hopkins have estimated that about 250,000 patients die every year in the U.S. due to medical errors. In other words, medical mistakes aren't recorded as an official cause of death – but if they were, they would be the No. 3 killer in America (after heart disease and cancer).
Of course, health care is no different than other fields – mistakes happen.
But these errors are tragic for patients. They're also costly for doctors and medical facilities. And that's a big deal for insurance companies...
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Malpractice Insurance Is Critical
You see, every company in America is terrified of "nuclear verdicts."
That's the term for when a jury awards more than $10 million to a plaintiff in a lawsuit.
As you can imagine, $10 million is a huge expense for any business.
More importantly, nuclear-verdict payouts have been on the rise...
In 2023, nuclear-verdict payouts hit roughly $14.5 billion in the U.S. That's the highest level in 15 years.
Medical malpractice accounted for almost a quarter of those cases for most of that span. There were 57 medical-malpractice nuclear verdicts in 2023 – the highest number in more than a decade. The biggest was a $261 million verdict against Johns Hopkins All Children's Hospital in St. Petersburg, Florida.
Last year, the number of medical malpractice nuclear verdicts fell slightly to around 50. But the average verdict hit $56 million – more than double the average from five years ago.
These big payouts can destroy a small or medium-sized business. And they're an example of why malpractice insurance is so important.
On the surface, insurance seems like a boring industry. But as you've seen today, many of the stories behind it are fascinating... and they help underscore why insurance is so important.
The Power Gauge Sees Opportunity in Insurance Stocks
So it's no wonder why the Power Gauge regularly spots opportunities in this space. And today, our system says the insurance industry is "strong."
More specifically, 51 stocks in the industry currently earn a "bullish" or "very bullish" rating. And only six earn a "bearish" or worse rating.
Put simply, the Power Gauge sees opportunity in the insurance industry right now.
If this is a corner of the market that you normally skip over, I recommend giving it a serious look.
Good investing,
Marc Chaikin
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+0.35%
11
14
5
S&P 500
+0.11%
134
271
94
Nasdaq
+0.1%
31
59
10
Small Caps
-0.42%
469
950
467
Bonds
-0.29%
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks have turned somewhat Bullish. Major indexes are mixed.
* * * *
Sector Tracker
Sector movement over the last 5 days
Utilities
+3.47%
Information Technology
+3.01%
Industrials
+2.83%
Communication
+2.7%
Consumer Discretionary
+2.21%
Consumer Staples
+1.58%
Financial
+1.47%
Real Estate
+1.08%
Materials
+0.87%
Energy
-0.25%
Health Care
-1.17%
* * * *
Industry Focus
Pharmaceuticals Services
4
28
10
Over the past 6 months, the Pharmaceuticals subsector (XPH) has underperformed the S&P 500 by -10.50%. Its Power Bar ratio, which measures future potential, is Weak, with more Bearish than Bullish stocks. It is currently ranked #16 of 21 subsectors and has moved up 2 slots over the past week.
Indicative Stocks
AXSM
Axsome Therapeutics,
EYPT
EyePoint Pharmaceuti
HROW
Harrow, Inc.
* * * *
Top Movers
Gainers
UNH
+8.21%
MRNA
+6.15%
DG
+4.95%
GEV
+4.33%
HUM
+3.94%
Losers
FSLR
-7.59%
AES
-4.1%
CZR
-3.68%
ENPH
-3.21%
BBY
-2.98%
* * * *
Earnings Report
Earnings Surprises
AGYS Agilysys, Inc.
Q4
$0.54
Beat by $0.25
* * * *
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