The basic idea behind medical malpractice is straightforward: when a hospital or doctor injures a patient – administers the wrong medication, malpractices a child and causes brain damage, commits surgical malpractice, or fails to diagnose cancer – the defendant is required to pay for the consequences of their medical errors. This is important because it keeps them honest. By requiring hospitals to take responsibility for medical malpractice, it provides and incentive for them to change negligent patterns so that they don’t injure or kill other patients in the future. And of course, that is where medical malpractice insurance comes in. Just as all drivers are required to buy auto insurance to pay for potential harm to others by driving errors, hospitals should be required to buy medical malpractice insurance to pay for the harm caused by medical malpractice. But in the State of New York, they are not.
As a result, some hospitals are now choosing to simply stop renewing their medical malpractice insurance coverage. While industry insiders and insurance providers try to frame this as a heroic decision by facilities that are under assault, New York City medical malpractice attorneys see this for what it is: yet another reckless corporate choice that throws patient safety under the bus in the name of increasing corporate profits.
As a New York Times article noted this week, several hospitals in New York are now either uninsured or drastically underinsured when it comes to medical malpractice litigation.
The article points about that insurance industry executives and hospital CEOs are claiming that they are in such a dire financial situation because of the high cost of medical malpractice litigation, that they are being forced to choose “nurses over insurance.” While that makes a nice story, it has no connection to reality. Instead, it has been shown that their choices to forego paying medical malpractice insurance premiums are the sole result of egregious, if not completely corrupt, corporate financial mismanagement.
For an example, take a look at this NYT story from earlier this year about the kind of blatant executive misconduct that is occurring at New York’s Wyckoff Medical Center. Wyckoff is one of New York’s local “not-for-profit” hospitals that has chosen to stop paying for medical malpractice insurance coverage because of its purported financial problems stemming from medical malpractice litigation. Yet, Wyckoff’s CEO is somehow to justify a “$160,000 Bentley” for his personal use. But wait, there’s more. He was also using the hospital pay for the “insurance on the car”. Then, when an accident sidelined the car, the executive made the hospital’s security guards chauffeur him and his family around to do errands. The ultimate insult is at the same time he made his choice to use hospital money to pay for the insurance on his bentley, he was deciding to not pay for medical malpractice insurance to cover the hospital against claims by injured patients. All of this is occurring on top of a multitude of other insider deals that Wyckoff’s executives have engaged in.
When the legitimacy of the hospital’s claim about being “self-insured” was investigated, it was discovered that they have absolutely “no money” set aside for medical malpractice payments. This is outrageously reckless conduct since setting aside money to pay malpractice claims is the minimal requirement of being able to say an entity is “self-insured”. A Times survey of a few other facilities found the same result – zero reserves to pay for medical errors.
Professor Tom Baker, an author on malpractice insurance issues noted that, “From a social perspective, it’s very irresponsible. They’re taking in these people knowing they’re not able to make good on the harm caused. Even a really good hospital is going to have a certain amount of medical malpractice. It’s inevitable.”
As a New York City medical malpractice attorney, it is clear to me that this is yet another sign of irresponsible corporate management that will ultimately be blamed on trial lawyers and the patients themselves. The game is up and it’s time to expose these corporations for what they really are. Medical malpractice insurance coverage must be a mandatory requirement in order to protect patients who are injured by medical malpractice. If these hospitals and doctors are not required to be accountable for the harm they cause, it will only further compromise patient safety and result in more patient deaths from medical malpractice.