The NY Times recently released a piece detailing the precarious state of financially-pinched New York hospitals, who no longer carry malpractice insurance or only have partial coverage. NYS is not the only state to allow such an activity. Here, hospitals do not need to report the fact to either the government or to patients.
Many of these hospitals are in poor and particularly litigious neighborhoods. They believe it makes financial sense to gamble their malpractice liabilities, but other experts understandably disagree because even the best hospitals are not immune from malpractice claims. They say bankruptcy is dangerous for patients and to those who originally invested in the hospitals. Some hospitals, however, are also relying on the specter of bankruptcy, which they believe disincentivizes litigators from pursuing cases for what is potentially nothing.
The state Health Department determined in a 2009 survey that three local hospitals, all in Brooklyn, "self-insure" and now have no money left in reserves. These include Wyckoff Heights Medical Center, which has a $37 million liability hole, Interfaith Medical Center, which is paying a $12.9 million settlement in installments through 2018, and Kingsbrook Jewish Medical Center. Interfaith has already closed its obstetrics unit.
12 other local hospitals were determined to be partially-insured, including Manhattan's St. Vincent's Hospital, which closed in 2010 after bankruptcy. Others include Jamaica Hospital Medical Center in Queens and New York Hospital of Queens.
Going without insurance is usually a no-win scenario because it often means premiums are high thanks to already-high malpractice claims. Some more-stable hospitals have avoided such fates by merging into shared-risk pools.
Patients who think they may have been injured at a hospital that does not have malpractice insurance are in for a rude awakening.
They are often shocked to learn that there may be no way to obtain compensation for the injuries they have suffered. In cases where the hospital has declared bankruptcy because they are financially insolvent, try explaining to a severely injured patient why they may only receive pennies on the dollar as full justice for their injuries. The hospital gets away with having caused long-term injury or disability, and the patient obtains very little compensation, if any.
It is true that most of these hospitals who are having financial difficulty try to keep those matters close to the vest. That means that patients often have no idea that a hospital has no medical malpractice coverage, or does not have sufficient funds to cover a judgment or award if a lawsuit is brought and the patient is successful. That can have devastating consequences for an injured victim.
If you would like more information about how medical malpractice cases work in the state of New York, I encourage you to explore my educational website. If you have legal questions, I invite you to pick up the phone and call me at 516-487-8207 or by e-mail at [email protected] to answer your questions. That's what I do every day. I welcome your call.