Some Hospitals in New York Lack a Malpractice Safety Net
Every hospital makes mistakes. But some New York City hospitals may not have enough money to pay for them.
Several of the city’s most troubled hospitals are partially or completely uninsured for malpractice, state records show, forgoing what is considered a standard safeguard across the country.
Some have saved money to cover their liabilities, but others have used up their malpractice reserves, meaning that any future awards or settlements could come at the expense of patients’ care, and one hospital has closed its obstetric practice, in part out of fear of lawsuits.
Executives of these hospitals, most of which are in poor neighborhoods, say their dire financial circumstances and high premiums make it impractical to pay millions of dollars a year for insurance.
But insurance experts say that though dropping coverage may make economic sense in the short term, it is hardly in the best interest of patients, and in the long term it may be costly to hospitals and their bondholders, including some bonds backed by the state, should large judgments force them into bankruptcy.
“From a kind of self-interest of the hospital, it seems if you’re a marginally capitalized hospital barely making it, it would be perfectly rational not to buy insurance,” said Tom Baker, a law professor at the University of Pennsylvania who has written about malpractice insurance.
“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 they caused. Even a really good hospital is going to have a certain amount of medical malpractice. It’s inevitable.”
