Several of the most troubled hospitals in New York City are partially or completely uninsured for malpractice, a strategy that may make sense in the short term but is detrimental to patients, according to a New York Times report.
Malpractice insurance is not required in many states, New York being one of them. Hospitals are not required to inform patients when they are uninsured for malpractice, or "bare." Insurance experts say foregoing malpractice insurance may make sense in the short term for marginally capitalized hospitals trying to see another day.
From a social perspective, however, the strategy has been called irresponsible. It also raises questions about a hospital's viability. "They're taking in these people knowing they're not able to make good on the harm they cause," Tom Baker, JD, a professor at University of Pennsylvania Law School, said in the report. "Even a really good hospital is going to have a certain amount of medical malpractice. It's inevitable."
Hospitals without insurance generally set aside funds for malpractice claims instead of paying premiums, but a New York Times review found at least two hospitals had no money in their reserves for liabilities.
In the report, one unnamed hospital executive said a lack of malpractice insurance — which he called a "lawsuit magnet" — can mitigate claims. These hospitals often tell malpractice lawyers they will go bankrupt unless the plaintiff accepts a reduced settlement. Either way, whether the hospital claims it is nearing bankruptcy or is actually bankrupt, malpractice plaintiffs are often forced to accept less than they're owed through litigation.
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Malpractice insurance is not required in many states, New York being one of them. Hospitals are not required to inform patients when they are uninsured for malpractice, or "bare." Insurance experts say foregoing malpractice insurance may make sense in the short term for marginally capitalized hospitals trying to see another day.
From a social perspective, however, the strategy has been called irresponsible. It also raises questions about a hospital's viability. "They're taking in these people knowing they're not able to make good on the harm they cause," Tom Baker, JD, a professor at University of Pennsylvania Law School, said in the report. "Even a really good hospital is going to have a certain amount of medical malpractice. It's inevitable."
Hospitals without insurance generally set aside funds for malpractice claims instead of paying premiums, but a New York Times review found at least two hospitals had no money in their reserves for liabilities.
In the report, one unnamed hospital executive said a lack of malpractice insurance — which he called a "lawsuit magnet" — can mitigate claims. These hospitals often tell malpractice lawyers they will go bankrupt unless the plaintiff accepts a reduced settlement. Either way, whether the hospital claims it is nearing bankruptcy or is actually bankrupt, malpractice plaintiffs are often forced to accept less than they're owed through litigation.
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