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Malpractice Madness Drives NYC Hospitals to the Brink

The Supreme Court has spoken: the controversial Obamacare bill does not, at least in its most important parts, violate the Constitution. Yet as Chief Justice Roberts alluded in his deciding opinion, the fact that the law is constitutional does not make it a smart solution to America’s healthcare problems.

In fact, Obamacare doesn’t even do anything to fix one of the most tangled issues: the ballooning cost of malpractice lawsuits and malpratice insurance. Indeed, malpractice is now one of the biggest single expenses hospitals face, with single cases often resulting in payouts in the tens of millions of dollars. Hospitals need to keep hundreds of millions of dollars in reserve for such suits, money that would be better spent on doctors, nurses, or new technology.

Indeed many hospitals have now been forced to go without malpractice insurance altogether, putting them at serious financial risk. The New York Times reports that three hospitals in the city are now completely without insurance, and many more are partially uninsured, with little cash in reserve to deal with lawsuits. One hospital has been forced to close its obstetrics practice due to liability concerns. Others are just one major lawsuit away from having to do the same thing. Worse still, a number of these hospitals under legal siege are located in the poorest parts of the city.

Obamacare was supposed to improve access to healthcare for the nation’s poorest. Failing to deal with high malpractice costs appears to be having the opposite effect:

Many states do not require malpractice insurance, and New York is not the only city where hospitals go without coverage. Generally the uninsured hospitals are in areas where juries award big judgments, insurance executives say.

“In New York and in poor venues, difficult venues — Philadelphia is one, New York City, Chicago Cook County, Florida Dade County — it’s not effective for the hospitals to buy the coverage because they charge so much,” said Dominic A. Colaizzo, chairman of the national health care practice for Aon, an insurance brokerage.

Somehow, the Congress and President Obama, in their sweeping overhaul of the entire healthcare system, forgot to address the problem of ballooning malpractice costs. We are sure this small oversight had nothing to do with the huge donations trial lawyers make to Democratic politicians.

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  • Jim.

    Addressing this problem needs to be the first order of business for the GOP once ObamaCare is REPEALED.

  • Kris

    We obviously need a malpractice insurance mandate.

  • silence is golden

    We can all moan about the imperfections of the bill but it is still something vs the Republicans who want to replace it with nothing…

  • John

    You really think they simply ‘forgot’? Please…

  • Kris

    “silence is golden”: You’ve got that right.

  • Jim.

    @Silence is golden:

    You need to pay closer attention. Republicans had a whole suite of proposals, ranging from equalizing tax deductibility status of insurance premiums for the self-employed, to allowing insurance companies to operate across state lines to increase competition, to posting “sticker prices” on medical products ad services to allow more intelligent consumer choices, to increasing the number of medical school and residency slots available to increase the supply of doctors.

    Replace it with nothing? Hardly.

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