The $50,000 surcharge
The medical malpractice liability pool (MMLP) was established in NY in the late 90's after NYS dissolved the MMIA . The fund was established to cover uninsurable physicians in NYS. State law mandates that the pool be solvent. Solvency is not a word typically utilized to describe the insurers NYS has been left with to cover physicians for medical malpractice. Only one of three companies can be described as solvent. The MMLP used to be solvent. As a matter of fact there used to be a 600 Million dollar surplus which the NYS government raided in a budget balancing maneuver in during the Pataki administration.
Now the fund is over 1 Billion dollars in the red....and as state law mandates, it is up to the physicians of NYS to remedy that. At the direction of the Superintendent of Insurance, Eric Dinallo. Mr Dinallo recently allowed insurers to increase our premiums 14%...and more recently has told the physicians of NYS that we will all be subject to a $50,000 surcharge, in order to zero out the MMLP.
At a Crain's business address, Mr Dinallo describes some of the issues at hand.
I can't believe I am saying this... but there are good arguments on both sides of the medical malpractice divide...some physicians obviously believe that lawyers are simply out to make a buck on the back of all the docs in the state. Other docs realize that there are truly injured patients that need to be compensated for their loss. Many docs realize the cold hard facts that 4% of physicians in NYS are responsible for nearly 50% of malpractice payouts.
Many (slip and fall) bottom dwelling lawyers probably look at any case as a means of making a few quick bucks; while a few good PI attorneys truly believe (and probably are) helping those in need. The problem is that the system in NYS is nearly insolvent, and it can not and should not be made solvent on the backs of docs without somehow giving us hope that the system will be changed to address the very issues that have brought us to this point. Otherwise the viscous cycle will continue and the pool will be insolvent once again in a few years. But in those few years many, many docs will have left NYS, many residents would have chosen not to practice in NYS and many docs will simply retire or find new means of generating an income. You can bet we will continue to find the lawyers clamoring for increases in fees and docs will still be screaming for some form of tort reform. We will simply keep circling the drain.
Who is going to come to rescue the system...? Spitzer... not anymore; Sheldon Silver...yeah right... he is employed by one of the largest med mal firms in NYS. Bruno...maybe; Patterson, I'm not sure where he stands.
The bottom line is that many many docs will not be able to pay the 50K surcharge, the projected 18% rise in med mal premiums next year and remain solvent themselves. Something needs to be done.
I'll leave suggestions for another time.
Howard J Luks, MD
2 Comments
2 References
References (2)
-
-
Response: $50,000 malpractice surchargeHoward Luks on NY's malpractice situation.
Reader Comments (2)
Ummm, wow!
I feel like I have dodged a bullet here considering that less than a year ago I was actually talking with several hospitals in New York and considering relocating there to practice.
The malpractice climate was certainly one factor that played a part in my decision to not come practice there.
Reading this, I now realize that this was most definately the right decision.
Throw a 50k surchage on physicians and then raise their rates 18%, eh?
I predict an exodus.
Many docs realize the cold hard facts that 4% of physicians in NYS are responsible for nearly 50% of malpractice payouts.
When you have a situation in which most(~80%) of malpractice suits filed result in no payment, and of the 20% which result in payment, most are for relatively small amounts and a few are multimillion jackpots, it is a statistical certainty that a low percentage of docs will be responsible for a large percentage of the total.
That's why caps work. Physicians don't have to worry about losing the jackpot cases. They are rare, but rare events are the reason that we buy insurance. When the lure of the rare but extremely lucrative jackpot award is removed, lawyers tend to file fewer suits. This lowers the cost of insurance (the 80% of suits that close without payment are still expensive and stressful to defend), and makes it less risky to practice medicine.
States with malpractice caps have lower premiums, and more physicians. Texas put a cap into place several years ago and the Medical Board can't keep up with the demand for new licenses. Is there any indication that states with caps (Texas, Indiana, California) have an overall lower quality of care than New York does?