November 29, 2007
Governor Eliot Spitzer
Dear Governor Spitzer,
In a report issued today, we hope to provide some factual insights for the task force you established on medical malpractice insurance rates in New York. The report analyzes the medical malpractice insurance problems in the state and provides a road map to solve them.
There has been much hand wringing and hyperbole about the costs of medical malpractice in New York, but the discussion has almost entirely ignored the most important costs of all: those borne by the victims. Large medical malpractice payments invariably compensate for horrific outcomes – including death, brain damage or disfigurement – that none of us would trade for any amount of money if we could have prevented them. Reducing needless medical errors should be the task force’s top priority.
According to the Public Citizen report we are releasing today - A Self-Inflicted “Crisis:” New York's Medical Malpractice Troubles Caused by Flawed State Rate Setting and Raid on Rainy Day Fund - the facts underlying New York’s situation are clear. The current problems were caused by several factors: first, the previous administration’s raid on the rainy day fund of a state insurance program; second, the state’s inept regulation of medical malpractice insurance rates; and third, the state’s continued failure to discipline dangerous doctors adequately.
There are simple, practical measures that can be taken to fix the system without eviscerating citizens’ legal rights in a knee-jerk response to insurance companies’ and doctors’ exaggerated claims of “crises.” The state should, consistent with other health priorities, replace the money that it expropriated from the rainy day fund and institute a system to guard insurance regulation against political whims. But most importantly, the government should overhaul its doctor supervision system. Far too many people are dying or suffering permanent injuries because the state has not fulfilled its responsibility to ensure patients are treated safely.
Instead of focusing on patient safety and care, critics of the legal system predictably are attempting to use complaints about recent rate increases to stir up support for rolling back patients’ legal rights. The enclosed report debunks claims that a recent 14 percent hike in medical malpractice rates was caused by an increase in litigation. In fact, there have been fewer medical malpractice payments in the past five years than in any five-year period on record, according to data maintained by the federal National Practitioner Data Bank. Amounts paid out, when adjusted for inflation and population, have either risen slightly in the past five years or declined slightly, depending on the measure used.
Claims that increased rates are causing a physician shortage in New York also are patently false. New York’s population of doctors – and of most types of specialists – is the highest it has been in at least a decade.
A tiny percentage of doctors are responsible for the overwhelming share of New York’s medical malpractice payments, various data indicate. For example, only about 1 percent of New York’s doctors are enrolled in the state’s program for physicians deemed too risky by commercial insurance providers. Yet these doctors’ payments have been so massive that, among other causes, they have drowned the program in more than $500 million in red ink this decade. These losses, which state law requires commercial malpractice insurers to absorb on a shared basis, are primarily responsible for insurance companies’ alleged financial problems.
With so many myths swarming around the issue – and so many lives at stake – we strongly urge you to seriously consider the report’s findings and incorporate our recommendations in your policy. Please do not allow patient safety to be hijacked by exaggerated and misdirected claims of a medical malpractice crisis. As always, we welcome an opportunity to assist you in restoring New York’s role in protecting patients and preserving access to the civil justice system.