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State Government Responsible for Medical Malpractice Troubles in New York, New Report Shows

Nov. 29, 2007

State Government Responsible for Medical Malpractice Troubles in New York, New Report Shows

Patient Safety Must Be Improved, Public Interest Groups Say

ALBANY, N.Y. – Shortsighted policy decisions by New York’s government in the 1990s are responsible for the purported medical malpractice “crisis” in the state, a report released today by Public Citizen, New York Public Interest Research Group (NYPIRG) and the Center for Medical Consumers concludes.

The report urges Gov. Eliot Spitzer and a task force studying malpractice to focus on ways to improve patient safety and to resist pleas from the insurance industry and the state’s doctors to pare back patients’ legal rights. It has been sent to Spitzer, the task force and New York state lawmakers. The report,   A Self-Inflicted “Crisis:” New York’s Medical Malpractice Insurance Troubles Caused By Flawed State Rate Setting and Raid on Rainy Day Fund, was written by Public Citizen researchers. NYPIRG and the Center for Medical Consumers assisted.

The 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 have caused a doctor shortage in New York are patently false, Public Citizen researchers determined. The state’s population of doctors – and of most types of specialists – is the highest it has been in at least a decade.

The current year’s medical malpractice rate hike was necessitated by the need to play catch-up from an eight-year span starting in the mid-1995 in which the state held rates stagnant. It also was caused by the need to make up for the state taking nearly $700 million in the 1990s from the rainy day fund of the program that covers high-risk doctors.

A tiny percentage of doctors is 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 they and other losses 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 largely responsible for the insurance companies’ current financial problems, the report finds.

“It is unconscionable that such a small number of doctors could be allowed to make so many mistakes that they could throw an entire state’s insurance system into crisis,” said Public Citizen President Joan Claybrook. “New York needs to take a hard look at whether these doctors should be allowed to continue practicing, and it needs to put dangerous doctors out of business.”

Added Russ Haven, legislative counsel for NYPIRG, “The roots of any so-called crisis were planted by the state when it raided the insurance fund in the 1990s and then magnified the problem by refusing to grant increases to even keep up with inflation. There’s simply no evidence to support the fear-mongering by the medical and insurance lobbies that doctors are being driven from New York by an out-of-control victim compensation system.”

Poor patient safety and negligent oversight of bad doctors are dire problems in New York, researchers found. The state suffers from a chronic recurrence of inexcusable errors, such as surgeries on the wrong limb, surgeries on the wrong patient and leaving foreign materials in patients. More than 550 deaths per year have been logged in the state’s adverse incident reporting system, which itself is notoriously incomplete.

In August, New York’s comptroller lambasted the Department of Health’s Office of Professional Medical Conduct (OMPC) for failing to live up to its most basic requirements for monitoring physicians. The agency was unaware that doctors under its watch had been suspended by Medicare or Medicaid. In addition, the agency had failed to investigate doctors whose malpractice payments should have triggered investigation based on the agency’s policies, and it often took more than a year to complete investigations.

The agency’s lax oversight was illustrated earlier this month by revelations that health officials delayed notifying more than 600 people that they potentially had been exposed to deadly diseases by a single physician improperly reusing syringes. Astonishingly, the state regards its investigation into the physician as a “non-disciplinary” disciplinary matter. A review of the information publicly posted by the health department on the doctor’s track record provides no information to alert New Yorkers about this dangerous conduct. Less than a third of New York doctors who have made 10 or more medical malpractice payments have received any disciplinary action affecting their license to practice.

Predictably, critics of the legal system have attempted to use complaints about recent rate increases to stir up support for rolling back patients’ legal rights. The most offensive proposal is one to deprive newborns of their legal rights and leave their care to the whims of a state-run fund. This radical proposal is neither warranted nor sensible. The report shows that such cases are responsible for only a fraction of overall medical malpractice costs, debunking the perception that a state-run system could significantly reduce overall medical malpractice costs. Meanwhile, such experiments have failed in the two states that have tried them.

“Cashing in patients’ legal rights for a state-run fund has proven to be a bankrupt idea,” said Art Levin, director of the Center for Medical Consumers. “We know from the experience in Virginia and Florida that these programs are unjust and, inevitably, fail.”

The report makes several recommendations:

  • In a manner consistent with other health priorities, New York should restore the $691 million that was removed from the high-risk doctors’ insurance pool in the 1990s. Returning this money would likely cure the current so-called crisis.
  • The state should consider setting an annual inflation-based minimum level for malpractice insurance increases. This would protect against the boom-bust cycle that afflicts the insurance industry.
  • The state should appoint a task force to recommend dramatic, aggressive steps to improving patient safety.
  • The state should confirm that doctors unable to obtain commercial insurance are suited to continue practicing medicine. Additionally, the state should provide the administrator of the insurance program for high-risk doctors with unrestricted authority to inform the state’s licensing board about suspect doctors with the expectation of a written, public response.
  • The OPMC should follow the recommendations of the state’s comptroller to ensure that it lives up to current criteria for initiating investigations, that it become proactive in searching for cases that warrant investigation and that it conduct investigations more quickly.

Erin Howard, of Northport, N.Y., is suing Mt. Sinai Hospital over the loss of her brother Kevin Deane, who choked on his own blood while in the hospital earlier this year. She spoke at the press conference at which the report was released.

“Nothing will bring my brother back, and at this point our only hope is to seek answers, justice and accountability through our courts,” she said. “Any effort to curtail the rights of those who have been victimized by inexcusable medical errors would simply victimize them a second time.”

READ the report.

READ Joan Claybrook’s statement.

READ Erin Howard’s statement.