Some New York City hospitals are foregoing medical malpractice insurance, either partially or completely. However all hospitals make mistakes at some point, but without insurance as a safeguard, these hospitals may not have enough money to pay a medical malpractice settlement or award. Some hospitals have set aside money to cover liabilities, but others have used up the reserves used to cover medical malpractice awards or settlements. As a result, any expenses needed for medical malpractice will come at the expense of patient care.
Most of the hospitals that forego medical malpractice insurance are in poor neighborhoods, are in dire financial circumstances, and cannot afford the millions of dollars a year needed to pay medical malpractice insurance premiums. These uninsured hospitals tend to be in areas where big jury awards are the norm. Some medical malpractice insurers will not insure in these areas due to the size of the awards.
Additionally, New York does not require hospitals to have insurance and hospitals do not need to tell patients that they do not have insurance. Not paying for insurance is just a short term fix though and may be very costly to hospitals if they are forced into bankruptcy by large judgments. However, when the choice is whether to pay for insurance or to pay for nurses, hospitals are likely to pay for nurses.
There is no central database that determines whether hospitals are insured. In a survey done in 2009 by the state Health Department, it found three hospitals in New York City to be completely self-insured and twelve other hospitals to be partially self-insured. Many hospitals without insurance set aside money in order to pay for their medical malpractice claims but several hospitals do not have sufficient funds in reserve to cover these liabilities.
Other hospitals do not have any money set aside. These hospitals end up paying for medical malpractice claims out of its daily budget. Paying for liabilities out of the hospitals daily budget can hurt patients and may even result in more injuries that would lead to medical malpractice claims. Some hospitals have ended up closing units due to inability to afford the liability leaving patients having to seek the necessary care elsewhere.
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