June 16, 2003
By Jim Copland
FROM New Jersey doctors going on strike to West Virginia hospitals shuttering their maternity units, news about the medical-malpractice-insurance crisis keep rolling in. New York is not only no exception to the national trend, its spiraling tort awards have gotten so out of control that the American Medical Association recently gave our state the dubious distinction of being one the nation's medical "malpractice hellholes."
And now the state Court of Appeals' ruling in Desiderio v. Ochs has put the Empire State so close to the brink of disaster that "hellhole" could become an understatement. In that case, the state's highest court affirmed a trial judge's decision to raise a jury's $40 million verdict to almost $140 million.
This could push up malpractice-insurance premiums by 100 to 300 percent. And that, warns Dr. Spencer Foreman, the president and CEO of Montefiore Medical Center, would "compel hospitals to stop delivering babies, shut down emergency response units and lay off workers."
In its decision, the court interpreted the poorly drafted "structured judgment" section of New York's 1986 tort-reform law (intended to rein in malpractice costs) to double-count inflation and to increase the victim's estimated cost of care well above that given in the expert testimony.
But the Court of Appeals also unanimously called on the Legislature to "revisit the statute," and almost every interest group involved agrees that they should do just that.
* Both the state and the city (which run many hospitals) are fearful of skyrocketing insurance costs, particularly in a time of already-severe budget crisis.
* The unions have also come out calling for action; as noted by Jennifer Cunningham, Executive Director of New York's Health and Human Service Union, "thousands of health-care jobs are on the line."
Our lawmakers in Albany can easily remedy this problem through a simple amendment to the statute. But the plaintiffs' bar is so powerful that there is a very real risk that the Legislature will fail to do so - or that it will eliminate the structured-judgment law altogether, returning us to a pre-1986 crisis of escalating costs.
The same trial lawyers who have scuttled President Bush's call for a $250,000 cap on medical-malpractice damages for pain and suffering - despite the indisputable success of such provisions in states like California - exert enormous pressure in Albany.
As Manhattan Institute Senior Fellow Walter Olson wrote in last Monday's Post, "The most heartfelt goal of Speaker Sheldon Silver's Assembly majority, it sometimes seems, is to keep the state safe for the activities of the New York State Trial Lawyers Association."
Indeed, New York state really needs a comprehensive tort-law reform, particularly in the medical-malpractice arena. In 2002, the three largest malpractice verdicts in the nation - $94.5 million, $91 million and $80 million - all came here.
Such extreme verdicts seriously threaten the quality of New York's health-care system, which has heretofore been outstanding. As Binghamton neurologist Jeffrey Riben noted in the Albany Business Review in March, the biggest problem with out-of-control medical-malpractice suits is that the most skilled doctors - taking on the riskiest procedures - are the very people most likely to be sued:
"So if you want to eliminate those people with multiple suits, you would have to eliminate all of our neurosurgeons, all of our orthopedic surgeons, all of our obstetricians, anybody working in an emergency room and everybody reading mammograms. I think you would agree if we eliminated those specialties, we would not improve health care."
In short, New York's medical-malpractice tort system is a mess. Amending the structured-judgment law to overrule Desiderio would hardly fix the problem, but it would avert a medical catastrophe.
If our lawmakers in Albany can't resist the plaintiffs' bar enough to make this simple change, we may have to have our babies delivered in Wisconsin.
Jim Copland is the director of the Manhattan Institute's Center for Legal Policy.
©2003 New York Post