Free Consultation:212-766-5222

Leav and Steinberg Team

Cuomo’s Proposed Budget Will Punish Injured Children and Their Families

Governor Cuomo has submitted as part of the proposed budget for New York State a cap on compensation for victims of medical malpractice for their pain and suffering of $250,000. This mandatory cap will kick-in only after a doctor or hospital has been found guilty of malpractice that caused an injury to the patient. Therefore, it will punish only those patients who have meritorious cases. Those who are most seriously injured will be forever barred from seeking reasonable compensation from the wrong-doer and their insurance company..

Cuomo also is attempting to force the State Legislature to pass the budget, on an up or down vote, which also includes a fund, paid for by taxpayers but administered by the insurance-industry, that will decide the amount and extent that brain-injured children can receive medical treatment. Essentially he is gutting New York’s civil justice system and forcing brain-injured children and their families to become perpetual litigants against a fund that will control all aspects of their financial lives. This is being done in the name of “budget cutting” and “Medicare reform.” In reality, the cap will have the result of forcing more brain-injured victims of malpractice into the Medicare system. Meanwhile private insurance carriers, who insure hospitals and doctors, will no longer bear any real burden in compensating victims of their clients’ malpractice.

The following is an excerpt that appeared on March 7th, 2011, in CounterPunch and articulates why Cuomo’s cap must not become the law of New York:

“Many in the health care and insurance industry seem to regard the civil justice system as a nuisance that threatens to destroy our economy and way of life. In reality, America’s civil justice system plays an indispensable role. When the rights of injured consumers are vindicated in court, our society benefits in countless ways: compensating victims and their families for shattering losses (with the cost borne by the wrongdoers rather than taxpayers); preventing future injuries by deterring dangerous health care and other practices, spurring safety innovation; and educating the public to risks associated with certain products and services. These legal rights provide society with its moral and ethical fiber by defining appropriate norms of conduct.

Governor Cuomo needs to review the facts on medical malpractice. First he should know that supporters of tort “deform” invoke one myth after another: a litigation explosion, juries automatically ruling in favor of plaintiffs and routinely awarding punitive damages, an economy shattered by these awards. Each of these notions is demonstrably false. Only a tiny percentage of persons injured bring lawsuits, and an even tinier percentage of those who do receive large verdicts. Limiting victims’ rights is an anti-democratic solution to a trumped-up problem.

Second, a driving force behind this dishonest campaign is the insurance industry. Whenever, over the years, insurers face low interest rates and declining stock investments, they start the drumbeat against justice for victims. They’ve made a particular cause against liabilities for medical malpractice. Instead of demanding disciplinary action against incompetent physicians, urging medical associations to police their own ranks, the insurance industry lobbies state and federal legislatures to curtail victims’ rights and remedies in courts of law. At the insurance industry’s behest, their physician policyholders have joined the call.

Why do physicians allow themselves to be tools of insurance companies that gouge them especially when they are not among the incompetent few who account for most malpractice claims (five percent of doctors are involved in roughly 50 percent of malpractice payouts)? One answer is that insurance companies frighten physicians with false data suggesting that malpractice suits run amok. A persuasive case can be made that there are far too few malpractice suits. The 1999 Institute of Medicine study estimated that gross malpractice in hospitals alone takes up to 98,000 American lives a year and causes hundreds of thousands of serious injuries. Yet various studies show that roughly 90% of people harmed by medical malpractice do not even file suit.

If you total the entire amount of premiums physicians pay in a year for their malpractice insurance and divide it evenly by all the physicians practicing in the United States, the average annual premium is less than $10,000 per doctor. Very manageable. So why are some doctors paying $50,000 or $100,000 a year to their malpractice insurers? Because the profit hungry companies have learned to over-classify their risk pools, thereby charging exorbitant amounts to specific specialists like obstetricians and orthopedic surgeons. In addition, because insurers fail to surcharge the few incompetent physicians in these specialties, the competent specialists pay for more than they should.

There is another benefit to the insurance industry from this kind of over-classification. When obstetricians are gouged, they protest loudly, threaten not to deliver babies, and sometimes actually go on strike. This makes great television — crying babies and physicians in their garb blaming lawyers – and deflects blame from the insurers, who laugh their way to the bank. In recent years, their profits have soared.

Neither organized medicine nor the insurance companies go after bad doctors. The AMA’s web site does not report any data about incompetent or crooked physicians, and the insurance companies have shown little interest in loss prevention. Instead, both physicians’ and insurers’ lobbies fund and press legislators to enact laws that politicize the courts, tie the hands of judges and juries, and make it harder for innocent people or children to receive just compensation for their tragic suffering.
Isn’t it time to focus on malpractice prevention instead of trying to hamstring hundreds of thousands of Americans harmed by their doctors’ negligence? Are malpractice awards the national crisis physicians and insurers suggest? In fact, the entire medical malpractice insurance industry payout to victims in verdicts and settlements is about $5 billion a year (substantially less than the amount our the country spends on dog food). Isn’t it time to focus on malpractice prevention instead of trying to restrict the rights of hundreds of thousands of Americans harmed by their doctors’ negligence?”

We are on the verge of the most egregious loss of access to civil justice in the history of New York State. The Cuomo Cap will eviscerate New Yorkers’ rights to redress medical negligence. Is it worth it for the sake of political expediency?

By Daniel T. Leav