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High costs drive some hospitals off malpractice insurance roles

Maryland residents considering making a medical malpractice claim might be interested to learn about a trend in healthcare triggered by rising costs. It involves hospitals and whether they have bothered to maintain medical malpractice insurance to protect them against hospital negligence.

It might surprise many to find out that in some cities a pattern is developing in which some of the most financially troubled hospitals are either partially or completely uninsured for malpractice. According to one state's records, an apparently growing number of hospitals are forgoing what most consider to be a necessary safeguard because they do not have enough money to pay for the coverage. It's not clear whether this is an issue in Maryland, but it's reported to be occurring in New York, Philadelphia, Chicago and Miami.

Observers say that it might be understandable from a cost perspective, but they say that the cost savings may ultimately represent a disservice to the very patients the hospitals are there to help. According to one report, some of the hospitals following this model have used up what reserves they once had, leaving them exposed. One law professor suggests that the choice to drop coverage is socially irresponsible, as patients may have nowhere to turn to obtain appropriate compensation if harmed due to the hospital's negligence.

While all hospitals strive for competent health care, accidents can and still do happen. Medical malpractice can occur in hospitals through medication errors, failure to diagnose or even errors in an emergency room. When a person arrives at the hospital seeking treatment, it is only fair to expect competent care.

The decision to drop coverage can occur in part because some states do not require malpractice insurance for hospitals. Furthermore, many of the hospitals that go uninsured are located in areas that historically have paid out big awards. While the question of whether or not a hospital is insured has no bearing on a victim's right to recovery, it can affect their ability to actually collect any judgment.

Source: The New York Times, "Troubled New York Hospitals Forgo Coverage for Malpractice," Anemona Hartocollis, July 15, 2012

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