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The Medical Malpractice Insurance Industry-A Study in Stupidity

Posted by Andrew J. Barovick | Oct 13, 2010 | 0 Comments

Aon Risk Solutions reports that costs stemming from medical malpractice claims will rise. But you have to wonder why it is practically alone in the wilderness performing this Chicken Little play, while most other national insurers have acknowledged that such costs are not only down, but continue to decrease. Even in New York, there was no increase in premiums for two years, followed by this year's 5% increase (see earlier post here ). Pennsylvania insurers are seeing only drops in costs. Could it be that Aon will profit from the increased premiums it will likely be charging doctors and hospitals?

Meanwhile, it's fascinating how little coverage has been given by the medical/insurance industry press to the early resolution of medical malpractice cases facilitated by New York's own Judge Douglas McKeon, as part of President Obama's Pilot Program addressing healthcare costs.   This is the only example I have seen, despite the fact that, as the article acknowledges, the program saves hospitals millions of dollars.  Could it be that it is essential to Judge McKeon's process that hospitals acknowledge their mistakes early on, placing the liability insurers' bean counters into a long-term and uncomfortable cringe state?

And yet, when hospitals are forthright at the beginning of the adversarial process, and engage in meaningful settlement negotiations, they save their insurers the cost of months of billable hours by defense lawyers doing little more than delaying and obfuscating so that they don't kill the goose that laid the golden egg, that is, the lawsuit brought by the plaintiff.  As long as the suit is alive, they can keep billing the insurance company to “defend” it.

The smart insurance company sees the value in early resolution based on frank discussions from the outset.  The remaining insurance companies, who are unfortunately in the majority, roar for tort “reform.”  And apparently unbeknownst to them, they do so to their own detriment.

About the Author

Andrew J. Barovick

Mr. Barovick is a graduate of Columbia College and Cardozo School of Law. He began his legal career at the Queens District Attorney’s Office, where he tried over 20 felonies to verdict, and argued an equal number of appeals before the Appellate Division, Second Department, the New York Court of Appeals and the United States Court of Appeals for the Second Circuit.


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$7.9 million dollars for infant client who suffered severe brain injuries due to post- delivery medical malpractice.

$500,000 wrongful death/medical malpractice settlement on behalf of patient brought to hospital emergency room with serious injuries who suffered complications while unmonitored and died.

$425,000 wrongful death/medical malpractice settlement during trial on behalf of senior hospital patient whose surgeon failed to timely address her worsening symptoms, resulting in her death.

$250,000 to young man whose physician failed to diagnose an impending torsion testicle, causing the loss of the affected testicle.

$200,000 to young mother whose OB/GYN failed to timely diagnose and treat her ectopic pregnancy, resulting in excruciating, long-term pain and the need for surgery to address the ectopic pregnancy once it was diagnosed.