The New York Times, writing about a study by the NYS Health Department in 2009, reports a disturbing trend among numerous New York hospitals. Some area hospitals are operating without medical malpractice insurance, or have deemed themselves “self-insured.” These self-insured facilities generally keep a reserve of money to handle malpractice claims, however the Times found that often this cash was not enough to cover liabilities. This shortage in funding can lead to undervalued settlements in cases of actual malpractice, or, in extreme instances, hospital bankruptcy. Saint Vincent’s Hospital in Manhattan went bankrupt in 2010.
An interesting point raised by the article is that some hospitals choose to self-insure so as to avoid potential malpractice litigation, assuming that lawyers will not take a case if they feel that the hospital will not be able to pay if found liable. This leaves a hospital in the position of potentially being unable to pay should it lose a lawsuit, in turn opening up the possibility for bankruptcy.
Although a list of insured hospitals is unavailable, the Times details several hospitals in the New York City area that are either fully or partially self-insured. The full article can be accessed here.