Hospitals Hit With Barrage Medical Malpractice Settlements
The pandemic has, obviously caused a number of issues, but one of the largest was that it effectively temporarily shut down courthouses, thereby preventing the courts from processing claims related to lawsuits, criminal prosecutions, and more. This resulted in medical malpractice claims bottlenecking on the docket. While hospitals enjoyed a brief reprieve related to the court shutdown, the flip side is that they are now double-paying settlements related to malpractice lawsuits.
Meanwhile, hospitals are also reporting increased labor and supply costs even as medical debt in the United States makes up the majority of all individually- or family-held debt. As a country, we are paying too much for medical services and no one can really figure out why.
Like most of us, the hospitals did set aside revenue that would have been paid for medical malpractice that wasn’t being paid during that period. However, like most of us, the hospital’s expenses exceeded what they had anticipated.
Who is this hurting?
Generally speaking, medical centers have insurance that pays medical malpractice claims. This insurance is paid on a monthly basis, like most insurance, or as part of a payment plan. Some medical centers, however, choose to self-insure. These are the places that have been hit the hardest because they are now out of money to pay off the judgments. If judgments are entered against them and they cannot afford to pay, the clinic can be driven into bankruptcy by the judgment. On the one hand, it’s their own fault for self-insuring. On the other hand, this provides them with a way to control expenses. But most of these clinics are one catastrophic incident away from becoming insolvent. Today, it’s more a matter of several small incidents rapidly eating through their reserves.
One large trial that is set to start in Florida accuses a hospital of employing an intoxicated surgeon who injured several patients. The case could result in more than a billion dollars in damages handed out to the patients, and a judgment of punitive damages appears likely.
Large hospitals like the Cleveland Clinic have reported operational and insurance expenses increasing 66% over the past 2 years. This, they said, was related to medical malpractice and other forms of insurance that a hospital purchases like general liability and auto insurance.
Is there an increase in medical malpractice lawsuits?
That is unclear at this point. We know that hospitals are paying more and more cases have bottlenecked in the courts. We know that hospitals have paid more than they saved for. We don’t know if the pandemic or issues related to the pandemic have caused an uptick in the number of medical malpractice lawsuits. Thus far, the only thing that has increased is the size of the payouts to victims.
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