Story Originally Appeared in the Chicago Tribune
Corporations, hospitals and insurance companies have fought for more than two decades to chip away at Americans' right to enter a courtroom and seek damages for medical negligence. The most publicized of these efforts has taken the form of capping the damages that patients can collect.
Now there's another effort to limit medical negligence claims. It has the effect of preventing an injured patient from filing a lawsuit at all.
Hospitals and doctors are simply "going bare" — in other words, not carrying medical malpractice insurance. Hospitals and doctors will often set up a corporation, forgo the purchase of malpractice insurance, and if the corporation is sued, file for bankruptcy and set up a new corporation.
In Illinois, although a driver must have insurance to get behind the wheel, a hospital that cares for thousands of patients is not required to have insurance.
In one case, in 2007, a 21-year-old woman had a baby at a South Side hospital, St. Bernard. Due to a lack of oxygenated blood, the baby's brain was damaged. We sued St. Bernard on behalf of the child, alleging negligence. The hospital said that it had no malpractice insurance to cover the claim. Now, the young mother and her baby must go through life without enough money for proper care. (St. Bernard says the infant was treated appropriately and it has done what it can to resolve the matter.)
Hospitals and doctors that choose to go bare often claim they cannot afford to pay high insurance premiums while at the same time caring for their patients. Insurance companies blame the high premiums on large verdicts that they allegedly pay out. Yet, the blame for the inflation of premiums in Illinois must be placed on the insurance companies. It has been proved that even where insurance companies have had to pay out large jury verdicts or settlements, increased premiums do not correlate with the increase or decrease in payouts during any given year.
Every hospital in Illinois should be required to carry a minimum of $5 million in liability coverage. A small tax could be charged on those hospitals that can afford the coverage, which could be used to supplement the payments of hospitals that cannot afford it. This would allow all hospitals to have some insurance coverage while motivating hospitals to press insurance companies to lower premiums.
The solutions are not complicated, yet they require action soon. This reform will not come without pressure from all parties — the doctors and hospitals that buy insurance, the Illinois legislature and trial lawyers.
Deratany and MacIver are lawyers at the Deratany Firm in downtown Chicago.