Is this the endgame for the medical malpractice crisis?

A recent cover story in the New York Times describes how some financially struggling hospitals are “going bare,” meaning they are partially or completely forgoing malpractice coverage.

From an economic standpoint, it’s a rational thing to do.  Malpractice insurance costs are skyrocketing, forcing these hospitals into uncomfortable choices.

As one administrator bluntly puts it, “If I have to pay for nurses versus fund for malpractice, what are the hospitals going to do?”

But without insurance, malpractice verdicts directly impact patient care. Consider that happened to Wyckoff Heights Medical Center, in Bushwick, NY:

A jury awarded a $31.6 million judgment against the hospital in 2006, which was later reduced to $12.9 million and is being paid out in installments through 2018. As a result of that case, Mr. Hernandez said, the hospital closed its obstetric unit because it could not afford the liability. The hospital was also not delivering enough babies to justify the expense, he said.

Plaintiffs are affected as well, since they are forced to accept what’s little is left, or risk closing the hospital:

The lawyers said they were often forced to take payment on installment, or to try to pin more blame on physicians, who may have their own insurance. Martin Seinfeld, a malpractice lawyer, said he had had three cases this year involving Jamaica Hospital and New York Hospital Queens in which hospital lawyers had held out the specter of bankruptcy if he did not reduce his demands.

Doctors, who may have their own individual policies, now become malpractice targets.

This scorched-earth scenario is the endgame of the malpractice crisis.

Who’s to blame? Well, politically speaking, everyone.

Conservatives have failed to become flexible in their tort reform solutions, focusing only on a cap on non-economic damages. That’s proven to be politically unfeasible, and is unfair to patients.  They should re-frame the malpractice reform debate that focuses on injured patients instead, like in my home state of New Hampshire which recently passed first in the country malpractice reform.

Progressives on the other hand, are beholden to the interests of trial lawyers, and often dismiss the impact of malpractice on health care providers. Tort reform is routinely ignored in their health reform proposals, with the most recent example being its glaring omission from the Affordable Care Act.

So, it’s no surprise that the current malpractice trajectory leads us to what’s happening in New York. Other litigious counties are seeing similar situations, as hospitals and doctors find that risking bankruptcy as a more viable situation than carrying malpractice insurance.

And in the end, it’s the patients — particularly the poor population that these hospitals serve — that lose the most.

Kevin Pho is co-author of Establishing, Managing, and Protecting Your Online Reputation: A Social Media Guide for Physicians and Medical Practices. He is founder and editor of KevinMD.com, also on Facebook, Twitter, and LinkedIn.