New York Considers Taxing Doctors Out of Existence

A $50,000 extra fee imposed on each doctor in New York State or "substantially" higher insurance rates for physicians with histories of losing malpractice cases could be part of the solution to the state's medical malpractice insurance crisis, state Insurance Superintendent Eric Dinallo told The New York Sun in an interview.

Mr. Dinallo is co-chairman, with the state's health commissioner, Dr. Richard Daines, of a task force created this past summer by Governor Spitzer that was assigned to report by the end of this year on ways to slow increases in malpractice premiums. The premiums, which are set by the state Insurance Department, rose 14% this year, the largest increase since 1993.

The rates, which are set by county and medical specialty, have forced some doctors to close their practices and raised fears of shortages of physicians in some specialties. A Brooklyn brain surgeon now pays $267,000 a year in malpractice insurance premiums and an obstetrician in Queens pays $180,490.

Members of the state task force have met six times behind closed doors, but several groups represented on the panel are at odds, including doctors, trial lawyers, consumer advocates, and insurance underwriters.

Mr. Dinallo said some possible recommendations include changes in the civil litigation system, increased physician accountability, and risk distribution, which could foster a more competitive insurance market. He also suggested issuing bonds or turning to the wider insurance industry to address the underwriters' debt.

Higher fees are shorthand for taxes, which will end up sending more doctors out of the state, and reducing the availability of many specialities in the state, especially in rural areas. New York City, home to some of the most prestigeous hospitals in the nation would also be badly affected by the increases. Proponents argue that the increases are necessary to bail out the state-regulated insurance pool for high-risk physicians, the Medical Malpractice Insurance Plan, which is currently $500 million in debt.

Those doctors that remain in the state would likely pass on the charges to their patients and the insurance companies would have to eat those costs as well. In other words, it's money that goes down the drain and does nothing to improve health care in the state. Right now, it's the insurance plan that is holding the bag, but the end result will be that patients will see fewer doctors and higher costs unless medical malpractice costs are contained. The state's Democrats are so adverse to tort reform that higher fees are likely to be the primary means of solving the problem, even if it means higher costs that are passed on to consumers.