New York State to Conduct Medical Liability Reform Demonstration with $3 Million Federal Grant

ALBANY, N.Y. (June 16, 2010) -- New York State will conduct a pilot program to reduce expenses associated with medical malpractice lawsuits and improve patient safety to reduce preventable medical injuries based in part on a model developed by a Bronx Supreme Court Judge. The 3-year initiative will be supported by a $2.9 million grant from the federal Agency for Healthcare Research and Quality (AHRQ).

The project will be led by the New York State Unified Court System, with the State Health Department (DOH) performing a major role. In addition, five New York City hospitals will participate in the initiative: Beth Israel Medical Center, Maimonides Medical Center, Montefiore Medical Center, Mount Sinai Medical Center, and New York Presbyterian Hospital – Columbia Presbyterian Center. The hospitals will receive funds that can be applied to patient safety initiatives and will contribute significant in kind funds to implement their functions under the grant.

"This comprehensive program will increase patient safety, promote early disclosure, facilitate settlement, and lower medical malpractice costs across the board," said Chief Administrative Judge Ann Pfau. "With this ambitious pilot, New York leads a national effort to bring about a medical malpractice system that is cost effective, efficient and fair. I extend deep thanks to the New York State Department of Health for its contribution to this innovative and groundbreaking pilot."

State Health Commissioner Richard F. Daines, M.D., said "The prospect of a patient entering a hospital and suffering an injury as a result of medical error is unacceptable to all of us. Efforts supported by this grant will improve patient safety while assuring prompt compensation for those who have been injured. At the same time, it will help weed out frivolous lawsuits and support hospitals so they can do their jobs. Above all, the project will permit analysis of adverse events so that we can make sure they do not recur. I thank the five hospitals for taking a chance on a new approach, and I commend the Unified Court System for having the vision to implement a bold new program."

New York received funding under a federal initiative to support efforts by state and health systems to implement projects that improve patient safety, foster better communication between doctors and their patients; ensure that patients are fairly and quickly compensated for medical injuries; and reduce the incidence of frivolous lawsuits and the cost of medical liability premiums paid by physicians and hospitals.

In addition to receiving support from New York's hospitals and physicians, New York's application for funding received letters of support from the New York State Trial Lawyers Association and the New York State Bar Association.

The project consists of four major components:

  • Each hospital will develop and promote a culture of patient safety;
  • Four hospitals will initiate safety interventions in obstetrics; one hospital will initiate safety interventions in general surgery;
  • Each hospital will implement a program whereby it will provide early disclosure to a patient and/or patient's family when a medical error occurs and make an early (pre-litigation) offer of compensation if appropriate;
  • A courtroom will be established to achieve early settlement through Judge-Directed Negotiations for medical malpractice cases from the five hospitals that do not settle early and lead to lawsuits. The judges for those proceedings will be carefully selected and trained according to a curriculum designed specially for this function, with support from the medical associations.

The Judge-Directed Negotiations approach is based on a model developed by the Hon. Douglas McKeon of Bronx County Supreme Court, who is also Chief Judge of Appellate Term, First Department. Judge McKeon presides over all medical malpractice cases involving Health and Hospitals Corporation (HCC) hospitals in the Bronx and Manhattan.

The goal of the project is to reduce medical malpractice "transaction costs," which are estimated to make up approximately 60 percent of medical malpractices costs. Under Judge McKeon's project, savings of up to $50 million annually have been achieved.

Judges selected to participate in the program will receive training in targeted areas of medicine and in negotiation and mediation skills. Their goal will be to achieve rapid settlements whenever possible.

It is hoped that the New York pilot project will become a national model for savings and reform in medical malpractice cases. Data will be collected and analyzed from each component of the pilot, and the Judge-Directed Negotiation program will be evaluated by the Harvard School of Public Health.

New York State has among the highest medical malpractice premium rates in the nation and led the country in the number of medical malpractice claims filed with the National Practitioner Data Bank for the decade ending in 2009.

Hospitals in New York State spend over $1 billion annually on medical malpractice expenses, representing 3 percent of total revenues. Due to high liability premiums and large compensation awards, a number of hospitals in the state have shut down their obstetrics departments or reduced the number of obstetric beds.

To date, attempts to reach consensus on medical liability tort reform in New York State have failed.