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1998-04-29 13:57:28


Medical Malpractice Y2K Insurance: Not in Australia



Insurance companies in Australia are unlikely to insure against y2k-related malpractice lawsuits. This places enormous liability and risk on physicians and hospitals.

This is from SIGHTINGS (April 22).

* * * * * * *

The chairman of the Australian Stock Exchange has told hospitals to expect to lose their malpractice coverage for Y2K events.

This is the first step in shutting down the medical profession. Doctors, hospitals and all forms of testing and therapeutic facilities and potentially the entire drug industry are about to lose their insurance. Any continuation of medical care will be carried out at the direct personal risk of the individual caregiver. The beginnings of this Y2K event will be noticed in just a few months, certainly before the end of 1998. Any elective surgery should be done as soon as possible or it won't happen.

Doctors are admitted to practice in hospitals. Hospitals will require doctors to show evidence of financial responsibility. Without malpractice insurance, doctors will be at personal risk for lawsuits springing from substandard care or improper care or injury due to Y2K problems, including misdiagnosis, improper dosage or therapy, inadequate or confused records and any other possible difficulty arising from any problem connected to any irregularity in procedure associated with any form of electronics or computers. Doctors will insist on being indemnified by hospitals and hospitals will insist on being protected under doctors' policies. Insurance companies will refuse to cover anyone.

Unless a hospital can thoroughly test, fix or replace virtually every device that makes it more than just a hotel, that hospital will have to close its doors. If doctors can not demonstrate malpractice insurance, they will be dropped from practice by a hospital unless they are willing to and able to put their personal assets up as security against malpractice claims. Losing access to hospitals will damage doctor's practices and probably force them to quit practicing. How can they provide full service to their patients without access to hospitals?

The hospitals are trapped. If they can not get malpractice insurance due to a problem that due diligence could have avoided, the Directors will be personally liable for Y2K induced injury to patients. It will not be considered prudent for the Directors to vote hospital money for their personal protection when they failed to authorize Y2K remediation in a timely fashion. Stockholders will be very angry when the value of their stock drops to zero as hospitals close their doors. . . .

Most hospitals are financed by big ticket borrowing from banks. The banks will take a very heavy hit when the hospitals close their doors and have zero cash flow to repay loans. Will the banks foreclose on hospitals? Are communities going to be stiffed on bond issues for medical facilities guaranteed by the tax payers?

Patients will be very concerned when hospitals evict them in order to avoid Y2K risks. Those patients will be angry both at doctors and at the hospitals. It is reasonable to assume that hospitals will, at some point stop receiving patients that might need long term care that could expose them to Y2K risks. This will put further pressure on doctors and ultimately lead to more law suits.

Doctors and hospitals are all tightly wrapped in contractual obligations to HMO's and it's hard to believe that patients and businesses who have been paying into insurance policies are going to feel good about losing their local medical services.

What's going to happen to schools? Will colleges and universities continue to provide health care coverage for students? Will school athletic progams at any level be able to continue without full medical care available?


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