In connection with its 2011 budget, the Legislature added a new Title 4 to Article 29-d of the Public Health law, which provides for the creation of the Medical Indemnity Fund. The purpose of the Fund is to “provide a funding source for future health care costs associated with birth-related neurological injuries,” and thereby relieve medical malpractice defendants and their insurers from the burden of paying these costs directly at the time of judgment or settlement. Since these costs can be difficult to project with certainty, and may be considerable over the lifetime of an injured infant, the Fund should provide a degree of certainty for families without diverting extra resources from the health care system to assure future care.
The new legislation is intended to address a very real, as opposed to a theoretical, problem. In 2009, the state’s hospitals spent $1.6 billion to cover medical malpractice expenses, or about 3 percent of their revenues.1 It has been estimated that as much as 50 percent of these expenses were due to cases involving neurologically impaired infants.2 It is anticipated that the Fund may lower the cost of health care providers’ malpractice insurance by as much as 25 percent and reduce hospital malpractice costs by as much as $320 million statewide.3
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