But they told us the malpractice crisis was just a myth dept. (Associated Press):
Oregon Health & Science University plans to cut at least 200 jobs and raise tuition by at least 10 percent to free the money needed for higher insurance costs following an Oregon Supreme Court ruling.
The December ruling cleared the way for the family of a brain-damaged child to pursue malpractice damages from the university. It effectively eliminated a liability cap of $200,000 designed to protect state agencies from major damage awards.
The cutbacks, expected to be announced Friday, were first reported by The Oregonian newspaper. Besides trimming jobs and hiking tuition, OHSU expects to restructure or close clinical, research and education programs, and scale back construction on Portland’s South Waterfront.
OHSU said the court ruling will add $30 million a year in insurance and administrative expenses. Though that’s only 2 percent of OHSU’s annual operating budget of about $1.5 billion, it amounts to more than 60 percent of its annual support from the state’s general fund. …
OHSU is Portland’s largest private employer with about 12,000 staff.
More: Victoria Taft (cross-posted from Point of Law).
6 Comments
What the heck is wrong with Oregon’s Supreme Court? Every time the legislature or the voters craft legislation to limit the scope and power of the state (zoning and land use regulation, liability caps, among others) the Supreme Court strikes it down.
A 2% budget spike requires a 10% tuition hike, job cuts of 1.5%, and capital cutbacks? I have to wonder whether these plans were in the works for other reasons and are conveniently being blamed on the malpractice ruling.
It’s worth noting, too, that there seems to be agreement that the hospital was negligent, and that the boy’s actual expected medical costs (i.e., not including pain and suffering) will be $12 million. So, unless one is prepared to let the boy die, that $12 million will have to come from somewhere. Presumably that would be private insurance (other working families), SCHIP/Medicaid (the taxpayers), or charity care (non-negligent hospitals). It’s not at all clear why it would be societally efficient to shift those costs onto one of those non-responsible payers and away from the responsible hospital, which is in the best position to police against its own negligent conduct.
In particular, note that if the hospital is liable for the boy’s medical costs, the taxpayers will be hit for only a fraction of that bill, since only a fraction of the hospital budget comes from tax revenue. If the hospital is allowed to shift the boy’s costs onto Medicaid, then the taxpayers will be liable for the entire sum.
A 2% budget spike requires a 10% tuition hike, job cuts of 1.5%, and capital cutbacks? I have to wonder whether these plans were in the works for other reasons and are conveniently being blamed on the malpractice ruling.
This is one case, I’m sure there will be others. The hospital won’t be able to afford them so they need to cut back care. The same thing happened in Philadelphia and malpractice, just try finding an OBGYN who will deliver babies.
Walter: Most of the award goes to lifetime medical care. The judge should mandate its provision at the Oregon Health and Science University. If torts serve to compensate, deter, and teach others, what decision would achieve more?
This case has confused quite a few people here in Oregon about the difference between caps on non ecomonic damages and caps on all damages. Caps on non-econonic damages were narrowly defeated in a referendum a couple years ago. The medical and business communities have been advocating this change. The caps that OHSU enjoyed until now were very different. They capped all awards, including economic damages. This was clearly unfair and had to change. The only people supporting them were from OHSU, who had a great scam going. They enjoyed low malpractice premiums and were rarely sued. They also were known to take potshots at those of us who didn’t have their protections. Now they will have to start living in the real world. No sympathy from me, sorry. I am only discouraged by the fact that we are even less likely to get non-economic caps now because the press, and of course the lawyers, will mislead people about the difference between these caps and those caps.
Tom, the numbers are flawed.
The job cuts and tuition hikes are for the hospital alone, the budget number listed for the entire university…