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Don’t Be Misled by New York Fund for Newborn Neurological Damage

“Beware of Greeks bearing gifts,” warned the sage at the gates of Troy, before the Trojan horse led to unforeseen calamity. The same might be said of ambitious governors bearing ill-conceived health care reform proposals.

Newborn Medmal Fund

In the New York legislature last spring, Gov. Andrew Cuomo’s proposal to cap non-economic damages in medical malpractice cases failed. But the governor succeeded in creating a compensation fund for infants who suffer neurological damage caused by medical mistakes.

The new fund is scheduled to take effect on October 1. It applies to “birth-related neurological injuries,” including brain and spinal cord injuries, caused by oxygen deprivation or other injury during the birth process. To participate, the infant must have been left with a “permanent and substantial motor impairment” or a developmental disability.

The fund is designed to pay for ongoing medical care for infants who meet these criteria. An estimated 150 to 200 babies are likely to qualify each year, according to Gov. Cuomo’s chief health care adviser, Jason Helgerson. Participation is mandatory for anyone seeking Medicaid, as well as for those pursuing medical malpractice lawsuits.

The size of the fund beyond the first year has not yet been determined. In the first year, about $30 million will be taken out of a larger state fund, the Health Care Reform fund, to pay for it. After the first year, according to Mr. Helgerson, the size of the fund will vary, depending on calculations made by actuaries regarding its future needs.

Medmal is Different Than Work Comp

There are major problems with treating medical malpractice cases like this. Less than two years after the national furor over “death panels,” does it really make sense to have state administrators making decisions about the ongoing care of severely injured children? Even if administrators have the best intentions in the world, their decisions are likely to be more concerned with preserving the fund than with getting the right care for injured kids.

In other words, New York’s neurological damage fund is a form of rationed care – something that Americans have said passionately they do not want. Health care parceled out by bureaucrats managing a fund is in sharp contrast to the goals of a medical malpractice lawsuit , which is to obtain proper compensation for injured people and to hold careless health care providers accountable.

To be sure, everyone is concerned about health care costs. But there are better, more just, ways to bring those costs down. The governor and his advisers could have focused on encouraging medical providers to improve the quality of care and prevent errors in the first place. Instead, they created a heavy-handed fund for the rationing of care for injured newborns and tried to dress it up as a gift from the state.