Johns Hopkins gets help with $190M settlement

Johns Hopkins Hospital agreed to a massive $190 million payout to settle charges that a former physician secretly recorded pelvic exams of patients. However, the legendary Baltimore-based provider will not make the payment solely on its own, according to the Baltimore Sun.

Johns Hopkins teamed with several other academic medical centers in recent years to create insurance entities with the purpose of pooling risk and cutting costs. The other participants in the pool are affiliated with Yale, Cornell and Columbia University, as well as the University of Rochester. The hospitals have formed MCIC Vermont and Medical Centre Insurance Company Ltd. The former is based in Vermont, which has relatively loose malpractice insurance regulation, and the latter is based in Bermuda, which is a popular country for insurers looking to evade regulation. Altogether, the companies provide liability coverage to 16 hospitals, 12,000 physicians and 50,000 total employees.

The settlement agreed to by Johns Hopkins is one of the biggest negligence payouts by a hospital in recent memory. It stemmed from the conduct of longtime gynecologist Nikita Levy, M.D., who surreptitiously recorded pelvic exams---many of which were unnecessary--on as many as 8,000 patients.

Together, the two firms will cover $25 million of the settlement, which is more than all the claims they had settled over the past five years. The remainder will be covered in the form of reinsurance coverage obtained by Johns Hopkins from other carriers, although the Sun reported it was perilously close to the hospital's $200 million liability cap.

"All funds will come from insurance. As a result, this settlement will not in any way compromise the ability of the Johns Hopkins Health System to serve its patients, staff and community," a Johns Hopkins spokesperson told the Baltimore Sun.

Experts interviewed by the Sun indicated that the management of the insurance companies may have decided to settle the case due to the relatively small sums each individual patient would receive--no more than $24,000 apiece--and the clear photographic evidence of the victimized patients.

To learn more:
- read the Baltimore Sun article