The high price of medical negligence

  • Niall Hunter, Editor

Hospital consultants working in the private sector are facing massive increases in their medical negligence insurance costs, with some consultants saying their private practice may no longer be viable as a result of these unsustainable overheads.

The crisis caused by increasingly unaffordable cost of negligence indemnity insurance may threaten the provision of hospital services in both the private and public sector, consultants have warned.

Some working completely in private practice are now faced with yearly indemnity insurance bills of over €100,000 per annum. The level of increases being imposed on consultants this summer are of the order of 50% to 60%.

The Medical Protection Society (MPS), the main insurance company providing negligence cover to private consultants in Ireland, says these rises are unavoidable, and are due to the frequency with which private consultants are being sued, in addition to rising costs of settling medical negligence claims.

The MPS has acknowledged, in correspondence seen by irishhealth.com, the 'deteriorating viability' of private medical practice for many consultants in Ireland who pay for their indemnity cover for private work. It says it has no option but to impose massive increases in order to be able to meet the future cost of negligence claims.

Due to the cross-fertilisation between public and private hospital practice in Ireland and the knock on effect of these indemnity increases on the public hospital sector, the Department of Health says it is undertaking a comprehensive assessment of the situation.

Some consultants with private practice are now indicating that their practice may no longer be viable due to massive indemnity bills, and this could have knock-on effects for services at private hospitals.

The indemnity insurance increase will also impact on the public hospital sector if private practice becomes more scarce, as this will mean more patients accessing already pressurised public hospital care.

The State already heavily subsidises private practice negligence indemnity in Irish hospitals.

Currently, the State, through the Clinical Indemnity Scheme run by the State Claims Agency (SCA), covers, on a 'claims-made' basis, the cost of negligence claims against consultants working in public hospitals - this coverage extends to their private practice in public hospitals.

The State also, however, subsidises the cost of settling private practice negligence claims for consultants who work in public hospitals but who also practice in private institutions 'off-site'.

Under this arrangement, the State indemnity scheme covers the excess portion of a negligence settlement in private practice where an agreed limit is exceeded. The remainder of the claim cost is covered by a private consultant's indemnity insurer.

Under this arrangement, for most specialties, the State will cover the excess in any negligence claim above an agreed cap of €1.13 million.

Consultants who work completely in the private sector do not have their negligence claim settlements subsidised by the State, and indemnify themselves against negligence claims through the MPS.

For this reason, consultants who work completely in the private sector pay higher insurance rates to the MPS than those who work 'off-site' in private hospital on top of their public work.

Both of these categories of consultant now face massive indemnity insurance rises.

The crisis has again put into focus the huge burden on the exchequer, private indemnity insurers and healthcare providers of medical negligence claim costs.

According to the State Claims Agency, the estimated liability against all active claims being handled by it at the end of 2012 was €1.16 billion.

Why do we still have a very high level of medical litigation in Ireland, why does it take so long to bring cases to a satisfactory conclusion, and why is the whole process so costly?

Well, it depends who you ask. The legal profession will point the finger at flaws in the way these cases are dealt with and defended, while the healthcare sector will point to inefficiencies in the legal process.

Certainly, numerous proposals have been made over the years to speed up and streamline the lengthy, cumbersome and costly manner in which adverse incident claims are dealt with, but nothing much ever seems to happen.

The Medical Protection Society, which would have an obvious interest, along with the State, in keeping the cost of claims down, has called for major legal reforms to achieve this. A  Government working group on medical negligence chaired by Ms Justice Mary Irvine has recently drawn up proposals for 'pre-action protocols' for these cases to speed up the process by facilitating a quicker exchange of information at an early stage of the litigation process.

Many healthcare providers would point the finger at the legal profession in terms of causing delays in processing cases, but lawyers acting for plaintiffs in negligence cases say the problem often lies with the doctor or hospital and those representing them in such cases.

Ernest Cantillon, a solicitor specialising in medical negligence and a member of the Medical Injury Alliance, says in terms of the cost of negligence cases, the more one has to do in prosecuting a case, the more it costs.

"If we had early admissions of wrongdoing the costs would tumble," he told irishhealth.com

Mr Cantillon says often a key issue in terms of the defendants in a negligence claim is that they still tend to act defensively.

"There is a myth, which appears to be reinforced as fact in some medical schools, that to admit wrongdoing in such cases is dangerous."

However, he claims, studies show that admissions of wrongdoing reduce the level of claims, are appreciated by patients, with the result that few of them go on to make a claim following a medical error, and they also help the hospital to identify any problem areas of practice that need to be addressed.

Asked why there has been so little progress in settling up viable alternative processes to lengthy and expensive litigation, Mr Cantillon says again, this is partly due to a culture of 'defend and deny'.

There has, he says, been a small increase in the number of mediations, which is welcome, but says we should be cautious of 'behind closed doors' justice. "An important feature of a modern democracy is the administration of justice in public."

Mr Cantillon points out that a working group which was established on streamlining the medical litigation system made significant progress, but the Government has not acted on its recommendations.

As to why legal costs are so high, Ernest Cantillon says this is due to the fact that the more one has to do in prosecuting a case, the more it costs.

While many would feel the legal profession has not endured the reductions in fees experienced by other professions in recent years, he says professional fees for lawyers have in fact reduced by between 30% and 50%.

Ernest Cantillon feels that what will really transform the medical negligence system is to have a legal obligation imposed on all health workers to simply tell the truth to their patients and to the court when there is litigation.

However, a different story is told by those who are involved in defending and paying for medical negligence actions - in the latter case this is usually the taxpayer.

Ciaran Breen, head of the State Claims Agency, in a recent article, strongly denied that operates a 'defend and deny' strategy at all costs in these cases; for example, forcing families of brain-damaged children into court to prove their cases.

"Nothing could be further from the truth," he said.

Ciaran Breen said the SCA deals with plaintiffs and their families who, in many cases, have suffered enormous trauma and pain ' and it is conscious that it has a duty to act fairly, ethically and with compassion."

However, he said the SCA must, as part of its remit as a State agency, fulfil certain obligations.

"Among these in an obligation to doctors, nurses, midwives and other rallied healthcare practitioners in public hospitals to defend their professional reputations and vindicate the exercise of those practitioners' duty of care to patients."

Mr Breen said these cases, by their nature, involve complex issues and require detailed verification of medical and scientific evidence, usually involving the calling of expert witnesses by both sides. This process inevitably takes time 'and is understandably frustrating for plaintiffs and their families'.

The SCA says while the complexity and details of many negligence cases contributes to lengthening the process and making it costly, a key factor is where settlement demands made by plaintiffs' lawyers are significantly overstated.

Mr Breen says it often happens that plaintiff's lawyers initially seek a multiple of two to three times the figure they are eventually prepared to settle for, thus dragging negligence cases out longer than should be necessary.

In such cases, he says, the SCA has no choice but to discharge its duty to the taxpayer and proceed with allowing a case to go to a formal court hearing.

Mr Breen says the SCA is anxious that the current lengthy, traumatic, unwieldy and ultimately highly expensive medical negligence legal system be changed.

While a mediation system offers a calmer and less adversarial environment to resolve such cases, the number of mediations in negligence cases remains low. The SCA settled only 19 cases through mediation in 2013 and offered it in other cases.

"But some plaintiffs' lawyers - and, it must be stressed, a minority of them - remain implacably opposed to mediation in these cases and have been vocal in denouncing it - it is difficult to understand why."

The SCA also says the pre-action protocol system proposed by the Government working group would lead to much-needed improvement and reform of clinical negligence litigation by reducing the current unacceptable delays.

The Agency also says it is promoting, along with the HSE, an open disclosure project in 46 hospitals to improve communications between healthcare providers and patients when things go wrong.

Clearly, we still have a long way to go in ensuring that the medical negligence system less unwieldy ,less expensive and less traumatic for patients who suffer as a result of adverse clinical events and their families.

In the meantime, the rising cost of covering hospital doctors for negligence claims is potentially threatening the provision of services.

Indemnity hike threat to private care


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