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Time to strike a balance

14 June 2019

Dr Tony Behrman, medical business consultant at Medical Protection, looks at why action is needed now to tackle the rising cost of clinical negligence

As South Africa moves into its fifth democratically elected Government, Medical Protection believes that now is the time to introduce solutions that tackle the rising cost of clinical negligence, which affects both patients and healthcare professionals.

Each year, the state is diverting a significant amount of funding away from frontline patient care towards claims. Estimated payouts for clinical negligence claims by the state have grown at an average rate of 45% since 2012/13, with the value of claims climbing to R1.2billion.

These are also challenging times for Medical Protection members. As a responsible not-for-profit organisation, we have an obligation to ensure that we collect sufficient subscription income to meet the expected future costs of claims against members, so we can be in a position to defend their interests long into the future. For that reason, we have had to reflect the rising costs of clinical negligence in membership subscription fees.

Practising in a litigious society is also having a negative impact on the health and wellbeing of healthcare professionals. In a Medical Protection survey, over 80% of members said they think patients are more likely to complain compared to five years ago, and almost one third are often or constantly concerned about the possibility of receiving a complaint. Forty per cent of members either agree or strongly agree that they have increased stress, anxiety and fear of being sued.

To illustrate the magnitude of the problem, the number of dental claims received by Medical Protection rose by 61% between 2009 and 2018, and the highest value of a current medical claim is estimated to be more than R70million.

We saw an increase of 53% in the number of obstetrics and gynaecology claims between 2009 and 2018. The number of spinal surgery claims reported increased with an average of 11% per year since 2009. This is a 300% increase in the number of claims over the course of nine years.

We know that the Government has acknowledged these problems, and welcome the commitment in the ANC 2019 party manifesto to address them through the development of a “comprehensive policy and legislative framework to mitigate the risks related to medical litigation”.

Medical Protection is excited about a new opportunity to make real progress in this area and we are hopeful that change is on the horizon. As an expert in this field, Medical Protection is determined to help the Government deliver this change.

We recognise progress has been made to help address the issue of escalating clinical negligence claims against the state, such as the introduction of amendments to the State Liability Act. The proposed changes to the Act seek to “provide for structured settlements for the satisfaction of claims against the state as a result of wrongful medical treatment of persons by servants of the state”. This would have an impact on patients who claim from the state for clinical negligence in terms of the type of award that they will receive.

While this measure, if implemented, would be a positive step in trying to tackle the costs associated with clinical negligence, it will not completely solve the root cause of the problem. Medical Protection would like to see the implementation of legal reforms that would have a much bigger impact on reducing costs to the state and for healthcare professionals who pay for their own indemnity.

Because of our expertise and experience in this area, and longevity in the market, we are well placed to make recommendations that could help address some of the factors contributing to the current claims environment. This would help prevent adverse incidents and claims, and also allow for better management of the cost of claims when they occur.

Here is a summary of the important reforms we are calling for:

  • Improve legal procedures
    • The introduction of a Certificate of Merit to reduce the number of claims without merit being brought.

    • The introduction of financial penalties to discourage the prolonged pursuit and continued defence of claims without merit by attorneys. Such financial penalties could be awarded against the attorneys who bring the claim, rather than the patient.

    • The introduction of factual witness statements that will give both parties the opportunity to review each other’s factual evidence at an early stage, in order to more accurately assess the legitimacy of their respective cases and limit the issues that are being disputed.

       

  • Reform how damages are calculated and paid out

    • The establishment of an independent review body to define a care package that provides an appropriate standard of care for all patients with a particular injury, regardless of the cause, and set an ultimate limit.

    • Placing a limit on future earnings and earning capacity to lower the cost in the system and to introduce greater parity in the size of awards plaintiffs receive. There is a significant issue of fairness here. In many cases, the costs associated with an expensive clinical negligence system are felt by society. Yet some plaintiffs receive significantly higher special damages awards than others – purely because they are very high earners, or because they are able to persuade a judge that they might have been a high earner in the future.

       

  • Tackle disproportionate legal costs

  • The introduction of a fixed recoverable costs scheme, or tariff for clinical negligence claims, as this approach will help tackle disproportionate legal costs.

  • A review of contingency fees. The principles as set out in the Contingency Fees Act 66 of 1997 are outdated and should be reviewed.

It goes without saying that there must be a clear focus on improving patient safety and the reliability of healthcare, and Medical Protection is a frontrunner in this area. We provide risk management and educational support to members. However, this alone is unlikely to address the problem of rising clinical negligence costs.

The clinical negligence environment should be addressed on the basis of a three-pronged approach. Legal reform is just one part of the puzzle. We must also increase our understanding of the reasons for and drivers behind clinical negligence claims, and improve patient safety and the quality and reliability of care delivery, to prevent error.

While we recognise the importance of patients having access to reasonable compensation following a clinical incident, this must also be balanced against society’s ability to pay. If the balance tips too far, the risk is that the cost becomes unsustainable. There needs to be a balance between what is reasonable and affordable, and we look forward to working with the Government in creating a system that is fair for both patients and doctors.

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