Soaring medical malpractice claims
Soaring Medical Malpractice Claims Demand Statutory Intervention (Article supplied by AON insurance)
Medical malpractice claims in South Africa are soaring as South Africa becomes an increasingly litigious society as awareness of rights grows under the Consumer Protection Act (CPA), as well as a growing number of legal professionals who are heavily marketing medical malpractice litigation services.
The bulk of medical malpractice claims arise from orthopaedics, neurology and obstetrics/gynaecology. Since 2009, claims in excess of R5million have increased by 900% and on average, one in every five claims are in excess of R1million, representing a 550% increase in the last decade. A few landmark claims have topped the R25million mark. The Gauteng health department alone is facing negligence claims amounting to R1.28-billion for the 2012/2013 financial year.
“A contributing factor to the higher awards of many of these claims is the fact that many relate to children/infants where the repercussions and damages suffered are long-term. The need for professional indemnity (PI) insurance for private medical practitioners has never been greater, not only to protect the medical professional, but also patients in the event that something does go wrong,” explains Malcolm Padayachee , Manager of Professional Risks at Aon South Africa, a leading risk advisory and insurance brokerage.
“However, herein lies the double-edged sword whereby certain classes of medical specialists, notably in obstetrics, are fast becoming uninsurable due to the high number of claims and settlements, leaving a huge percentage of practitioners either unwilling or unable to pay the high premiums for their PI cover, and commercial insurers declining to take on the higher risk. In fact a number of local commercial insurers have withdrawn entirely from the PI market based on a reduced appetite for the growing risk in the medical malpractice space,” adds Malcolm.
PI insurance essentially provides the named insured in the policy with indemnity in respect of legal liability arising out of the practice of their profession. Indemnity cover will include the professional’s own legal costs, as well as any compensation and legal costs that are due to the claimant up to the limit of indemnity of the policy, providing all parties with peace of mind and financial protection in the event of a malpractice claim. A medical practitioner without PI protection would be personally liable for these costs and would run the risk of having all their assets attached, facing financial ruin, and leaving their patients financially uncompensated.
“The problem of patient vulnerability is further exacerbated by the fact that South Africa currently has no legislation that makes it compulsory for medical professionals to take out PI cover. Although there were moves afoot in 2010/11 to make PI cover a statutory requirement by the end of 2012, this has not materialised. With an average annual premium cost of between R220 000 to R250 000 for a maximum of R30million liability cover adding to the running costs of an already cost-intensive medical practice for certain specialists, current estimates are that between 30-40% of medical specialists are practicing without cover. This means they are operating at high risk, and more importantly, leaving their patients exposed in the event that they suffer a loss as a result of negligence on the part of the doctor,” he warns. “It would be remiss to think that cases of malpractice only occur in the ailing public healthcare system where skills and resources are severely curtailed. Medical negligence also happens in private practice and while it is obviously not as rampant, it is nevertheless a reality,” he says.
Growing concerns about legal liability and the cost of PI cover are also having a negative impact on much needed specialist medical skills in South Africa, and consumers are going to end up carrying the brunt of it. Firstly, the fear of litigation is seeing some doctors calling for more tests, many of them unnecessary, out of concerns of being sued, and in turn driving up costs. Some specialist areas such as obstetrics, trauma, plastics, spinal/orthopedic and even pediatrics are also experiencing skills shortages as graduates choose not to specialise in fields that are seen to have high levels of litigation and risk. The Consumer Protection Act has also brought additional liability for doctors, including the fact that doctors can even be sued for faulty equipment which they have no control over – the CPA essentially means that a patient can institute a claim against anyone in the supply chain, including the doctor, and not just the manufacturer of the faulty equipment.
While there are no comprehensive long terms statistics in SA on malpractice, stats out of the US show that only about 5% of claims ended up in court, and of these doctors won in 90% of the cases. This would suggest that a very high number of frivolous claims are filed based on the hopes of high payouts in successful claims – and South Africa seems to be following suit. It appears that medical professionals have a lot to be concerned about with more consumers suing simply because they can.
“It’s a lose-lose situation for all concerned. Aon’s view is that a statutory solution is urgently needed whereby government caps the limit of liability to an injured party to a certain level, as it has been done in the US and various European countries and in fact, this is exactly what was done with the South African Road Accident Fund. This will ensure that PI cover for medical practitioners remains sustainable and affordable, and that consumers are protected financially in the event of a successful malpractice claim. Ultimately, if the current situation persists the consumer stands the most to lose as the number of medical professionals will dwindle, consultation costs will increase dramatically as a result, and where a claimant has a legitimate malpractice claim, they could walk away without any compensation or a dramatically reduced settlement if their doctor has no PI cover in place,” concludes Malcolm.