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The Polish Hospital Federation2013 Annual Conference

Mark Riley-Pitt

R K Harrison Insurance Brokers, London

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Insurance & Healthcare by:Mark Riley-Pitt, R K Harrison Insurance Brokers, London

• Commonality of no-fault clinical compensation schemes, globally

• Lessons learned within England over the last 3 years – the NHS

• Insurance – what to expect

• Reporting clinical incidents creating a circle of improvement

• What we do

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Choice of Model:

There are common elements to no-fault schemes in various countries, however, the inclusion of certain elements reflect particular historical, socio-cultural, institutional and legal trajectories that may not easily translate into a new/modern scheme.

The existence of well-funded and comprehensive national social security system, as well as a predominantly publicly-funded health system, appears to be an important element, which contributes to the success of no-fault schemes.

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Costs and Affordability:

Generally administration costs associated with no-fault schemes are lower than the costs of clinical negligence claims brought under tort-based systems. Affordability of existing no-fault schemes over time remains an issue. This may in turn adversely affect the provision of adequate compensation for injured patients.

European Cross Boarder Health Directive and European Human Right Acts will play a part.

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Independent Patient Complaints Process:

In countries with no-fault there is variability as to the role and functions of the patients complaints process and its relationship with no-fault schemes. In New Zealand, the establishment of an independent patient complaints process through the Health and Disability Commissioner (HDC) and the creation of a Code of Rights have a role, dealing with a range of concerns patients had, which are not appropriate to be dealt with through no-fault schemes, redress is not always about money.

The HDC is independent, dealing with patient complaints, which includes advocacy, mediation between patients and health practitioners, investigations and referrals for professional disciplinary actions.

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Access to Justice:

Differing viewpoints exist about whether no-fault schemes encourage a greater number of claims, than would otherwise be the case under tort-based systems.  The available evidence from New Zealand shows there is significant under-claiming by those who would potentially be eligible. Injured patients from ethnic minorities, those who are socio-economically disadvantaged and the elderly are the groups that are least likely to make a claim, despite eligibility.

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Threshold Criteria:

One of the positive aspects of no-fault schemes is the removal of the requirement to prove sub-standard care in relation to medical injury. This is also said to facilitate greater access to justice, for those who have suffered medical injury. A review of existing schemes reveals a more complex picture. Eligibility criteria and the need to establish causation are elements that can screen out a significant proportion of potential claims under no-fault: for example, only 33% of claims on average are accepted for cover under the scheme in Finland; in New Zealand, the figure is 60%, under what is generally viewed as broad eligibility criteria.

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Professional Accountability:

How to facilitate professional accountability, in the context of no-fault schemes is a recurring theme. The available evidence points to professional accountability being an important objective for injured patients. Existing schemes reveal a varied approach to the issue. In the Nordic schemes, the issue of professional accountability is considered to be entirely separate from the operation of no-fault schemes.  In New Zealand, the retention of a fault-based element under the no-fault scheme (in relation to injuries arising out of medical treatment) and the requirement that there be referral to professional disciplinary bodies in the event of an adverse finding, created a significant degree of hostility on the part of the medical profession and became counterproductive. Recent reforms have removed the fault-based element and the focus is now on facilitating good relations with the medical profession, as well as enhancing quality and safety in health care.

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Medical Error and Patient Safety:

One advantage of no-fault schemes is the removal of a fault-based approach, this offers the opportunity to collect valuable data on medical error, as well as to engage in learning to facilitate error prevention and therefore enhance patient safety.  While there is potential for this to be realised in the context of no-fault schemes, the available evidence from the NZ suggests that this does not always follow. NZ experiences rates of (preventable) adverse events are similar to those in Australia and the United States, which maintain tort-based systems for claims.  

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Lessons learned in England over the last 3 years:

• Approximately 95% of healthcare is State funded – the NHS

• NHS organisations belong to a Government risk pool, which pays patients claims for compensation

• A risk pool collects financial contributions from its members, these are calculated based upon the value of claims to be paid, on that members behalf, during that year

• What the risk pool collects yearly, should equal what they pay to patients – this has not happened, the risk pool has out-standing liabilities of £18.6 Billion, set to increase this summer to £21 Billion (approx)

• UK has some of the highest compensations payments/awards in Europe

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Contributing Factors:

• Society has become more litigious

• Patients expectations are higher

• Recession – people make claims who might not normally claim

• Legal fees account for between 30% - 50% of a compensation payment

• Settlement values are increasing (due to increase in long term care costs and life expectancy)

• Risk management has proven to be ineffective and costly

• Regulators experienced difficulties, that may have compounded the problem

• Delays in settling claims, has meant each year the value increases by approx 10%

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What is changing?

• Changes to legislation, to limit legal fees for low value claims

• The Francis report (earlier this year) made 290 recommendations – focused on patient safety, areas such as patient dignity, respect, nutrition, hydration, compassion and humanity are key – the basics

• Introducing a fast track compensation scheme, for claims not in dispute

• Duty of candour with patients, with potential new legislation to enforce this approach

• Government changed legislation (April 2013) to make it easier for NHS Hospitals to buy insurance, rather than stay in the risk pool – a significant change

• Our company (R K Harrison), leading a consortium of 12 others, provide the only commercial alternative for the NHS

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What to expect from insurance?• A premium that reflects your risk profile and claims history

• Supportive and proactive risk and claims management – which feeds into a process, allowing a Hospital to learn from incidents/mistakes, improving patient safety

• Ability to undertake analysis of your claims data, maximizing learning opportunities and high lighting trends/emerging risks

• Claims not in dispute, quick and equitable settlement, which benefits the patients and protects the brand and reputation of the Hospital and clinicians

• Insurers can discount premiums, if a Hospital elects to take financial risk i.e. a policy excess – this creates an alignment of interest between Hospital and insurer

• Insurers undertake visit Hospitals, this benefits the Hospital, as it may dispel preconceptions, while offering the Hospital the opportunity to demonstrate risk management and governance procedures

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Managing complaints and claims, learning from incidents and reducing harm

• Experience indicates that adverse clinical incidents that are reported early, lead to better managed complaints and earlier redress – ultimately costing less in compensation/litigation

• Openness is needed when managing complaints, a poorly managed complaint can develop into a claim, even if the claim is not valid, it will still take time and cost money to resolve

• Openness of clinicians explaining something went wrong, can prove an effective way of managing a situation, reducing the likelihood of a claim – patients just want to be heard and know lessons are being learned

• Effective governance is required, to ensure lessons are learned and imbedded when errors occur – creating effective mitigation strategies

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How should it work?

This is what we offer our clients – this is what you need your local insurance brokers to develop and champion? We offer an insurance product with fully integrated clinical risk and claims management – the sole purpose of this is to achieve:

Reduced incidents of harm = reduced corrective procedures

= releases money for patient care and investment in risk management/safety= reduced complaints = reduced claims = reduced costs/insurance premiums

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Thank You