Medical malpractice cover, a type of liability insurance, is something Shivani touched on in this week’s lecture and a nice link between medical schemes and next week’s topic of general insurance.
Professional indemnity covers the insured for any compensation owing to a third-party as a result of negligence in the provision of a service. In the case of medical malpractice, this cover may include any legal expenses incurred in defending allegations as well as cover for both medical equipment and medicines prescribed.
An article in the most recent issue of Personal Finance highlights the current rise of medical malpractice claims and cites increasing awareness of rights through the CPA; better litigation; tighter economic times where people are more inclined to “look for money” and global trends as possible reasons for the increase. It is not only the frequency of claims that is increasing but also the size of claims as a result of growing medical costs and inflation.
In 2013, South Africa saw the highest payout to date of R 25 million for medical malpractice and with all professionals at risk of making a mistake at some point in their career, it is easy to see why so many medical practitioners consider professional indemnity to be essential.
This article, “High insurance costs scaring off specialists”, speaks of the effect that rising insurance premiums is having on the specialities that upcoming doctors are choosing to pursue as well as existing doctors’ abilities to continue working in the private sector.
While doctors are struggling to afford these expensive premiums, it would seem that the insurance companies who are taking on these high risks cannot afford to charge any less – given the context of the increasing frequency and size of medical malpractice claims.
An article by Aon South Africa argues that at the end of the day consumers are going to be most hit by the severity of this situation. Currently, some doctors will admit to ordering more tests than necessary for their patients with the sole purpose of limiting their liability should anything go wrong. This results in additional costs to the patient and while increasing indemnity premiums push upcoming doctors out of the high-risk specialities, consultations in these fields are also becoming more and more expensive.
The article goes on to suggest the only way to make this form of liability insurance both sustainable for the providers and affordable for practitioners is in the introduction of legislation which limits the amount that an injured party can claim.
Can anyone see alternative solutions to this problem? Should insurers be trying harder to find other ways to pass on the high risk faced in covering medical malpractice or should other parties be taking the brunt of this situation?