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Managing the Medical Malpractice Litigation Crush

By Donald Dinnie, Group CEO — Natmed Group

Readers will have read of the enormous pressure placed on both the public and private healthcare sectors by an ever increasing number of medical malpractice claims and quantum of awards or settlements of those claims.

The contingent liability of the Provincial Health Departments for medical malpractice claims is astounding, running into billions of Rands. In the private sector doctors and hospitals are seeing increasing court awards and settlement amounts drive up the costs of obtaining medical malpractice insurance. That all goes, directly and indirectly, to affect medical service delivery negatively. In dealing with and resolving medical malpractice claims and all the costs involved that means less money from under pressure Provincial Health budgets for medical care and treatment of patients, with negative consequences for service delivery. The large number and quantum of malpractice claims in the State sector will also significantly undermine the viability of the NHI. In the private sector an increasingly litigious patient base and the costs of medical malpractice insurance are driving some doctors out of what is seen as high-risk specialities or discouraging newly qualified doctors from entering those specialities. Once again negatively affecting medical service delivery.

An immediate reaction to the dilemma is, well don’t be negligent and there will be no claims. No medical practitioner or facility sets out to deliver negligent treatment. There is of course much to be said for improved risk and clinical controls, including record keeping and retention, and continuing professional education. The primary focus of any healthcare provider, State or private should be to provide quality care. A lot of time and effort, and money, is spent on risk control and standards of care. In both sectors.

It is not the intention of this series of notes to consider methods for improving the quality of care to patients. Or why that ongoing focus is not always successful. That is best left to the clinicians. There is also the reality that whatever resources are spent on improving the level of services mistakes do unfortunately occur and with an increasing population medical malpractice claims will not disappear. It is also useful to temper any indignation by remembering that thousands of successful medical procedures and interventions occur every day and negligent negative outcomes arise in a very small percentage of cases (unacceptable as that may be).

This series looks at possible legal responses to the growth in medical malpractice litigation and the significant increase in the quantum of awards or settlements over the past few years.

In this first note in the series let’s consider the collateral source rule in our law.

This rule prevents any court in making an award from taking into account when calculating the quantum of damages to be awarded benefits by the claimant from independent sources such as statutory insurance payments received or workmans compensation.

The Assessment of Damages Act provides that in any claim for loss of support as a result of a persons death no insurance money, pension or benefit payable by a friendly society or trade union may be taken into account when determining damages payable.

Payment of medical expenses by a plaintiff’s medical aid is usually viewed as a form of voluntary private indemnity insurance and not deducted for the damages.

The general approach has been that the defendant should not benefit from the plaintiff’s foresight and industry (and cost) of insuring privately.

Hasn’t the time come to review this approach and amend the law? Legislative intervention would be required to take into account collateral benefits received in awarding damages in these circumstances. Can society bear the costs (because that is where the costs ultimately fall) of not doing so and a claimant in a sense being over compensated.

Take for example medical aid payments.

A damages award will deal with both past and future medical and hospital expenses. A claimant who is a medical aid member will most likely have received an indemnity if not for all, for some of those past medical expenses and will get the benefit of indemnities for the costs of future treatment if they remain a member. Yet the damages awarded also allows for the costs of that treatment.

It would be fairer to allow the court to enquire regarding those payments and make an appropriate deduction. Fairness may require the defendant to pay or contribute to the ongoing costs of the medical aid membership particularly if a premium is charged because of the condition now suffered by the claimant and negligently caused by the practitioner. Of course, any gap in cover under the medical aid would form part of the damages awarded.

An alternative may be to not reduce the damages awarded to the claimant but at least allow a recoupment of that component of the damages by the defendant from the third party source of that collateral benefit. That would require the defendant in a claim at least to obtain in the discovery process all necessary information relevant to any collateral benefits the claimant may have, or will receive, so as to enable it to exercise such rights of recovery.

Many medical aid rules do require a member to disclose details of damage awarded to a member for any injuries suffered and a consequent reduction in the benefits paid in that regard or for recovery of benefits already paid in that regard. Those disclosures are not always made with the consequence that the relevant risk pool bears the costs of that double compensation. The time may have come to require the legal representatives to the medical malpractice litigation to determine any collateral source benefits a claimant receives in respect of the damages awarded and to notify that source of the damages awarded relevant to its benefit provided to allow that source to proceed with a recovery should it wish to do so.

Sober reflection of what is fair, and what costs, direct and indirect, society can continue to bear when dealing with these claims does I think, necessitate a serious and hard look at appropriate legislative intervention.

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