MDU

1. Risk – The MDU experience
Dr Judith Clark
Clinical Risk Manager

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 UK health care system and indemnity
 Trends in UK claims
 How do we mitigate risk
 Do risk reduction strategies work
 Trust in the UK
 The impact of the discount rate change
Overview

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 Patient care provided for
“free”
 Medical staff indemnified by
the NHS Litigation Authority
UK Health Care system - NHS Hospitals

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 Patient care provided for a fee
 Medical staff require their own
indemnity – often through
MDOs
UK Health Care System - Private practice

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 Provide NHS primary care for
patients
 No cost to patient
 Self-employed GPs
 Medical staff require their own
indemnity – often through MDOs
UK Health Care System – General Practitioners

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 Not favourable
 Year on Year increases in GMC complaints
 Unsustainable increases in medical negligence payments
 Claims inflation continues to outstripping other forms of inflation
The UK Medico-Legal Environment

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0
20
40
60
80
100
120
140
160
180
200
1990 1995 2000 2005 2010
1990 = 100
2010 = 181
2000 = 134
Retail Prices (1990 – 2010)
(Wright, 2011)

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0
50
100
150
200
250
1990 1995 2000 2005 2010
1990 = 100
2010 = 221
2000 = 156
Wages (1990 – 2010)
(Wright, 2011)

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House Prices (1990 – 2010)
(Wright, 2011)
0
50
100
150
200
250
300
350
400
1990 1995 2000 2005 2010
2010 = 297
2000 = 149
1990 = 100

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Claims inflation 1990 - 2014
0
100
200
300
400
500
600
1990 1995 2000 2005 2010
Prices
Wages
House Prices

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The Longer Term View (1885 – 2010)
(Wright, 2011)

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 Frequency and size of claims brought against our members
 Impact this has on membership subscriptions
 Impact on members – time, trauma, opportunity cost
 Impact on the public –
– Could deter doctors from higher risk, higher cost activities within specialty eg GP “out of
hours” work
– Could deter doctors from entering specialties where indemnity costs are
disproportionately high relative to income, like general practice
Concern

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 Clinical Risk
 Indemnity Risk
Why are claims increasing?

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 The MDU successfully defended approximately 80% of medical claims in
the 5-year period from 2010 to 2014
 Usually the claim does not withstand detailed expert scrutiny
 But this comes with substantial costs
Most claims do not succeed

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 Deteriorating claims environment does not reflect a deterioration in
professional standards
 Medicine and medical science has improved and we are seeing better
outcomes but patient expectations have also increased
 Improving standards of care redefine success upwards. If a doctor can do
more, faster, there is more it can be said he/she didn’t do fast enough
 We have an environment and a system that promotes litigation over
resolving concerns through other routes
No deterioration in clinical standards

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 It has been noted that clinical error is not strongly associated with claims –
headache is a good example in primary care
– GP may see a patient with headache
• No sinister features on history
• Normal neurological examination and no papilloedema
– Patient is later found to have a brain tumour, has surgery but suffers permanent neurological
impairment
– A claim may be brought alleging failure to diagnose early – damages (future cost of care and
lost earnings) could be substantial
 It is the nature of general practice that serious conditions can have common, non-
specific presentations
Often no error – but a common presentation could be a
serious condition

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 Investment in risk management and advice includes:
• Communications skills workshops
• Risk Management workshops
• Complaints management training
• Online assessments and self audits
• Online learning
• Practice risk audits and support
• Publications, case studies and lectures
• Open disclosure and apologies
• Targeted advice e.g. Out of Hours
MDOs’ risk management initiatives and advice to
members in England

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 There is not a strong correlation between adverse outcomes and claims and complaints
• Only a small proportion of adverse outcomes result in a patient bringing a complaint
or claim e.g. Goldsmith et al
“Do clinical incidents, complaints and medico-legal claims overlap?” International
Journal of Health Care Quality Assurance Vol 28. No 8. 2015 pp854-871
• Most claims and complaints are not upheld
 Goldsmith:
• “It may be considered that a perfect system with no errors would consequently have no complaints or medico-legal
activity. In this hypothetical situation, this may be true. But our results suggest that even if we were in a low error
system, there would still be considerable complaints and claims”.
Link between adverse outcomes and complaints and
claims

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Car Insurance
Mortality,
Morbidity and
Accidents
Safer Roads and
Cars
Motor Claims
Premium

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Car Insurance
Mortality,
Morbidity and
Accidents
Safer Roads and
Cars
Motor Claims
Premium

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Healthcare Improvement
Adverse
Outcomes
Effective and
Safe Healthcare
Complaints and
Claims
Subscription/
Premium

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Healthcare Improvement
Adverse
Outcomes
Effective and
Safe Healthcare
Complaints and
Claims
Subscription/
Premium

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The Clinical Negligence Triangle
(Campbell, 2012)
Information
Effective Healthcare
Legal Environment
Spark

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Studdert’s theory
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.. . . . . . . . . . . .... . .. . . . . . . .. .... . .. . . . . . . . . . ... . .. . .. . . . . .. .
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.. . . . . . . . . . . .. . . . . . . ... .. . . . ... . . . .. . .. . . . . . ... . . . .. . . . . . . ... . . . .

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 “The NHS Litigation Authority will radically change its focus from simply
defending NHS litigation claims to the early settlement of cases, learning
from what goes wrong and the prevention of errors. As part of those
changes, it will change its name to NHS Resolution.”
 “Delivering fair resolution and learning from harm”
 Reduction in legal costs by resolving disputes and keeping cases out of
formal court proceedings
 Provide intelligence and deliver safety interventions to drive improvement
NHS Resolution – Trust?

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 Aiming for reduction in “frustration” claims, reduction in litigation in courts
and increased resolution by mediation
 Claim management will not change, including robust defence of claims
 Challenging over-charging by claimant lawyers, fighting fraud & excessive
compensation claims
NHS resolution – Trust?

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 The discount rate was last set in 2001 at 2.5%
 This was based on a three year average of real yields on Index Linked Gilts
- since 2001, the real yields on Index Linked Gilts has fallen
 New rate based on a three year average of real returns on Index Linked
Gilts - at minus 0.75%
Discount rate – February 2017

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 “There will clearly be significant implications across the public and private
sector. The Government has committed to ensuring that the NHS Litigation
Authority has appropriate funding to cover changes to hospitals' clinical
negligence costs. The Department of Health will also work closely with
General Practitioners (GPs) and Medical Defence Organisations to ensure
that appropriate funding is available to meet additional costs to GPs,
recognising the crucial role they play in the delivery of NHS care.”
Lord Chancellor’s comments

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 “Cutting the discount rate to -0.75% from 2.5% is a crazy decision by Liz
Truss. Claims costs will soar, making it inevitable that there will be an
increase in motor and liability premiums for millions of drivers and
businesses across the UK. We estimate that up to 36 million individual and
business motor insurance policies could be affected in order to over-
compensate a few thousand claimants a year.
ABI reaction to discount rate change

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 “We are very disappointed by Liz Truss’s decision to lower the discount rate.
We are considering the impact of this decision on our subscriptions and
working with the Department of Health and NHS England to find a solution
to protect our GP members from the otherwise catastrophic impact this will
have on them, the sustainability of general practice and on the public.”
 Claims inflation continues
– “Whatever measures are put in place, the fundamental problem of spiralling claims
costs remains for the NHS with all the adverse effects this has on the delivery of
healthcare. We need a long-term solution to the inflation-busting rises we are seeing in
clinical negligence compensation payments. Personal injury law needs root and branch
reform.”
MDU reaction to discount rate change

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 Case 1: age at settlement 42yrs with 17 years life expectancy
£7.45m @ 2.5% to £10.82m @ -0.75%. An increase of £3.37m (45%).
 Case 2: age at settlement 14yrs with 50 years life expectancy
£8.4m award @ 2.5% to £17.5m @ -0.75%. An increase of £9.1m (108%).
 Case 3: age at settlement 8yrs with 46 years life expectancy
£9.85m @ 2.5% to £15.65m @ -0.75%. An increase of £5.8m (59%).
Impact on MDU members – case examples

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 The link between more effective/safe healthcare and claims outcomes is
tenuous.
 Little evidence to suggest that improving/safer healthcare reduces claims.
 May be able to show link in cases where there is a gross change in the
medical landscape. (e.g. eradication of a disease or illness)
 Main factors driving litigation and premiums do not relate to patient safety
nor healthcare improvement.
Conclusions

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Medico-legal team
t 0800 716 646
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Website
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@the_mdu

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Limited (MDU). MDU is not an insurance company. The benefits of MDU membership are all discretionary and are subject to the Memorandum and Articles of Association.
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