Chapter 10 - Litigation and obstetric practice and provision
Introduction
10.1
The Inquiry’s terms of
reference did not directly raise the issue of litigation and its effect on
obstetric practice in Australia. Nonetheless, many practitioners and other witnesses raised
concerns about the impact of litigation on birthing service practice and
provision. Due to the frequency with which the issue was raised and its marked
impact on practice and provision of services the Committee has included this
discussion of litigation issues in its Report. Aspects of litigation are also
discussed in chapters 2, 5 and 7 of the Report.
10.2
The alleged effects of
litigation include:
-
both obstetrician/gynaecologist specialists and
GPs leaving obstetric practice because of the level of medical indemnity
premiums;
-
obstetrician/gynaecologist specialists and
general practitioners leaving obstetrics because of fear of litigation;
-
an aggravation of an already existing shortage
of rural birthing service providers; and
-
the practice of so-called ‘defensive medicine’,
particularly in relation to the performance of Caesarean section but also in
relation to other procedures such as ultrasound screening.
10.3
All these issues were discussed
in some depth in the Final Report of the Professional Indemnity Review (PIR) in
1995, which concluded a four and a half year review of compensation and
professional indemnity arrangements for health care professionals in Australia.[420] Many of the conclusions of the PIR
were supported 18 months later by the conclusions of the Victorian Law Reform
Committee.[421] Both these reviews
arose partly out of the same concerns as those expressed to this Committee. For
example, the Victorian Committee’s Chairman’s Forward stated that the inquiry:
arose out of Government concern that the increasing cost of
professional indemnity insurance could affect access to medical services,
particularly in provincial and rural Victoria.[422]
Publicly available data on litigation
10.4
Unfortunately, the Committee
faced many of the same barriers as the PIR did in trying to assess the validity
of most of these assertions. There is still no publicly available national data
on the frequency, cost (including payouts and legal fees) and causes of medical
negligence litigation in Australia.
As an urgent starting point to a truly informed debate on these important
issues, the Committee supports recommendation 9 of the PIR which proposed:
the establishment of a national minimum data set for health care
negligence cases, which includes sufficient details to allow the data to be
used to examine trends in particular specialties and diagnostic areas, and to
detect areas likely to be able to benefit from the intervention of active
prevention strategies. The contributors to the data base should be all MDOs,
any insurers providing health care professional indemnity cover either to
individual practitioners or facilities, and all State governments and private
sector self-insurers.[423]
10.5
Without such information no
sensible decisions can be made about the increase in litigation, sometimes referred
to as a ‘litigation affliction,’ said to be adversely affecting birthing
services in Australia may well be inappropriate. There are also no other readily
accessible public sources of data on medical litigation. The courts generally
do not keep separate statistics for medical litigation, though the period since
the conclusion of the PIR has seen the establishment of a separate ‘medical
list’ in the County Court of Victoria in January 1998. While the list also
includes litigation against related professionals, such as chiropractors,
dentists and veterinarians, it provides some limited information.[424] The head of the list reported at a
Workshop of the Royal Australasian College of Surgeons in October last year that:
At the commencement of the list there were 300 matters on it and
some 10 months later there were just under 430. Five to ten cases were being
resolved per month.[425]
10.6
While the data is relatively
limited, being from one court in one state only, it provides some support for
the assertion that overall an increasing number of cases are being brought
against doctors, though the number of cases remains relatively low.
Data on litigation from Medical
Defence Organisations
10.7
Although there have been some
limited inroads by private insurers in low risk areas of the medical
profession, medical defence organisations (MDOs) still provide the vast
majority of professional indemnity cover for medical practitioners in
Australia. Their operations are described briefly below.
10.8
Despite requests from the
Committee, MDOs were unwilling to provide data on the frequency, cost and
causes of litigation against both specialist obstetrician/gynaecologists and
general practitioners providing obstetric services.
10.9
Even their own members have
been unsuccessful in gaining access to this information. Following a recent
‘call’ on their members by some MDOs, a meeting was held between the AMA and
the MDOs in Melbourne on 27 November 1999. At this
meeting options to gather nationally aggregated, deidentified data were once
again raised with the MDOs, with the options of collection by the Australian
Bureau of Statistics and the Australian Institute of Health and Welfare being
raised. The AMA is still pursuing this national option.
10.10
The urgency of the issue has
surfaced recently with at least two of the MDOs, MIPS and MDAV, making ‘calls’
on their members to address chronic underfunding of their ‘incurred but not
reported’ (IBNR) liabilities. For obstetricians/gynaecologists in MIPS, this
call means their contribution this year will be $54,000 (double their annual
contribution of $27,000 for 1999/2000) though the MDOs are allowing members
experiencing difficulty in meeting the call to contribute over a 4 year period
to lessen its immediate impact. There is a requirement for a practitioner to
pay at least 20% of the call this year. This would make the amount payable this
year to MIPS for a specialist obstetrician/gynaecologist up to $32,400, which
is still below the NSW United Medical Protection (UMP) contribution of $41,400.
10.11
Even at these levels, specialist
obstetricians/gynaecologists are rightly concerned that contribution levels may
continue to rise. For example, UMP were reported as claiming that their $41,400
contribution still involves significant cross subsidisation with other parts of
the medical profession. Without this cross-subsidisation, UMP has claimed that
these contributions would be over $60,000. Without better data, publicly
available and available to their members, the accuracy or otherwise of these
estimates is impossible to judge.
Obstetrician/gynaecologist concerns
about data
10.12
Obstetricians/gynaecologists
have themselves expressed scepticism about the accuracy of subscription
estimates, which are made without reference to publicly available data. They
base their concerns upon their recent experiences in NSW. NSW specialist
obstetrician/gynaecologists campaigned late last year to get the liability for
negligence actions relating to public patient births covered by the NSW
Government’s professional indemnity arrangements, rather their own private MDO
coverage. They claim that they had been led to believe that this would result
in a decrease in contributions.[426]
10.13
However, following the
obstetricians/gynaecologists successful campaign, the principal MDO in NSW
(UMP) further increased its subscription rate for specialist obstetricians.
This resulted in significant anger in the specialty group. The UMP claimed that if the specialists’
campaign had not been successful, fully funded contributions would have
exceeded $90,000. Without publicly available data and open member scrutiny,
doctors argue that the validity or otherwise of any of these assertions cannot
be tested and their financial positions are subject to the untested whims of
the relevant MDOs. They also argue that without this information they cannot
properly direct their risk management efforts.
10.14
This is consistent with
concerns raised in the PIR’s Final Report, which showed that, in terms of the
frequency of litigation, the number of cases involving specialist
obstetricians/gynaecologists’, gynaecological business far exceeded the number
of cases involving their obstetric business, in particular, the number of cases
involving so called ‘brain-damaged babies’.
Because of the large cost effects of this very small number of
claims, public discussion on these issues has wrongly linked the frequency of
suit to brain-damaged baby litigation. In fact, 80% of the cases numerically
made against obstetricians and gynaecologists relate to their gynaecological
practice.[427] Almost one quarter of
these claims related to complications following hysterectomy, while the next
two most frequent groups of claims relates to failed sterilisations (18%) and
laparoscopic complications (15%). The next two biggest groups - each around 10%
- related to missed or delayed diagnoses and problems associated with
intra-uterine contraceptive devices. The remainder consisted of a mixed bag of
complications of various operative procedures, accidental sterilisations,
failed terminations, burns, drug errors and retained swabs/instruments.
Of the remaining 20% of cases, relating to their obstetric
practice, slightly less than half related to damage to the mother in the
birthing process, and just over half related to damage to the baby.[428]
10.15
The reverse is true in relation
to the costs of litigation, with the very small number of successful ‘brain
damaged baby’ cases contributing disproportionately to the costs of MDO
premiums, and driving the costs of premiums for those specialists who practice
obstetrics significantly above those who do not in most MDOs. In terms of prevention of the frequency of
litigation, this kind of information is invaluable, but it is not currently
available.
10.16
The Committee understands that
the AMA is currently attempting to obtain access to such data on a national,
anonymous, aggregated basis across all areas of medical practice to enable much
better targetting of preventive risk management effort. The Committee believes
that the current secrecy surrounding the operations of the MDOs is unacceptable
and that the MDOs should be open to public accountability and scrutiny.
Recommendation
The Committee RECOMMENDS that the Australian Institute of
Health and Welfare establish national comprehensive data on medical defence
organisations to cover negligence cases and include such data as premium
payments, number of cases, number of claims, number of out of court
settlements, size of payments and size of fund reserves.
The MDO Industry
10.17
There has been some
consolidation in the medical defence industry since the mid 1990s. At the time
of the PIR there were 10 MDOs operating in Australia.
This is now down to 6:
-
United Medical Protection (UMP), which competes
nationally and has almost all MDO business in NSW and Queensland;
-
the Medical Indemnity Protection Society (MIPS)
which operates in Victoria;
-
the Medical Defence Association of Victoria
(MDAV) which operates in Victoria;
-
the Medical Defence Association of South
Australia (MDASA) which operates in South Australia;
-
the Medical Defence Association of Western Australia (MDAWA) which operates
in Western Australia; and
-
the Medical Protection Society of Tasmania
(MPST) which operates in Tasmania.
10.18
The two large British based
MDOs - the MDU and the Medical Protection Society (MPS) - have essentially
withdrawn from the market. There have been some minor incursions into the
territory of the MDOs by private insurers, but most of the market is still
operating under the traditional MDO discretionary mutual arrangement.
10.19
The distinguishing feature of
the operations of MDOs is that the ‘cover’ of their members is not considered
to be an insurance contract. As such, their discretionary operations are not
regulated by the Insurance and Superannuation Commission and are not licensed
under the Insurance Act 1973. In its
purest form, members of MDOs pay subscriptions and the MDOs exercise their
discretion to pay out on any claim made against a member. The concept of
discretionary cover was explained in the PIR’s Final Report in the following
manner:
Discretionary cover
describes the indemnity cover provided by medical defence organisations (MDOs)
and a small number of other health care professional discretionary mutuals
operating in Australia
at the moment. No contract exists whereby a member is guaranteed payment of
their professional indemnity liabilities, though there appears to be only a few
examples where MDOs have exercised their discretion not to cover an individual
doctor or group of doctors.[429] Recent
statements from one MDO have indicated that they may exercise their discretion
adversely against certain kinds of cases such as negligence cases involving
sexual impropriety.[430] The nature of
this indemnity means the organisations offering it are not insurance companies,
and so they operate outside of the regulatory framework covering insurance.[431]
10.20
Some MDOs now offer a combined
arrangement, where there is a ‘claims-made’ insurance policy with a
discretionary ‘claims-incurred’ supplement. Where these arrangements exist,
MDOs often provide the ‘claims made’ insurance component of their business
under a solely owned subsidiary company which holds an insurance licence (a
so-called ‘captive insurer’). This component of their business is required to
meet the prudential requirements of the Insurance and Superannuation
Commission, but the core discretionary component of their businesses remains
without external regulation.
Some operational principles for
MDOs
10.21
To understand these
arrangements and the most recent ‘crisis’ in the industry, it is helpful to
understand the difference between ‘claims made’ and ‘claims incurred’ cover,
and to understand the concept of ‘incurred but not reported’ (IBNR) claims and
‘run-off cover’.
Claims incurred cover provides
indemnity for any claim which arises from an incident which occurred while the
health care professional is either a member (in the case of an MDO) or has paid
their insurance premium (in the case of an insurer). This variety of cover is
sometimes called occurrence-based
cover, and is the type of cover which applies to the majority of personal
injury insurance in Australia
- that is, employer's liability and third-party motor vehicle personal injury
insurance. It is also the product offered by MDOs in Australia.
IBNR or Incurred But Not
Reported liability arises with claims incurred cover. It refers to those
claims where an incident has already occurred (that is the liability has been
incurred), but the claim has not yet been reported to the risk carrier.
Estimates of these are made using historical claims reporting data.
Claims made cover
provides cover for previously unreported claims made in the year a premium was
paid or membership held. This form of cover is generally provided for economic
loss insurance, such as professional indemnity for financial professionals. It
is also the kind of cover generally offered by insurers and insurance brokers
for health professionals.
Run-off cover arises
with claims made products. When a health professional, who has claims made
professional indemnity cover, stops practising, they need to buy cover for any
new claims which come forward from the period they were in practice. This is
called run-off cover.[432]
10.22
MDOs in Australia
have traditionally provided ‘claims incurred’ cover for doctors. This form of
cover is the most beneficial for both doctors and patients, as it covers them
securely for all future liabilities which arise from any particular year of
coverage. Gaps in coverage can more easily arise with claims made cover, which
is why the PIR recommended that unlimited claims incurred cover provided the
best option for consumers and doctors.[433]
10.23
The practical difficulty with
‘claims incurred’ cover is in estimating the appropriate reserves for the IBNR
liability. In an unregulated market, such as exists in the MDO discretionary
sector, there is also a great temptation to set premiums at a rate which does
not adequately reserve for these contingencies. This is even more likely in a
business like medical negligence cover, where the payment of damages often
occurs a long time after the incident which gives rise to it. For example, at
the time of the work of the PIR, almost 60% of cases were not finalised within
seven years of the occurrence.[434] The
theory is that in the time from when the claim becomes known and the time
payment needs to be made, sufficient additional contributions can be collected
to ensure that the MDO will be able to make the payments.
10.24
This ‘catch up’ played a big
part in the rises in MDO premiums in the late 1980’s and early 1990’s. At that
time, what data was available showed that rather than a recent massive increase
in the number of claims immediately beforehand, there had been a gradual
increase over the previous 15 years, which had, to a large extent, been
unfunded. While claims rose, contribution rates had remained low. In 1989, this
led to several MDOs needing to make calls on their members. ‘Calls’ are where
the MDO seeks an additional amount from all members to ensure its continuing
capacity to exercise its discretion positively and ‘cover’ its members. Most of
their constitutions limit the size of calls to an additional year’s
subscription.
10.25
This has remained a significant
issue throughout the 1990s, with actuarial studies funded by the PIR estimating
that the MDO industry was underfunded to the extent of between $100 and $250
million.[435]
The recent ‘crisis’
10.26
A number of MDOs have recently
made calls on their members and there is speculation that all will be required
to do so. This situation has arisen partly because of the continued shortfall
in IBNR funding and partly for other reasons. In its Fact Sheet for members, the
MIPS gave the following explanation for why they had decided to make the call
at this time:
-
In an increasingly consumerist society, it is
inevitable that litigation rates (and costs) will continue to rise.
-
Legislation has been foreshadowed, in Victoria, which
would require each doctor, as a condition of registration, to provide proof
that he or she is adequately indemnified for professional liabilities.
-
The Australian medical defence organisations
(MDOs) collectively are not fully-funded at the present time - i.e. their total
reserves may be sufficient to fund their known (reported) and accepted
liabilities but are not enough to in addition fund the currently unknown professional liabilities of
their members, those liabilities which will arise from incidents which have
occurred but have not yet been reported. This is despite the very significant
increases in subscriptions over the last decade.
-
The introduction of the GST will affect the
MDOs’ costs of meeting their members’ liabilities.
-
A new accounting standard has been proposed
which would require the MDOs to declare both their known and currently unknown
liabilities in their annual reports. (Currently only the known liabilities must
be taken up into their balance sheets.)[436]
10.27
The Fact Sheet goes on to
acknowledge that the MDO industry operating in Australia has been considerably
underfunded for many years, specifically in relation to IBNR liability. It then
refers to the PIR’s estimates listed above and states that:
There is no published evidence to suggest that this figure has
fallen in recent years...Litigation rates and costs have increased
significantly in recent years, and across the industry it has been difficult to
keep up with the hyperinflation in reported claims, let alone to make adequate
provision for the IBNR liabilities.[437]
10.28
The Fact Sheet provides a
thorough outline of the financial and prudential reasons for the call and
provides transparency about the financial operations of an MDO. While there has
been much media speculation about a new ‘crisis’, the MIPS Fact Sheet makes the
chronic industry-wide nature of the issue very clear. This emerging openness in
the industry is to be supported and encouraged.
10.29
Improved funding of the IBNR
liability also places organisations which adequately reserve for their IBNRs in
a strong competitive position, if and when Governments decide they should be
regulated, as recommended by the PIR. Bodies which do not reserve to meet these
liabilities will be obliged to make calls on their members at that time, and
will not have the advantage of the income-earning potential of the reserves in
the meantime.
10.30
Other MDOs such as UMP argue
that they are collecting additional subscriptions each year to improve their
IBNR funding without having to make a call on their members. The President of
UMP stated that their annual contribution rates now fully fund their
occurrence-based cover each year and includes an additional amount of premium
for the unfunded IBNRs into each year’s premium, with the intention of
‘insuranising’ their business over time.
MDO subscription increases
10.31
It is impossible to tell from
currently available data the relative contributions that different factors have
made to increased MDO contributions, both across the medical profession and
within specialty and practice groups. Some of the factors are a rising rate of
claims, rising claims cost (well above inflation and principally driven by
costs of future care), increased prudential reserving and a reduction in the
internal cross-subsidisation of contribution rates between different groups of
doctors. As was asserted by the PIR, while there is clearly widespread fear of
litigation among medical practitioners, it is not based on any evidence. This
was confirmed by the later work of the Victorian Law Reform Committee which
concluded in 1997 that:
The Committee has found that the perception of the medical
profession concerning recent increases in the cost of professional indemnity
insurance is not reflected in a significant increase in either the quantity of
claims or their quantum. Rather, a number of high profile cases, particularly
in New South Wales, has led to a widespread belief that there is a crisis in
medical negligence litigation when, in fact, there is not. The Committee’s view
is that there is no real crisis in the level of premiums that is impacting on
service delivery, or is likely to impact in the near future. Present premium
levels are not oppressive.[438]
10.32
Equally, it is difficult to be
certain exactly what impacts any of these are having on practice changes, when
all the other influences are looked at as well. For example, there were many
fears expressed to the Victorian Law Reform Committee about the impact of
litigation on rural practice. However, the Law Reform Committee concluded that:
there is evidence of a widespread fear of litigation among
doctors generally. However, there is no evidence of a significant increase in
medical litigation. The shortage of doctors in some areas of practice has not
been shown to be a consequence of any rise in the cost of obtaining
professional indemnity insurance. Rather the Committee has received extensive
evidence to the effect that the shortage of doctors in rural areas, for
example, is due to other social and economic factors.[439]
10.33
What is absolutely clear is
that there has been a rapid rise in professional indemnity contributions in
some states over the past decade. For example, medical indemnity subscriptions
for specialist obstetricians/gynaecologists in NSW have risen from $7,200 in
1990 to $41,400 in 1999. A selection of MDO contribution rates for specialist
obstetrician/gynaecologist and for gynaecologist only practitioners appears in
Table 1 below. As can be seen from Table 2, these increases have also affected
GPs providing obstetric care, which is a particular issue for rural health
care, where a larger proportion of private sector deliveries are provided by
GPs and where GPs may be more likely to be providing public hospital birthing
services as well.
10.34
The Committee is concerned at
the enormous variety between the states and the variations between MDOs even
within states, as illustrated by these tables. Some of the variations may be a
consequence of differences in behaviour so far as litigation is concerned. NSW is claimed by doctors to be the most
litigious state and UMP operates mainly in NSW. However, the litigation
experiences are generally assumed to be similar between NSW and Victoria, because both have
law firms and barristers who specialise in this area. However, there are significant differences in
the costs between UMP and MIPS and MDAV, all of whom operate in Victoria. It also seems that it is
unlikely that all the difference between these states relate to differences in
levels of damages. While some of the
differences between MDOs may relate to different claim profiles and different
IBNR reserving policies as outlined earlier, it is difficult to know exactly
why these differences arise. In all
cases, there is insufficient publicly available data to make any definitive statements
about the reasons for the differentials.
Table 1 : Selected MDO contribution rates
for Obstetrician/Gynaecologist and Gynaecology Only Medical Practitioners
1994/5 to 1999/2000
MDOa |
Contribution Category |
1994/95
$ |
1995/96 $
|
1996/97 $
|
1997/98 $
|
1998/99 $
|
1999/2000 $
|
MIPS |
O/G |
9,900 |
14,000 |
15,000 |
20,000 |
22,000 |
27,000 |
|
G
only |
4,500 |
6,600 |
10,000 |
13,500 |
15,000
|
18,000 |
MDAWA |
O/G
|
25,000 |
25,000
|
27,750 |
29,140 |
30,050 |
32,000 |
|
G
only
|
11,500 |
11,500
|
12,800 |
13,450 |
13,870 |
15,750 |
UMP |
O/G
|
17,900 |
19,500 |
25,000
|
30,000 |
36,000 |
41,400 |
|
G
onlyb |
16,700 |
14,500 |
18,000
|
16,500 |
22,500 |
25,875 |
MDAV |
O/G
|
7,500 |
11,000 |
15,000
|
20,000
|
22,000
|
25,000
|
|
G
only
|
3,400 |
6,500 |
10,000
|
13,500
|
14,850 |
17,500 |
MPST |
O/G
|
4,300 |
5,500 |
6,600
|
7,500
|
9,400 |
11,050 |
|
G
only
|
4,300
|
3,600 |
4,550 |
5,200 |
6,700 |
7,800 |
a The
MDOs are listed in paragraph 10.17.
Table 2 : Selected MDO contribution rates for General Practitioners practising obstetrics
1994/5 to 1999/2000
MDO |
1994/95
$
|
1995/96
$
|
1996/97
$
|
1997/98
$
|
1998/99
$
|
1999/2000
$
|
MIPS
|
2,990 |
5,500
|
7,000 |
7,500
|
8,250 |
9,500 |
MDAWA
|
5,000 |
5,000
|
5,750 |
6,040 |
6,480 |
7,500
|
UMP
|
4,050 |
4,650 |
5,800 |
6,950 |
8,750 |
9,796 |
MDAV
|
2,700 |
5,500
|
7,000
|
7,500
|
8,250
|
9,000 |
MPST
|
2,000 |
2,550 |
2,750 |
2,500 |
3,500 |
4,150 |
Is there a ‘litigation crisis’ in obstetrics?
10.35
In the face of these rises,
some doctors have continued to assert that there is a ‘litigation crisis’. As
was noted earlier, one of the real impediments to any proper analysis of this
issue is the total absence of useful data on the incidence and costs of claims
against medical practitioners, whether they are involved in birthing services
provision or not. The uncertainty and speculation arising from this situation
has changed very little from when the PIR Final Report said, with some
frustration:
Publicly available information is so scarce that counteracting
what could be seen as a fear campaign among health care professionals is very
difficult. When data is sought to back up the public statements, it is
frequently delayed, if it can be found at all. In the case of MDOs, there have
been alleged to be concerns about revealing information to competitors. The
availability of data on such basic things as the number of claims made and the
number of claims where a plaintiff is successful have fostered an environment
of crisis, when the absolute numbers of claims appears to be still very low in Australia.[440]
10.36
The particular reasons for
sharper rises in obstetric related contributions compared to other groups were
outlined in the PIR’s Report and it appears that they have changed little since
then.
The data which is available in relation to birthing service
provider actions in the 1990s indicates a steady, very low level of claims. One
MDO publicly confirmed this in 1993 - “the number of actions in which it is
asserted that severe neurological handicap has arisen from an obstetrician's negligence
appears to be both low and rising only slowly”.[441]
Rather than increased claims, the three main reasons for
contribution increases have been:
-
the move away from a single flat rate contribution payable by all
doctor members, whatever they practised and wherever they practised, which had
applied to MDO business over the first 80 odd years of this century;
-
the need to address long term underfunding of liabilities, which was
caused by indemnity subscriptions being held at an artificially low level for many
years, particularly in the 1970s and 1980s, when the frequency of claims
increased dramatically from a very low level; and
-
larger awards for future care costs for severely disabled people and
the need to adequately reserve for these costs in future cases.
The reasons for the disproportionate effect of subscription
rises on birthing service providers are described above - obstetrics generates
a very small number of very expensive claims, and gynaecology generates a
significant number of generally low value claims.[442]
10.37
Available data provides
inadequate evidence from which to draw conclusions about the existence or
otherwise of a litigation crisis. What is clear is that litigation and medical
defence subscription rates are issues of continuing significant concern to
doctors, and that the fear of litigation, whether it is based on reality or
not, is affecting the practice decisions of at least some doctors. None of the
recommendations of the PIR, which sought to ensure better information was
available to assess these claims, have been acted on and so the Committee is in
no better position than was the PIR to reach any definitive conclusions on
these issues.
The way forward
10.38
The Senate Committee has been
concerned to discover the extent of the secrecy surrounding the operations of
the medical defence organisations. They are not publicly accountable. They do
not have to provide information either to the public or even to their members
on basic aspects of their operations such as the size of their reserves, the
criteria governing the size of their premiums or the extent of the cross
subsidisation which, they claim, affects premium levels. The obstetrician/
gynaecologist specialists claim that without such scrutiny ‘their financial
positions are subject to the untested whims of the relevant MDOs’. Such a
situation is clearly unacceptable.
10.39
Better information on these
issues requires greater investigation than has been possible during this
Inquiry. In addition to greater understanding of the reasons for subscription
rises, there is a need to consider a wide range of other issues in more detail,
including:
-
the impact of fear of litigation on the quality
of care provided to birthing women eg through defensive medical practices;
-
the impact of premium levels and types of cover
on the availability of services from other practitioners, such as self-employed
midwives;
-
the impact of birth related litigation on State
Government health departments’ liabilities, given that the majority of births
occur in that area;
-
the evidence that is continuing to emerge that,
in the vast majority of children affected by cerebral palsy, there is little or
no link to sub-standard obstetric care, and the need for further evidence based
research to look at whether there are specific characteristics of the condition
in children where sub-standard obstetric care (either in pregnancy, labour or
birth) was the likely cause of their disabilities;
-
the use or otherwise of such evidence by lawyers
and judges in determining whether a child is entitled to damages, including
issues such as the use of expert evidence and clinical practice guidelines;
-
the models which are operating in jurisdictions
such as Virginia, Florida and some Scandinavian countries, where no-fault
regimes are substituted for compensation based on negligence;
-
the various different ways state governments
have made changes to their indemnity arrangements to accommodate the fears of
medical practitioners providing birthing services in the public system,
particularly in rural areas[443];
-
the emerging public recognition of the
importance of adequate care for all children and adults with significant
neurological impairments and the inadequacies of community- funded services for
these people;
-
the impact these service and assistance
inadequacies have on the incentives for families to litigate and whether this
is in fact occurring;
-
the impact of litigation on both practitioners
and the families of children born with significant disabilities, whether
litigation is successful or not; and
-
the impact of assisted reproduction technologies
on the incidence of children born with cerebral palsy and the relationship
between this and litigation (if any).
10.40
These issues need further
investigation.
Recommendation
The Committee RECOMMENDS that the
Commonwealth Government establish an independent inquiry into medical indemnity
and litigation, including the impact of litigation and indemnity on the
provision and practice of obstetric services, alternative approaches to the
funding of medical litigation and alternative approaches to the funding of
compensation for disability.
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