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Insurance industry scrambles to respond to rise in medical malpractice claims

The growth in medical malpractice litigation has seen an array of new insurance products come onto the market, writes Stephen Coan for MedicalBrief.

“An explosion” is how Health minister Aaron Motsoaledi has described the mushrooming number of medical malpractice litigation claims in South Africa. According to a Health e-News report in 2018 the Gauteng Health Department alone had paid out at least R1bn in lawsuits since January 2015 and the Medical Protection Society reported that claims over R1m had increased nearly 550% compared to those of 10 years ago.

The dramatic rise in medical malpractice claims saw insurance companies grow wary, said Donald Dinnie, Natmed Medical Defence CEO. “Fifteen years ago many backed out because of the high level of risk but now there is something of a resurgence.”

But what has triggered this explosion in the number of medical negligence claims? A combination of factors according to the experts, including improved constitutional rights, a growing awareness of patients’ rights and the entrenchment of a consumer society. “There has been a move away from a paternalistic society ‘where the doctor knows best’,” Dinnie says. “And there is a tendency to find fault when things go wrong rather than put it down to bad luck. If something goes wrong, it’s somebody’s fault.”

A recent contributor to the medical malpractice claims explosion are amendments to legislation governing the Road Accident Fund (RAF). “These make damage claims from injuries sustained in motor vehicle accidents less profitable for personal injury litigators,” said Pierre Bekker CEO of Safire Insurance Company. “This has spurred many to turn to more lucrative options such as medical malpractice claims. As a result, many doctors risk becoming the targets of vexatious litigation.”

According to Letitia Pienaar, senior lecturer in the College of Law, University of South Africa, in her paper Investigating the Reasons behind the Increase in Medical Negligence Claims there is also the possibility that “medical negligence litigation is simply increasing because the standard of health care provided by medical practitioners has dropped.” This at a time when recourse to legal action has become available to a much wider public than previously along with plentiful legal advertising and even reports of aggressive plaintiffs touting for work inside hospitals. However, as Pienaar pointed out, “lawyers cannot fabricate medical negligence claims for litigation.”

In 2012 the HPCSA launched a campaign to educate patients about their rights, citing a “decline in professionalism among health care practitioners” as the reason for the campaign.

One response on the part of health professionals to the increase in medical malpractice litigation has seen “defensive medicine” replace, to some extent, that of traditional “compassionate medicine: to cover the doctor in the event of an unfortunate outcome.

The resurgence in medical malpractice insurance has seen various new products arrive on the market. Genoa Underwriting Managers and Safire Insurance Company recently launched a Medical Malpractice Insurance product designed to address South African realities. “Based on their associated risk profiles, we will be providing practitioners with different limits of indemnity from which to choose,” explained Michael-John Damant, a director of Genoa. “This enables them to balance the costs of insurance against the cover that best suits their needs.”

This in a claims-made policy as opposed to the traditional occurrence based policy, where, said Damant, “the claims can be infinite. Another big peace of mind for the practitioner is the Extended Reporting Period (ERP) and Additional Reporting Period (ARP) which ensures claims remain finite.” And being a South African product as opposed to one offered by an offshore it is further protected by the Financial Advisory and Intermediary Services Act and the South African Ombudsman of Short-Term Insurance (OSTI). “This product gives power back to the practitioner.”

While the increase in medical negligence claims cannot be ascribed to any one single reason but is the consequence of developments in the health sector, new legislation and societal trends, it seems, after an initial pause for breath, that the medical insurance industry is returning to the fray with renewed creativity.

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