IHCA Submission on Clinical Indemnity to the Joint Committee on Health and Children

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1 IHCA Submission on Clinical Indemnity to the Joint Committee on Health and Children Thursday 22 nd January

2 I thank the Chairman and other members of the committee for the opportunity to address them on this important issue. Acute surgical and medical services in Ireland are provided through fifty public and twenty independent acute hospitals. There are approximately 2,600 approved public contract consultant posts in public hospitals (of which in excess of 200 post are vacant or filled through temporary ad hoc arrangements), in excess of 400 consultants who practise exclusively in independent hospitals and up to 600 consultants who may practise on a part-time basis in independent hospitals. Independent hospitals carry out about 250,000 theatre procedures annually, accounting for about 40% of the total number of procedures requiring anaesthesia in acute hospitals. Consultants in private practice are also provide care for medical patients and are responsible for a significant proportion of outpatient consultations. All Hospital Consultants in public and independent hospitals are required to be indemnified against claims for medical negligence, as a condition of their employment or practice rights. This will soon become a statutory requirement. I will set out briefly the clinical indemnity arrangements that currently pertain in the public and private healthcare sectors. In the public healthcare sector, the Clinical Indemnity Scheme (CIS) is the main scheme under which the State Claims Agency (SCA) manages clinical negligence claims on behalf of the State arising from the provision of medical care in HSE facilities, public hospitals and other state agencies. The CIS covers all medical malpractice and clinical negligence claims arising from the diagnosis, treatment and care of patients taken against public healthcare enterprises and their employees. Hospital Consultants employed in the public sector are covered under the CIS in respect of alleged incidents of clinical negligence occurring on or after 1 February 2004 in a public setting. In the private healthcare sector, there have traditionally been two main indemnifiers in the Irish market, namely the Medical Defence Union (MDU) and the Medical Protection Society (MPS). Since 1 February 2004, the CIS has covered the excess over the indemnity ceilings (or Caps) set by the State for private indemnifiers of consultants working in private practice settings. Effectively, the private indemnifier s liability in respect of any claim is capped at the relevant indemnity ceiling and the State assumes responsibility for any amount in excess of the cap. The current ceiling set for private indemnifiers of consultants in high risk specialties (e.g. obstetricians, neurosurgeons, orthopaedic surgeons) is 590,425 per claim, subject to an annual aggregate limit of 1,771,275. For other specialties, the ceiling is 1,180,850 million per claim, with no annual aggregate limit. 2

3 The cost of clinical indemnity has doubled for certain specialties in the past two years. In the past year alone, clinical indemnification charges payable by consultants in private practice increased on average by around 40%. The risk categories which include most surgical specialties and obstetrics increased by between 54% and 68%. These increases in 2014 were on top of increases of between 49% and 67% implemented since 2008, including increases of up to one third in 2013 alone. The effect of the foregoing is that indemnity charges have increased to unaffordable levels for Consultants in private practice as highlighted by the following approximate annual charges: 337,000 Obstetrics 104,000 Neurosurgery and Spinal Surgery 97,500 Bariatric Surgery, Gynaecology, Orthopaedics (excluding spinal surgery), Plastic Surgery and Refractive Laser Surgery 77,000 Cardiothoracic Surgery, General Surgery (excluding bariatric), Ophthalmology (excluding Refractive Laser Surgery), Otorhinolaryngology, Urology and Vascular Surgery Substantially increased indemnity charges have become increasingly unaffordable in the light of cuts in health insurer procedure fees of 20% or more since The ongoing uncertainty with regard to future indemnity costs is exacerbating the situation. The indemnification increases have been attributed to a higher frequency of claims in Ireland, increased awards in Irish Courts and lack of progress in reforming the law in relation to medical negligence claims. The need to reform the law in this area was identified as an urgent requirement when the State Claims Agency Clinical Indemnity Scheme was established over a decade ago. At the time, caps were introduced so that the cost of indemnity would be affordable. It was recognised at the time that 100,000 was regarded as the limit of affordability for Obstetrics and the annual charge for surgery was about 30,000 at the same time. Today s costs are around 3 times those levels, highlighting the extent of the problem that has arisen in the interim. The cost of indemnification for Consultants in Ireland is a multiple of that charged in the UK and other jurisdictions. This is primarily due to the fact that the UK reformed the law over a decade ago to address the issues which were driving up their costs and similar actions have been taken in other jurisdictions. In contrast, no reforms have been implemented here. If the law is eventually reformed, it will take a number of years to affect costs. 3

4 The net effect of the escalating costs of indemnity charges is that an increasing number of Consultants have ceased private practice. An estimated twenty consultants ceased private practice in 2014 because the cost of clinical indemnity has become unaffordable and more are planning to cease in 2015 if the unaffordable costs are not addressed. This includes cessations in general surgery, ENT, orthopaedics, pain medicine, neurology, gynaecology, urology and other specialties. It seems highly likely that many private practice vacancies will remain unfilled unless the escalating indemnity costs are addressed. If unaddressed, the current crisis will result in fewer patients being treated in private hospitals, which currently treat around 40% of surgical patients requiring anaesthesia. Private practice consultants also treat medical patients and are responsible for a significant proportion of outpatient consultations. As a result more patients will be forced to seek surgical and medical care in public hospitals which had approximately 60,000 patients on their elective surgery waiting lists in October, an increase of 20% on October In addition, 377,502 patients are awaiting outpatient appointments in public hospitals as of October The Working Group on Medical Negligence formerly chaired by Mr. Justice John Quirke and now Ms Justice Mary Irvine has submitted a report to the President of the High Court and the Minister for Justice with recommendations for the introduction of Pre-action Protocols including the related draft legislation. The protocols if introduced would assist in reducing uncertainty and costs associated with medical negligence claims as has occurred in the UK. The Working Group has submitted an additional report on proposed Rules of Court for more intensive case management of medical negligence cases, including a requirement for the exchange of information within defined time periods, as applies in the commercial court, to reduce delays and costs. In November 2014, MPS published a paper: Challenging the Cost of Clinical Negligence: The Case for Reform, which the IHCA supports. It highlights the deteriorating claims environment, which is a result of increases in the rate at which MPS medical members have been sued in Ireland and the average size of those claims. MPS has noted that the increased number of cases does not reflect a decline in standards or the level of care that Consultants in private practice are providing. The Association has written to the Minister for Health and the Minister for Justice, Equality and Law Reform requesting urgent reform of the law and implementation of the recommendations of the 4

5 Working Group on Medical Negligence. Reform of the law in this area represents the fundamental solution to the problem but it will take time to implement and take effect. Separately, the Association has been in regular contact with the Minister for Health and his senior officials in the Department of Health and the State Claims Agency (SCA) in relation to proposals that could address the crisis in the short-term. The Department has analysed the potential benefit of reducing the Caps under three scenarios. The reductions in the Caps would deliver lower indemnity charges for Consultants and this is one of the potential solutions that needs to be considered. The potential benefit of the SCA offering indemnity cover for Consultants in private practice has also been discussed. It is the view of private practice Consultants that this option should be assessed further in a committee with members from the Department of Health, SCA and the IHCA. The establishment of the proposed Committee is essential to advance the assessment of the most effective solutions to address the unaffordable cost of clinical indemnity. While we understand that work has been advanced to assess a number of potential solutions in conjunction with the State Claims Agency, the unfolding crisis is expanding at a rapid pace. In the absence of an effective solution a growing number of Consultants are ceasing or are planning to cease private practice and either retire early or emigrate to where they can practise with affordable indemnity. Such developments will result in greater delays in treating patients and longer waiting lists in already extremely overstretched public hospitals. The Association welcomes the opportunity to discuss these critically important issues with the Committee and we look forward to answering your questions. End. 5