In the 21st century, Australia’s healthcare system has moved away from the old “Doctor knows best” model towards patient-centred healthcare. In the words of the Australian Commission on Safety and Quality in Health Care, “Person-centred care is widely recognised as a foundation to safe, high-quality health care. It is care that respects and responds to the preferences, needs and values of patients and consumers.” Such care is based on the values of compassion and respect for the individual, cultural diversity and patient choice. It is ALP policy (paragraph 27, page 51, 2021 ALP national platform. Please share our petition for no-fault compensation for Australian injured patients.
Logically, person-centred care must include recognition of the reality of patient harm and the need for a no-fault compensation scheme. Why? Because it does not make sense to promote a culture that encourages openness and transparency only as long as things are going well, but adopts an adversarial stance as soon as things go wrong. Human error in healthcare is inevitable, especially when people are working under stressful conditions such as during the pandemic. A recent report by the NSW Health Services Union says that patient complaints about healthcare services have increased 40% since the start of the pandemic and 144% since 2011-12. This suggests that incidents of patient harm are increasing.
Open disclosure programs recognise the inevitability of patient harm. They require health services to apologise to any person seriously harmed while receiving care, explain what went wrong, and describe what action will be taken to avoid similar incidents in future. Openness has been encouraged by assuring potential defendants that the apology, any documents created during the incident review and the information provided cannot be used in litigation. But these programs have been bedevilled by their inherent contradiction: it is often not clear to either healthcare professionals or patients whether the principal aim of the program is genuine openness and transparency or whether it is simply a risk management strategy to reduce litigation.
The first national open disclosure policy was introduced in 2003 and was part of the response to the national insurance crisis that erupted at the turn of the millennium. Australia's second largest insurance company, HIH, collapsed in 2001, followed by the near collapse of the largest medical defence organisation, United Medical Protection, in 2002; other insurance companies left the market. The crisis was said to be due to an unsustainable increase in claims; it subsequently became clear that the reality was more complex and included unfunded liabilities.
Federal and state governments took action to resolve the crisis in two ways. First, tort law reforms were introduced which substantially shifted the balance against injured patients. The bar for establishing liability was raised and thresholds and caps limited the damages recoverable. These reforms applied only to public liability and professional negligence claims: claims covered by no-fault schemes, such as workers compensation and motor vehicle accident insurance, were exempted from the legislation. So injured patients not only had no no-fault compensation scheme; they also faced a discriminatory legal framework making it more difficult for them to succeed in a claim.
Second, governments moved to protect the medical indemnity insurance market through subsidies, many of which still exist 20 years later. State and territory governments provide medical indemnity insurance for their public hospitals and health agencies and the employees who work in them. Some states extended this cover following the crisis: for example, in 2002 NSW extended medical indemnity insurance to specialists treating public patients in public hospitals, provided they participated in a risk reduction program. Specialists treating private patients in NSW public hospitals have since been covered in certain circumstances. https://www.aihw.gov.au/getmedia/e0acbb9e-59ac-4e29-bdb7-8d6c9a968c67/mindcps04-05-x01.pdf.aspx
The lion’s share of the medical indemnity insurance support was provided by the Commonwealth and was directed to medical and allied health practitioners, including midwives, working in private practice. The subsidy schemes, introduced from 2003 onwards, include premium support schemes to
subsidise practitioners paying more than 7.5% of their income in premiums; run-off cover schemes covering practitioners no longer working in private practice; high cost and exceptional cost schemes where the Commonwealth picks up much of the cost of very large claims; and incurred-but-not-reported claim schemes, providing cover for unfunded liabilities prior to 2002. In 2020 the
Commonwealth subsidy schemes were reduced from 17 to 7
(https://www1.health.gov.au/internet/main/publishing.nsf/Content/medicalindemnity-iifs
In 2016 the Australian National Audit Office (ANAO) estimated that total expenditure since 2003 under the Commonwealth subsidy schemes was $0.45 billion (https://www.anao.gov.au/work/performance-audit/the-management-administration-and-monitoring-the-indemnity-insurance-fund The ANAO found that the “net assets and capital holdings of insurance providers had improved markedly” since the support measures had been introduced but was critical of departmental monitoring and reporting on the schemes.
In 2020 the Australian Government Actuary carried out an Evaluation of the Stability and Affordability of Medical Indemnity Insurance (https://aga.gov.au/publications/evaluation-stability-affordability-medical-indemnity-insurance ). It found that over the previous decade the industry had an average profit margin of 13.8% of gross earned premium, reducing to 5.4% over the previous five years, a figure more consistent with the profit margin of the insurance industry as a whole. The median premium had reduced significantly since 2002 and remained relatively stable over the previous decade.
These reports make it clear that Australia’s medical indemnity insurance industry is now stable and profitable, and has been for well over a decade. The premiums for healthcare professionals are also stable and affordable. But the millions of dollars flowing from government coffers do not appear to be trickling down to Australia’s injured patients. They are the only stakeholders worse off than they were before the insurance crisis. National data on healthcare compensation claims and their outcomes is outdated, as the Coalition government cut funding for the Medical Indemnity National Collection in 2015. But current Victorian data suggests that only around 3% of seriously injured patients receive compensation.
Patient-centred care rests on the values of compassion, respect for the individual and patient choice, and openness and transparency. It is promoted as long as things go well, and extends as far as an apology if things go wrong. But an apology is not enough for a seriously injured patient, who may be traumatised, in constant pain and have lost his or her livelihood. Such a patient needs acknowledgement and compensation, including for loss of earnings. The one thing the patient does not need is a stressful adversarial battle to get them.
Litigation and the adversarial battle involved are not the only way compensation could be provided. A no-fault compensation scheme would be faster, cheaper, fairer and more consistent with the values of patient-centred care. In its 2011 report on Disability Care and Support, the Productivity Commission considered how a no-fault compensation scheme for catastrophic medical treatment injuries would operate and be financed. In our next update, we will look at what the Productivity Commission recommended and how this first step towards no-fault compensation for Australia’s injured patients could be implemented.
Please continue to share our petition and encourage people to sign it. If you live in New South Wales, consider writing to your MP to support the inclusion of patient harm and appropriate compensation in the terms of reference for the forthcoming NSW special commission of inquiry into health services. Wherever you live, let the ALP and your federal MP know that you want the ALP to maintain its commitment to the National Injury Insurance Scheme. (https://www.change.org/p/i-almost-died-from-surgical-harm-injured-australian-patients-deserve-fair-compensation/u/31636600 )
Gratefully,
Sarah and Vickie