Written by Sarah Walls

Healthcare is a high-risk industry. By definition, patients are sick when they enter hospital. They hope that treatment will make them better, but a substantial minority end up worse. Support our petition for no-fault compensation for Australian patients. A 2017 report on the economics of patient safety found that 15% of hospital expenditure and activity in OECD countries is a direct result of adverse events.

The most common adverse events are hospital-acquired infections, venous thromboembolism, pressure ulcers, medication errors and wrong or delayed diagnoses. A 2013 literature review for the Australian Commission on Safety and Quality in Health Care found that in 2011-12 the cost of patient harm due to medication errors amounted to $1.2 billion. Medication-related admissions comprised 2% to 3% of all hospital admissions, 12% of all medical admissions and 20% to 30% of admissions of people aged 65 and over. Adverse drug reactions either on admission or during admission were involved in 3% of hospital admissions.

In Australia, where the only way to obtain compensation is medical negligence litigation, only 1% to 3% of injured patients are compensated. There is ample evidence that no-fault compensation schemes are preferable for patients: such schemes are faster, cheaper, more predictable and a lot less stressful. What is less commonly appreciated is that they are also a lot better for health practitioners.

Medical negligence litigation brings with it the threat of reputational damage. Even if the health practitioner wins the case, if it goes to court, the practitioner risks being publicly labelled as potentially negligent, with all the resulting negative consequences for relationships with colleagues and patients. Litigation also increases healthcare costs by encouraging defensive medicine and the ordering of tests that may not be necessary. It discourages the reporting of medical injuries and provides an incentive for covering them up by withholding crucial documents and maintaining conspiracies of silence.

As international health law expert Prof Jennifer Shulz noted in a 2022 article: “Research on the ‘second victim’ phenomenon (whereby practitioners feel distraught following medical injuries) has demonstrated that practitioners believe disclosure is the right thing to do, but they are unable to disclose because of liability concerns and negligence claims.”

Most patient harm can be traced to failures in communication. Key aspects of a safety culture include openness, transparency, reflection and learning, honesty, respect, teamwork, breaking clinical silos and hierarchies, and a move away from blaming to shared responsibility. Patient engagement is crucial: patients need to be put at the centre of all activities and decision-making.

These values are completely antithetical to the adversarial approach adopted when litigation looms. They are far more consistent with the values underlying no-fault compensation schemes. Such schemes have many advantages for healthcare practitioners. A no-fault compensation scheme:

·       Preserves the trust between healthcare providers and patients. Healthcare providers are more likely to report incidents of patient harm if they know they will not be targeted personally.

·       Supports acknowledgement that human error occurs in the practice of medicine, as in all human activities. Health practitioners are trained to avoid errors, but it is inevitable that in a lifetime of practice, errors will occur.

·       Allows the practitioner to take positive action to help a patient who has been harmed. This has psychological benefits both for the injured patient and for the practitioner who may or may not be responsible for the error. If they are responsible for the error, rather than covering up what has happened, they can take immediate practical steps to help the injured patient, something which benefits both parties. If they are not personally responsible, by assisting the injured patient, they are demonstrating the ethical commitment of the profession to the patient’s well-being.

·       Reduces the likelihood of practitioners being criticised and isolated within the profession. The values underlying no-fault compensation encourage solidarity within the profession. It is easier for senior practitioners to reach out and share their own experience of such incidents.

·       Allows colleges to set ethical standards in the interests of the whole community, and not just their own members. By taking an active role in ensuring that incidents of patient harm are acknowledged and compensated, colleges will increase respect for the medical profession and trust in the healthcare system. They can take an active role by encouraging senior members to participate in the panels that decide claims. This is likely to be a more neutral role than the role played by experts hired by plaintiffs or defendants in medical negligence cases, where the expert is chosen based on their support for the party engaging them.

·       Potentially lower medical indemnity premiums. This depends on the ratio between reliance on premiums and on taxation in funding the scheme; cross subsidisation between low-risk and high-risk specialties; and the constraints placed on common law rights. In 2011 the Productivity Commission estimated that introduction of a National Injury Insurance Scheme, providing no-fault compensation for catastrophic injuries including medical injuries, and the removal of cerebral palsy litigation costs (cerebral palsy care is now provided by the National Disability Insurance Scheme) could reduce doctors’ and hospitals’ insurance costs by $40 million. It acknowledged that its estimate was uncertain and might prove incorrect.  In New Zealand, where no-fault compensation for medical injuries is funded by taxation and employee levies, and where medical negligence claims are barred, medical indemnity premiums cost $500-$1000 per year. They cover legal costs in the event of a complaint against a doctor, travel costs and loss of earnings during a hearing, and medical malpractice penalties. The design of a no-fault compensation scheme is critical in determining whether it lowers medical indemnity premiums.

No-fault compensation schemes remove many obstacles to reporting incidents of patient harm. But even in countries that have such schemes, incidents of patient harm still tend to be underreported. In 2017 Fiona Tito Wheatland, who chaired the landmark Professional Indemnity Review in the early 1990s, completed a fascinating and deeply compassionate PhD exploring why such underreporting occurs.

Her hypothesis was that the occurrence of patient harm and medical error can be perceived psychologically by a doctor as a fundamental threat to his or her identity. This causes a range of psychological defences which make it hard for a doctor to recognise, identify or accept the risk of patient harm. Elements of this identity deny ordinary human psychological and physical limitations, and thus promote unrealistic self or group perceptions, creating risks for both doctors and patients.

She made a number of practical suggestions for tackling this problem, and said: “While there are often statements made about the quality of Australian healthcare, most of these are aspirational rather than factual for a number of reasons. First, there is a longstanding lack of current data on quality of care both nationally and internationally. Secondly, the limited available data on appropriateness of care in Australia shows less than 60% of patients receiving appropriate care and that there is significant, unexplained variable [sic] in interventions across Australian healthcare. Thirdly, there are widely acknowledged high levels of preventable patient harm from those studies which have been conducted [...]. Lastly, progress at achieving measurable improvements in patient safety has been acknowledged as halting and slow, partially because of this lack of data.”

The fact that the vast majority of injured patients are hidden from view and not compensated points to a larger problem: we do not know how safe Australia’s healthcare system is because we do not have comprehensive, transparent collection of data on how many patients are injured and how many are compensated. A no-fault compensation scheme would make it easier to gather this data.

In a federation of states and territories, getting political agreement on no-fault compensation is difficult. In the short term, the medical negligence litigation system could be improved by:

·       introducing court-appointed experts rather than relying on experts respectively supporting the plaintiff and defendants, as suggested by Australian oncologist Prof Richard Epstein;

·       introducing enterprise liability so that claims are made against hospitals rather than against individual doctors. In France, civil claims concerning treatment in public hospitals are brought against the health service, not the individual practitioner. Enterprise liability could be achieved here by legislation specifying that all hospitals, public or private, have a non-delegable duty of care to all patients, public or private.

·       reviewing the statute law on medical negligence to establish whether the changes introduced during the insurance crisis 20 years ago provide equality before the law between plaintiffs and defendants. (See our previous update on How Australia’s legal framework discriminates against injured patients).

A no-fault compensation scheme for healthcare injuries is in everyone’s interests. We need a timetable for its delivery. If you believe that Australia’s health practitioners and injured patients deserve better, please sign and share our petition. If you can manage it, please donate a few dollars so the petition is distributed more widely.

Gratefully,

Sarah and Vickie