Health is now the most important issue on the world's agenda, and we have all become 'armchair experts' in virology, the R value and mutations. The recent domination of pandemic issues does not, however, mean that we should be blinkered, as there is considerable other activity in this sector that will bring significant changes to the landscape.
COVID-19
Claims involving healthcare providers and those that insure them arising out of COVID-19 will mirror many of the issues identified by DWF's experts in catastrophic injury, occupational disease and fraud, namely the need to remind claims farmers that correlation is not causation, and in those claims where liability cannot be disputed, a forensic quantum analysis will be essential as the pandemic-hit economy turns loss of earnings multipliers on their head and, to a degree, life expectancy computations.
Other Issues
Political factors are (understandably) impacting healthcare like never before. Drivers being:
- concerns that some patients have been unable to recover damages due to indemnity being denied to the medical professional involved
- the cost of clinical negligence against the NHS to the Government is unsustainable
- the need to manage the social care crisis – funding and integration with the NHS
By way of context, the Department of Health and Social Care 2018 consultation on appropriate clinical negligence cover, asked for views about indemnity cover for health professionals not covered by a state scheme, and indicated a government preference for insurance versus discretionary indemnity, with the expectation that legislation would follow to that effect. As yet there has been no statutory requirement that insurance (not discretionary indemnity) must be taken out by private healthcare practitioners, but it is expected that this will follow and insurers should ensure they are ready for that.
Whilst the cost of claims backed by state indemnity against the NHS appears, at first glance, to be of no relevance to insurers, in February 2021 the Government indicated that it was working on a total overhaul of the ‘outdated’ system of clinical negligence compensation within the NHS, and that no-fault compensation for clinical negligence claims against the NHS was being 'seriously considered'. It is early days, but the Government has indicated an affinity with the Swedish scheme, which covers public and private healthcare. Interestingly, Sweden's model is funded via insurance paid by healthcare providers, which contrasts with New Zealand's no-fault scheme which is funded by the taxpayer.
The unknown is whether the market could grow or shrink. Our prediction is that no-fault compensation is unlikely to overcome the pressures of delivering access to justice and the anomaly that a victim of a broken leg in a motor accident would recover more than a patient suffering the same injury due to a fall in an NHS hospital. If it does come about, it will take time to evolve the proposition.
Another hot potato is the white paper published in February 2021 which details plans to embed lessons learned during the COVID-19 pandemic and make legislative changes 'rewiring' the NHS and the relationship between health and care services (NHS/Local Authorities) to reduce red tape which could lead to private providers (awarded contracts due to statutory obligations to go out to tender) being cut out of future plans. The need for private healthcare insurance will be squeezed here but again, in view of the demand for high-quality health and social care, the affordability of such an option is questionable.
New risks
For those private practitioners who have been able to consult with patients during the pandemic, telemedicine has proven a crucial enabler. Indications are, however, that this will bring its own raft of claims and referrals to regulators, as a result of online prescribing, diagnosis without examinations, no one complete medical record, and platforms set up in haste that are not secure.
Timing
Regulators are hugely backlogged, leaving many practitioners waiting for their fitness to practise to be evaluated and enduring drawn-out coronial and criminal investigations.
In the civil litigation sphere, medical experts are crucial to being able to evaluate the viability and defensibility of clinical negligence claims. Understandably – many have been rather busy over the last 12 months and just as with backlogs in treatments, expert assessments of claims are also being pushed off well into the long grass.
The bottleneck is unlikely to be released before 2022 – until then, we are left with delay, condition and prognosis reviews on the records or at best via Skype/Zoom etc which lacks the rigour of an in-person review, fuelling the potential for fraud. Much as shelf life is a concern for every insurer, now is the time to consider changing that approach as waiting for the right assessment by the best specialist will save money in the long run.
Time pressures are also impacting on the judicial function (as others have referenced) so to return to where we started, and to politics, government action again looks likely to change the landscape, and we anticipate that the compulsory ADR button that has been sitting there waiting to be pressed for many years will be activated within the next 12 months. In view of the costs of litigating a clinical negligence trial, and the impact of Qualified One Way Costs Shifting, waiting for compulsory ADR might be a smart move.
Read our full report 'Looking Ahead in the Insurance Sector'.
