Insurance costs put doctors on defensive
Malpractice cover can cost almost R1m, with jump in claims
● In the past few years, SA has seen a boom in malpractice claims, for which doctors are now paying the price. Annual premiums for malpractice indemnity insurance have risen, in some cases, to almost R1m a year.
Doctors, particularly obstetricians, who were paying up to R250,000 a year four years ago in malpractice premiums, are now paying about R900,000 as a result of the escalation in malpractice claims.
“So what we are saying is that before you have earned a cent in your pocket to pay for your staff or your surgery or your water and lights or your children’s school fees, you’ve got to earn R1m to cover your insurance,” said Justin Malherbe, a health-care and insurance lawyer at Norton Rose Fulbright.
“What makes that so significant is it jumping up in the last four years from R250,000 to R330,000 to R650,000 to R850,000 and now just approaching R1m. That is scary.”
Another result of the increase in litigation is that doctors have been practising defensive medicine — they prescribe medication, tests and treatment that a patient may not need in order to protect themselves against the risk of litigation. This puts an additional burden on patients, medical aid schemes and health-care facilities.
“There’s a general feeling that doctors get sued for acts of omission rather than commission,” said Dr Chris Archer, CEO of the South African Private Practitioners Forum.
This means doctors would rather do more than what is required so that they can prove that they took care in their procedures, should any litigation arise. For obstetricians who specialise in childbirth, defensive medicine means sometimes performing caesarean sections, even when not necessary.
Archer placed SA’s caesarean-section rate at about 80% in private health facilities.
The Medical Protection Society (MPS), which offers doctors, dentists and healthcare professionals indemnity services, said its data showed that in the nine years between 2008 and 2017 the number of medical claims against its members had increased 57%, and the average cost of medical claims had shot up 42%.
“As a responsible not-for-profit mutual organisation we have an obligation to ensure that we collect sufficient subscription income to meet expected future costs so we can be in a position to defend members’ interests long into the future,” said Dr Graham Howarth, MPS’s head of medical services, Africa.
He would not divulge how much the association charges its members, citing commercial confidentiality.
He said the MPS had found that between 2011 and 2016, claims against health-care professionals in SA had increased 35%, and medical and dental claims of more than R1m had risen 121%.
Research by the society found that 47% of doctors practised more defensively than they did five years ago.
Howarth said factors contributing to the current claims environment included a lack of a patient-centred and robust complaints system as well as a lack of an efficient and predictable legal process for handling clinical negligence claims, which contributed to delays, which in turn drove up the cost of settling claims. The only way around the problem was a reform of SA’s legal system to include a pre-litigation resolution framework and the development of a patient-centred complaints process that allowed for local resolution, he said.
Dr Bettina Taylor, clinical risk specialist at EthiQal, a division of Constantia Insurance Company, said indemnifiers provide two types of cover for health-care providers, occurrence-based and claims-made.
She said with occurrence-based cover a doctor is indemnified for life for incidents that occur during the year premiums are paid.
This means that even if a claim arises a few years after the patient saw the doctor, or if the doctor has retired, the indemnifier will pay as long as the doctor paid their premium in the same year of the procedure or treatment.
Taylor confirmed the historic escalation in doctors’ premiums, saying it was not clear why the MPS charged obstetricians about R900,000 for occurrence-based cover, adding that an occurrence-based policy for obstetricians in 2018, issued by Constantia,
What we are saying is that before you have earned a cent in your pocket to pay for your staff or surgery … you’ve got to earn R1m to cover your insurance
Justin Malherbe Health-care and insurance lawyer at Norton Rose Fulbright
cost R595,000 with a commitment to individual policy holders that the rate would remain constant for three years where the doctor’s risk profile remained unchanged.
It is not only doctors in private practice that face rising claims of malpractice. In the 2016/2017 financial year, the department of health found itself with a R56bn contingent liability cost — the cost of successful claims.
In response, the government has proposed the Public Liability Amendment Bill, which aims to replace lump-sum claims of more than R1m with structured payments.
Norton Rose Fulbright is representing the Eastern Cape government in its battle to sift out legitimate cases from invalid and fraudulent ones amounting to R13bn during the 2015/2016 financial year. Since it won the contract in October last year, the law firm said it has saved the Eastern Cape R180m but the work it had done so far had only just scratched the surface.