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Private practice increasing target of indemnity claims


In what might be considered a clear case of perverse incentives, medical indemnity payouts are likely to be larger for patients who have suffered a severe injury than for those who have died.

One in five medical indemnity claims involving cases of severe injury that were resolved in 2012-13 resulted in payouts greater than $500,000, compared with just 3 per cent of those where the patient died, reflecting the ongoing financial, physical and social harm suffered by those forced to live with the consequences of severe injury, and their carers.

In its update of medical indemnity claims, the Australian Institute of Health and Welfare found that there has been an increase in claims involving the private sector – up to around 3300 a year in recent years from about 2500 a year late last decade – though there has been little change in the size of payouts, with around two-thirds resolved for less than $10,000.

Unsurprisingly, given their predominance in the medical workforce, GPs accounted for largest proportion of new claims (11.7 per cent) in 2012-13, while general surgery (3.9 per cent) was a distant second, followed by orthopaedic surgery (3.7 per cent).

Over the years, obstetrics has had an unenviable reputation as a particularly litigious specialty, but the Institute’s data suggest this status is on the wane – after accounting for 12 per cent of overall claims in 2008-09, the specialty dropped to 8 per cent in 2012-13.

At the same time that the proportion of indemnity claims in obstetrics has declined, it has risen sharply in the field of digestive, metabolic and endocrine system medicine, surging from 10 per cent of all new claims in 2008-09 to 24 per cent in 2012-13 – the highest of any area of practice – followed by musculoskeletal with 20.6 per cent of new claims and mental/nervous system medicine (12.4 per cent). Death accounted for 11.4 per cent of new claims.

In what would be of some relief for insurers and their shareholders, the majority of current claims are for less than $30,000, though a not insubstantial 8.3 per cent are for more than $500,000 (mostly involving public hospitals).

New claims in 2012-13 most commonly arose from procedures (24.1 per cent), diagnosis (17.4 per cent) and treatment (17.1 per cent).

In the public sector, the most common source of claims arising from procedures related to post-operative (8.2 per cent) or intra-operative (5.3 per cent) complications. Other claims arose from the performance of the wrong procedure (15 claims, 1.6 per cent), failure to perform a procedure (25 claims, 2.6 per cent) and, in one instance, a procedure carried out in the wrong part of the body.

Claims arising from treatment primarily concerned delays or the failure of treatments to work, while problems with medication were a relatively rare reason to make an indemnity claim, accounting for just 27 out of almost 950 new claims lodged in the public sector.

Adrian Rollins