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07.09.17

NAO demands coherent plan to tackle ‘spiralling’ negligence claim costs

The cost of clinical negligence claims is rising at a faster rate year-on-year than NHS funding and current plans to curb this growth are unlikely to work, the National Audit Office (NAO) has warned.

In its latest report, ‘Managing the costs of clinical negligence in trusts’, the NAO revealed that at £60bn, up from £51bn last year, the provision for clinical negligence in trusts is one of the biggest liabilities in the government accounts, and one of the fastest-growing.

Over the last decade, spending on the Clinical Negligence Scheme for Trusts has quadrupled from £0.4bn in 2006-07 to £1.6bn in 2016-17, while the number of successful clinical negligence claims where damages were awarded has more than doubled, from 2,800 to 7,300.

The increasing number of claims accounted for 45% of the overall increase in costs, while rising payments for damages and claimant legal costs accounted for 33% and 21% respectively.

It was noted that the Department of Health and NHS Resolution have taken action to contain the rising cost of clinical negligence claims. For example, NHS Resolution has reduced the average cost per claim of its claims operations. However, Amyas Morse, head of the NAO, stated that the savings from the measures proposed “are small compared with the predicted rise in overall costs”.

“Fundamentally changing the biggest drivers of increasing cost will require significant activity in policy and legislation, areas beyond my scope,” said Morse.

Coherent strategy

The auditor recommended that by September 2018 the DH, together with the Ministry of Justice and others, should clearly set out a co-ordinated strategy to manage the growth in the cost of the Clinical Negligence Scheme for Trusts.

This strategy should set out what it hopes to achieve; address all factors contributing to the costs of rising clinical negligence claims that can be influenced by the government, including the number of claims, legal costs and damages awarded; and assign accountabilities and set realistic performance measures for organisations for achieving these ambitions.

In addition, NHS Resolution should work with work with its members and other bodies, such as NHS Improvement, to promote better and more consistent data for complaints, incidents and negligence claims across the system.

Unless the current cost of claims is tackled, the NAO stated that the average percentage of a trust’s income spent to pay for the Clinical Negligence Scheme for Trusts is likely to rise to 4% by 2020-21. At the moment it stands at 1.8%, up from 1.3% in 2010-11.

It was noted that NHS Resolution has identified what is driving the rising costs of clinical negligence, but many of the contributing factors are hard for it to influence directly. Factors identified include rising activity in the NHS; increasing life expectancy and cost of care, contributing to the increase in damages awarded for a small number of high-value claims; and an increase in the number of low- and medium-value claims up to £250,000, contributing to increasing legal costs.

The auditors added there isn’t a coherent cross-government strategy, underpinned by policy, to support measures to tackle the rising cost of clinical negligence.

A government spokesman admitted that clinical negligence costs are too high, “which is why are we are taking action across government to drive these costs down”.

“This includes proposals to fix the amount legal firms can recover from clinical negligence cases and provide families affected by severe avoidable birth injuries with an alternative to lengthy court disputes – as well as investing millions in training for staff and new equipment to deliver our ambition of halving neonatal deaths, stillbirths, maternal deaths and brain injuries caused during or shortly after labour by 2030,” they added.

“But there is still more to do – that's why we will develop a coherent strategy to tackle the rising costs, supported by our relentless pursuit of improved safety standards and a transparent, learning culture across the NHS.”

‘We can’t go on like this’

Responding to the report, Niall Dickson, chief executive of the NHS Confederation, which represents health organisations in England, Wales and Northern Ireland, stated that “we cannot go on like this with the NHS spending more and more on litigation”.

He added that the NAO found that there was no evidence of poorer patient safety. Earlier this year, NHS Confederation pointed out that while there are fewer claims, trusts are paying more to claimant’s lawyers in legal fees.

“We do accept that there are too many mistakes and that more needs to be done to learn lessons when things go wrong,” said Dickson. “The Getting It Right First Time programme will certainly help with that. But this rising tide of litigation is draining the NHS of resources and must be urgently addressed.”

Meg Hillier MP, chair of the influential Public Accounts Committee, stated that the costs of clinical negligence claims are spiralling at a time of immense financial pressures on the NHS, taking scarce resources away from frontline services and patients.

“The DH and Ministry of Justice have been too slow to work together to turn the tide, with actions to save £90m a year by 2020-21 a drop in the ocean in the face of forecast costs of £3.2bn a year by 2021,” she argued. “We need government to take a good hard look at the financial and personal costs of clinical negligence.”

And Dr Pallavi Bradshaw, senior medicolegal adviser at the Medical Protection Society, added that the NAO is right to raise concerns about the rising cost of clinical negligence to the NHS.

We believe legal reform is needed to help achieve a balance between compensation that is reasonable, but also affordable – both to the NHS and to healthcare professionals who are feeling the pressure of rising clinical negligence costs through their professional protection subscriptions,” he explained.

“Of course controlling the cost of clinical negligence, once a claim is made, is just one component of a more sustainable system. This must go hand in hand with continual improvements in patient safety to help prevent adverse events, and a shift to a more open, learning environment in healthcare where mistakes are routinely discussed and learned from.”

(Image: c.Marbury)

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