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IS MEDICAL INDEMNITY COVER IN THE UK IN NEED OF A RETHINK?

It has been clear for a number of years that the current UK system of medical indemnity is not fit for purpose. On the rare occasions when things go wrong, it does not always compensate patients when it should. From a consultant’s perspective it is expensive, inefficient and bureaucratic. Premia are high and often do not reflect a consultant’s track record or level of skill. 

From a patient's perspective, the process of claiming is often frustrating and lengthy.

Gaps in compensating private patients were addressed in an independent report, into Ian Paterson, the rogue surgeon who performed botched and unnecessary operations on hundreds of women. The report noted that at one stage private patients were potentially left uncompensated as a consequence of their choice to seek private treatment. 

Paterson’s indemnity cover was provided by the Medical Defence Union (MDU), who declined to contribute to the compensation fund set up to recompense patients. Dr Christine Tomkins, chief executive of the MDU, said: ‘It has always been the case that the requirement that doctors have professional indemnity is intended to provide compensation for negligence. The MDU, along with all those indemnifying or insuring doctors, pays compensation to patients for negligence, not for crime.

Spire Healthcare, where Paterson operated, contributed over £27m to the compensation fund.

The report stressed the need for private patients to know more about their options for redress if something goes wrong. It added: ‘The discretionary nature of the cover, combined with the lack of clarity about whether private healthcare providers are vicariously liable for healthcare professionals’ actions, means that there are potential gaps in clinical indemnity in the independent sector which do not exist in the NHS. ‘This risk does not appear to be transparent to private patients at the point that they choose to have their treatment in this sector.

For many newly qualified consultants, the cost of indemnity is one of the biggest barriers to setting up in private practice. The GMC requires all doctors in private practice to maintain indemnity or insurance in respect of claims from patients. Private hospital groups also now have their own detailed requirements setting out the level of cover required. In many cases, premia will run into many tens of thousands of pounds per consultant, which must be paid up front by the consultant before a single patient is treated. 

The UK indemnity market has continued relatively unchanged for over a hundred years. The market is dominated by three large mutuals, known as Medical Defence Organisations (MDOs), each of which was founded over a century ago. Between them they indemnify over 80% of consultants in private practice, and whilst they have served the profession well in the past, their mutual members’ club approach is considered by many to be no longer fit for purpose. Indeed, the sector is awaiting a response to a Government consultation which asked whether fundamental reform of medical indemnity is required.

We believe that the modern business of healthcare, operating in a fast-changing and litigious environment, demands the certainty of contractual insurance combined with a flexibility of approach to adapt to the new patient care models that are emerging.

That healthcare in the UK is going through a fundamental transition is a certainty. Post-Covid, we will see a waiting list of 10m patients (4.6m now and up to 6m as yet unreferred) and a strong demand for private healthcare will be inevitable.If clinicians are going to address this new demand, a new approach to indemnity insurance will need to be found.

At present around 20% of clinicians in private practice are insured while 80% remain with the MDOs. In a world of big data we feel this is archaic and needs to change.

We are working with leaders in the insurance market with the aim of introducing a new model of insurance that leverages new technology and ways of working to provide better value for consultants and greater certainty for patients.