Even for a Specialist, Malpractice Insurance is far too Expensive

Doctor Khumalo is a specialist neurosurgeon. Like specialists across all aspects of the medical profession, his practice is becoming too expensive to run with crushing insurance premiums. Soon he will have no option but to increase his consultation fees, putting him out of the reach of more and more private patients.

The cost of running a practice adds up. Some of his fellow medical care practitioners end up charging up to R2000 a consultation to cover the basic insurance. They may be able to afford it. Most practitioners, like Dr Khumalo, cannot.

Like most insurance, medical malpractice insurance is a grudge purchase and with the extravagant premiums, he has to fork out each month, a huge one at that.

Unfortunately, there are limited number of medical indemnity providers in South Africa. Add to that the rising costs of skilled attorneys, the length of time should a case go to trial, the insurance carrier's cost of operations and the fact that medical lawsuits are increasing at an alarming rate.

The Monopoly

Having different options to choose from has also not been possible for Dr Khumalo as for a long time, medical malpractice protection in South Africa has been dominated by a non-South African provider. Since there were no providers on local soil, Dr Khumalo could not shop around for the type of cover that makes the most sense for his specific practice. Up to now, he has had to operate in a one-size fits all market.

For South African doctors, recourse also becomes very difficult when dealing with non South African providers. This has been one of the most difficult drawbacks he has had to deal with when trying to interact with a company that does not operate locally, especially when needed during the defense of medical cases. Should a claim be repudiated, doctors have no recourse under the South African legal system.

Lawsuits are more common

Dr Khumalo has to practice medicine an environment where doctors often get sued for acts of omission rather than commission. This means that doctors often become self-protective, doing more than what is required to prove that they took care of procedures should litigation arise. They are forced to do this because the public is becoming more aware and are claiming more than before. There are also attorney's that are encouraging clients to claim, which isn't necessarily always the right approach.

Occurrence Based vs Claims-Made Insurance

Another front on which Dr Khumalo choices are limited is in choosing the type of insurance he needs. Two options exist:

Occurrence based insurance which means that a doctor is indemnified for life for incidents that occurred during the period of membership. Even if the claim is made years after the incident occurred, the doctor will still be covered given that the procedure took occurred during the period of membership.

Claims-made insurance. These policies are more complex than occurrence policies. It covers insurance claims filed during a given period of time. A claim must be filed while a claims-made policy is still in effect in order for it to be covered by the insurance carrier. This type of policy is generally less expensive than an occurrence policy as there isn’t any automatic coverage in place once the policy has ended. They require a strong understanding of the policy language used in the insurance contract. Claims-made coverage is triggered by the insured’s awareness of potential claims and notification of the claim to the insurance company. Failing to properly notify the carrier can potentially void any coverage.

Dr Khumalo needs to choose the type of cover that makes the most sense to him taking into account affordability and type of cover. He ends up choosing claims-made cover as occurrence based cover is just too expensive, just not within his reach, regardless of which type of cover best suits his needs.

Mediation

Mediation is defined as intervention; interposition; the act of a third person who interferes between two contending parties with a view to reconcile them or persuade them to adjust or settle their dispute. This alternative to litigation has become increasingly attractive because it reduces cost and time spent on lawsuits, and allow the parties more input in determining the outcome. A mediator can improve communication and help the parties clarify the issues to speed up closing the claim and expediting settlement.

Should the patient agree to mediation, Dr Khumalo can be assured of quicker settlement and lower cost. This is especially important in the overtaxed South African legal system where there are currently around 2 000 pending court cases with the total amount claimed being approximately ZAR 3.5 billion. Heres the link with the information.

Mediation is often the better option since taking the legal route may result in claims taking years to be settled. With that, legal costs accumulate and the final settlement can be very skewed in comparison to the actual claimed amount.

Mediation in medical malpractice suits is definitely the speedier and more cost-effective option for conflict resolution.

Where do we go from here?

The good news is that South African Healthcare Practitioners and Specialists now have a wider variety of locally based insurance companies to choose from. The different types of cover are more accessible, premiums are more competitive and since these companies operate locally, legal recourse and mediation are possible.

Medical malpractice insurance no longer needs to be the bane of South African doctor’s existence. They will not cost you your hard-earned practice and offer the ability to apply that brilliant mind to healing and not only trying to keep your doors open for business.