Hospitals with history of ‘bad claims’ could face budget cuts

HOSPITALS hit by a large number of lawsuits on foot of medical negligence claims face having their budgets cut if Bord Snip Nua’s recommendations are implemented.

The special group tasked with reviewing public service expenditure recommends that the cost and number of claims against each hospital “be charged to the hospital concerned” and “taken into account by the Health Service Executive (HSE) in deciding on financial allocations to individual hospitals based on best performance”.

The recommendation is put forward as an incentive to promote better risk management in hospitals, although the special group admits it is not possible to calculate what savings it would make.

Yesterday, head of the State Claims Agency (SCA), Ciaran Breen, said they were already working with actuaries and the HSE with the intention of introducing such a scheme by the end of the year or early next year.

Mr Breen said a similar “insurance pooling” system operates in Britain.

“It basically means there’s a monetary sanction for hospitals with a bad claims experience,” Mr Breen said.

Under the new system, instead of all claims against hospitals being met out of a fund managed by the SCA, (€60 million this year) each hospital would have its own individual fund and would be penalised if hit by an excessive number of claims. Mr Breen said the scheme would have inbuilt “weighting factors”, in other words it would recognise that some hospitals carry out more complex surgery than others and are therefore more exposed to claims.

The SCA also supports the introduction of “periodic payments” instead of the current lump sum awards paid out in catastrophic injury cases where the state is the defendant. Bord Snip Nua said periodic payments – where the award is paid out on an annual basis over the life span of the plaintiff – would lead to annual cash flow savings in the order of €15m. It recommends the same system be used when the private sector is the defendant.

Mr Breen said periodic payments would have the advantage of not making an award based on a “guesstimate” of the plaintiff’s life expectancy, therefore reducing the risk of over-compensation should the plaintiff die sooner than expected or under-compensation if he/she survived longer than expected and the care funds ran dry.

Bord Snip Nua also recommends the SCA have its own in-house legal team to defend medical malpractice suits.

Implementing all three proposals would save the state €20.5m annually, according to Bord Snip.