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Government not doing enough to tackle spiraling costs of clinical negligence claims on NHS

The government has to tackle the spiraling costs of clinical negligence claims across the health and justice systems, according to the National Audit Office.

Over the last ten years, spending on the Clinical Negligence Scheme for trusts has quadrupled from £0.4 billion in 2006-07 to £1.6 billion in 2016-17, it says.

Furthermore, the number of successful clinical negligence claims where damages were awarded has more than doubled, from 2,800 to 7,300.

The NAO say the cost of clinical negligence claims is rising at a faster rate year-on-year, than NHS funding, adding to the financial pressures already faced by many trusts, which can have an impact on patients’ access to services and quality of care.

And, trusts spending a higher proportion of their income on clinical negligence are significantly more likely to be in deficit. In 2015-16, for example, all 14 trusts which spent 4% or more of their income on clinical negligence were in deficit.

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.

The fastest percentage rise was in claimant legal costs, which has risen from £77 million to £487 million over the same time period. This is mainly due to an increase in both the number of low- and medium-value claims of less than £250,000 and their average cost.

In 2016-17, the claimant’s legal costs exceeded the damages awarded in 61% of claims settled.

According to the NAO, the Department of Health and NHS Resolution’s proposed actions to contain the rising cost of clinical negligence claims are unlikely to stop this growth.

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. It also challenges excessive charges of claimants’ legal firms, saving £144 million in 2015-16 by challenging claimants’ legal costs.

A number of further schemes are proposed to contain the costs, however, even if successfully implemented, these will only save some £90 million a year by 2020-21.

By contrast, the spending on the Clinical Negligence Scheme for Trusts is expected to double to £3.2 billion by 2020-21.

Amyas Morse, head of the National Audit Office, said: “The cost of clinical negligence in trusts is significant and rising fast, placing increasing financial pressure on an already stretched system.

“NHS Resolution and the Department are proposing measures to tackle this, but the expected savings are small compared with the predicted rise in overall costs.

“At £60 billion, up from £51 billion 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. Fundamentally changing the biggest drivers of increasing cost will require significant activity in policy and legislation.”

The government lacks a coherent cross-government strategy, underpinned by policy, to support measures to tackle the rising cost of clinical negligence, says the NAO.

Dr Pallavi Bradshaw, Senior Medicolegal Adviser at the Medical Protection Society, commented: “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.

“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.”

Read the full report.

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