Should insurers be prepared for an influx of professional indemnity claims?

Should insurers be prepared for an influx of professional indemnity claims? | Insurance Business New Zealand

Should insurers be prepared for an influx of professional indemnity claims?

With Auckland and Waikato hospitals feeling the pressure of prolonged restrictions, insurance providers are preparing for a rise in complaints around delays to treatment once lockdown is lifted - and for medical professionals, this may be a good time to check that their professional indemnity cover is up to date.

Figures show that between August 15 and October 24, over 100,000 specialist assessments and planned elective procedures were cancelled due to the Delta outbreak, and although Auckland’s DHBs have been hit the hardest, the cancellations have affected the whole country.

Over 43,000 first specialist assessments and follow up appointments were cancelled nationwide due to COVID-19, along with 6,550 planned inpatient procedures across New Zealand hospitals. Other affected procedures included diagnostic radiology scans such as CTs, MRIs and ultrasounds, and endoscopies.

Academic surgeon Dr Sarah Rennie said that a rise in COVID-19 cases needing hospital-level care would delay these procedures even further, and may put the waitlisted patients at more risk.

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“Patients’ conditions may deteriorate in the meantime, and they may suffer more pain and disability as a result of their conditions, and it may have a negative impact on their quality of life,” Rennie said.

“I am concerned about us having the capacity to deal with the backlog, and I am also concerned that it will get worse before things improve.”

Commenting on the impact of COVID-19 on the healthcare system, insurance provider Medicus said it is already taking up significant capacity - and as the end of lockdown draws near, ICU capacity will be under particular scrutiny.

Medicus chairman Dr Richard Stubbs said we may start to see more complaints coming in over the next few years around potential resulting delays in treatment, and right now, it is difficult to predict how those cases might resolve.

“We’ve begun to see just a little bit of the impact of COVID on our health system now, and we’ve begun to talk about just how many procedures have been cancelled in Auckland hospitals as they divert energy towards managing COVID patients,” Stubbs said.

“If we’ve got 80 patients in hospital with COVID in Auckland - that’s a significant proportion of beds that were never needed for this condition before, and we didn’t have quite enough beds to keep up with everything else to begin with. Suddenly, we have 80 beds taken out, and the trouble is that they’re not taken for an average of one or two days. They’re often taken out for an average of several weeks, and sometimes longer. That’s a big problem.”

“The cover that we provide is professional indemnity, and the one thing I think we can unfortunately expect is that when there are major delays in people’s healthcare, people may end up blaming the doctors and the hospitals,” he explained.

“So, it’s not impossible that we might see more complaints against the doctors, professionals and the health service because of the delays that come about.”

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Dr Stubbs noted that even now, the majority of claims for professional indemnity are for complaints around delays in treatment. With the healthcare system under pressure and a significant number of diagnostic procedures already delayed, it seems likely that this number will increase - and when it comes to damages, he said the kind of PI cover that professionals hold will become very important.

“It’s hard to know how easily those kinds of complaints will be able to be batted off. Some will probably be concluded fairly easily, but others may well lead to a significant legal defence having to be mounted,” Stubbs said.

“Quite a large proportion of complaints to the Health and Disability Commissioner are already about delayed diagnosis, and every doctor who gets a complaint about a delayed diagnosis will need help from a professional indemnity provider. So, there are implications for insurers there, as well as those providing indemnity, in-house advice and legal assistance.”

“Traditionally, the mutual societies that provide professional indemnity will provide assistance without giving any assurance around compensation, or around awards of damages,” he added.

“That’s one of the points of difference compared with the product we provide, where if there are damages, they are covered under the policy and it’s not a discretionary payment. That’s one of the reasons why many professionals in this country don’t actually have as good professional indemnity cover as they think they do.”