Medical negligence and the NHS: an economic analysis

Medical negligence was estimated to cost the NHS in England 235m pounds sterling in 1996/1997, growing at rate of up to 25% per annum. Yet analysis of NHS accounts suggest that a change in accounting policy has led to growth rates and recurrent expenditure on medical negligence being over estimated. The main concern, however, is total societal cost, not the accounting cost to the NHS. The objective of policy should be to ensure that cost-effective investment in injury prevention takes place. Measures that simply shift cost to other social budgets or onto patients are not helpful. NHS arrangements changed in the 1990s with Trusts taking responsibility for claims against hospital doctors and a new NHS Litigation Authority providing insurance for Trusts. It is unclear, however, whether Trusts have had either the incentives or the ability to implement effect risk management policies. Estimates based on two US studies and one UK study suggest that negligence in the NHS in England may cause around 90000 adverse events per year involving 13500 deaths, but only resulting in around 7000 claims and 2000 payments. A priority must be the establishment of a comprehensive national database of claims information. Other policy measures are proposed to reinforce the incentives on Trusts and doctors to implement cost-effective risk management policies.