Tackling escalating clinical negligence costs requires a ‘co-ordinated policy approach between health and justice bodies’, but the government has not yet established such a strategy, the NAO warned.
The watchdog's Managing the costs of clinical negligence in trusts report found spending on clinical negligence for trusts quadrupled over the last decade from £400m in 2006/7 to £1.6bn last year in 2016/17.
Over the same period, the number of successful claims resulting in pay-outs more than doubled from 2,800 to 7,300. The report centres on rising costs for hospital trusts, but clinical negligence claims against GPs have seen rises at a similar rate in recent years.
GPonline reported last month that indemnity costs had stripped the equivalent of more than 2,500 GPs from the primary care workforce, as 90% of GPs said their indemnity fees rose in the past year.
The NAO called on the government to take a stronger and more integrated approach to rein in the increasing cost of clinical negligence claims across the health and justice systems.
It recommended looking to other countries, where reforms such as prohibiting the awarding of damages for economic losses below a certain level and capping legal costs have helped make significant savings. In the US, the proportion of payouts from claims in 2012 was less than half of the 1992 level, and the cost per physician was reduced by 48%.
The bulk of the increase in costs in the UK – around 45% – was due to the number of claims increasing, while 33% was due to the value of payouts rising. Rising legal costs accounted for the final 21%.
The NAO warned that the DH and NHS Resolution’s proposed actions to contain the rising cost of clinical negligence claims are unlikely to stop this growth, with claims rising at a faster rate year-on-year than NHS funding. It warned that ministers lack 'a coherent cross-government strategy, underpinned by policy, to support measures to tackle the rising cost of clinical negligence’.
Current plans, even if successfully implemented, will only save some £90m a year by 2020/21 – which will barely make a dent in the expected £3.2bn clinical negligence bill for trusts in the same year.
Amyas Morse, head of the NAO, 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 [DH] are proposing measures to tackle this, but the expected savings are small compared with the predicted rise in overall costs.
‘At £60bn, up from £51bn 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, areas beyond my scope.’
House of Commons public accounts committee (PAC) chair Meg Hillier said: ‘The DH and Ministry of Justice have been too slow to work together to turn the tide, with actions to save £90m a year by 2020/21 a drop in the ocean in the face of forecast costs of £3.2bn a year by 2021.
‘We need government to take a good hard look at the financial and personal costs of clinical negligence.’
Dr Pallavi Bradshaw, senior medicolegal adviser at the MPS, said: ‘The NAO is right to raise concerns about the rising cost of clinical negligence to the NHS.
‘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.’
A government spokesman said: ‘Clinical negligence costs are too high, which is why are we are taking action across government to drive these costs down.
‘This includes proposals to fix the amount legal firms can recover from clinical negligence cases and provide families affected by severe avoidable birth injuries with an alternative to lengthy court disputes – as well as investing millions in training for staff and new equipment to deliver our ambition of halving neonatal deaths, stillbirths, maternal deaths and brain injuries caused during or shortly after labour by 2030.
‘But there is still more to do – that’s why we will develop a coherent strategy to tackle the rising costs, supported by our relentless pursuit of improved safety standards and a transparent, learning culture across the NHS.’