Working at scale: NHS must tackle medical indemnity costs to unlock innovation

Innovative primary care services need reliable indemnity cover, but new services carry unpredictable risks which can create headaches for the indemnity organisations. Do we need to think differently about indemnity in the future, asks Dr Rebecca Rosen.

How often do we stop to think about assessing risk? In every patient encounter, clinicians make complex, often subconscious decisions about potential dangers. Will a young woman with abdominal pain, for example, be safe at home over the weekend or should she go to A&E?  

In contrast, how many of those working on service redesign know how to think about the medico-legal risks associated with their plans?

Primary care professionals across the country are striving to develop innovative services and new clinical roles as recommended by the Five Year Forward View. But sourcing affordable indemnity for these innovations is proving challenging, and is highlighted as one of the barriers to progress for Prime Minister’s Challenge Fund services.

October’s meeting of the Nuffield Trust’s General Practice Learning Network – which brings together organisations at the cutting edge of larger-scale primary care provision – explored some of the problems that primary care organisations are facing in this area.

Problems for providers

At the network meeting, providers described a range of issues that they experience when indemnifying new services, including:

  • difficulty securing indemnity for some established hospital professions – such as radiographers – in primary care settings
  • limited options for pharmacists in primary care
  • prohibitively high costs for some innovative roles – for example paramedics working in admission avoidance services – which may make the service unaffordable
  • lack of group policies for all staff and all roles in a single practice to reduce the administrative burden of managing individual policies
  • no differential pricing for part-time and full-time workers affecting services staffed by many part-time GPs, such as hub or out-of-hours services.

From an indemnifier’s perspective

To indemnifiers, the world looks different. We heard from an indemnity organisation at the meeting that providers often approach them when a new service is in the final stages before launch, leaving them little time to assess and quantify risks.

The indemnity providers are keen to develop solutions for their members involved in setting up innovative schemes, but doing so can be complex. New professional roles may not be clearly defined and detail on how staff will be accredited, competencies assessed and quality assured may be limited.

From an indemnifier’s perspective, extending the scope of practice of clinicians such as nurse practitioners and transferring roles from GPs to others significantly alters the level of risk inherent in conventional services. Furthermore, since many innovations involve out-of-hours and urgent care, where patients are often sicker than in routine care, the medico-legal risks become even harder to quantify. 

The indemnifiers are in a difficult position. Inflation is approximately doubling the size of claims every seven years. Some are not-for-profit membership organisations traditionally providing ‘occurrence based’ indemnity, meaning they cover any adverse events that occurred during the membership period – even if the claim occurs decades later. Membership subscriptions gathered today must cover the cost of all their claims, including those notified years in the future which may, by then, be very expensive to defend or settle.

Against this background the challenges in setting indemnity fees become easier to understand.

So what can be done to minimise risks and reduce the cost of indemnity?

First, providers need to involve indemnity organisations at an early stage, allowing sufficient time for them to understand potential risks and advise on how to mitigate them. This might include providers modifying the service design in collaborations with indemnifiers and potentially agreeing periodic reviews by the indemnifier to re-assess the level of risk.

Second, service providers must produce clear descriptions of new roles; how staff will be accredited; the activities that will be undertaken; and quality assurance arrangements.

NHS England, Health Education England and the professional regulators could help here by developing national guidance covering the scope of new roles; competency frameworks; education and training frameworks; and guidance on accreditation and quality assurance.

But indemnity organisations also need to think innovatively. For example:

Could they create tiers of indemnity equivalent to low, medium and high risk levels, with explicit criteria to allocate different services to a specific tier of risk? This would therefore allow providers the option to adjust their service design in order to fall into a lower priced tier.

Alternatively, could they reduce indemnity costs for organisations which provide evidence for safe practice and high-quality outcomes? In the United States, some medical groups and primary care partnerships which report high-quality clinical outcomes and adhere to key risk reduction procedures have secured lower premiums.

Finally, could they develop group indemnity policies for all the professionals in a single practice rather than having to negotiate numerous individual policies? With multiple professionals covered in a single policy, would there be a discount available to reflect lower administrative costs associated with a group policy?

With many of the NHS vanguard sites also facing high indemnity costs, this recurrent barrier to innovation is of growing significance to the health service. Effective approaches to reduce the burden of indemnity costs will be more important than ever if the development of innovative new models is to succeed.

  • Rebecca Rosen is a senior fellow in health policy at the Nuffield Trust, a GP in Greenwich, south London and a board member of Greenwich CCG.

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