Medical Malpractice: A Costly Business

Asia’s healthcare systems are, perhaps, the most complex and challenging of all global health systems. Whilst the growth in GDP is outpacing that seen in more established markets, this growth is not sufficient to keep pace with the needs of a population in which rapid ageing and increasing incidence of chronic illness are rising as quickly as they are. Asia is hurtling towards having the highest elderly dependency ratio in the world, and the highest prevalence rate of illness globally – challenges which have every possibility of overstretching healthcare system and sending them into decline rather than towards prosperity. Left unchanged, Asia’s healthcare markets will require over a million more hospital beds in just ten years and a doubling of healthcare spend to deliver care to the same standard as seen today.

Compounding this challenge, rising middle classes have growing expectations of the healthcare professionals and institutions that serve them. Their health literacy levels – once very low – are evolving and patient’s awareness of what “good care” looks like is continually being informed by the democratisation of data and a global movement to improve transparency of quality standards. This is particularly important given the generally lax regulation seen across Asia’s health markets, with very few internationally establishes standards or monitoring processes. And whilst the status of doctors in Asian societies remains very high, there is a growing appreciation of the rights of patients and consumers and more willingness to challenge clinical decisions.

This mix – of high workloads, a lack of standards and regulation and increasing patient expectations, is one that presents numerable risks and will almost certainly manifest in a higher number of medical malpractice claims. Alongside a rise in frequency of claims, the monetary amount of claims is also likely to rise; Asia has some of the highest rates of medical inflation globally, with some markets – such as Hong Kong and Singapore – having private procedure fees at levels on par with or exceeding, the pricing seen in the US markets. As malpractice cover typically includes loss of earnings, the claim amounts are therefore likely to continue to grow in line with the inflation seen in the sector.

The problems of medical malpractice are often exacerbated by a lack of strong regulating professional bodies for the medical community. In most Asian markets, self-regulation is common for the medical profession. This, compounded with poor data availability, makes accountability for clinical practices and outcomes very weak in comparison with the standards seen in more established markets. Medical professionals in many emerging Asian markets rarely face scrutiny for poor practice, and very few have their license revoked or removed; meaning patients see litigation as one of their only recourse to action.

Table: Reasons for rising clinical risks in Asia

	A lack of regulation and clinical standards • Limited accountability • Poor practices that are often undetected or unchallenged
	High medical inflation • Higher medical malpractice claims • Higher patient expectations
	High variability in care delivery • Greater risk of medical error • Unpredictable care outcomes
	Overburdened health systems • Overworked clinicians and teams • Access issues, higher diagnosis and treatment delays
	Increased patient expectation • Greater propensity to litigation • Knowledge on “best practice” and willingness to challenge

In addition, there is considerable fragmentation in the way clinicians and providers are organised across Asia. Fragmentation in health systems costs lives. Morbidity and mortality are significantly higher in markets that have poor coordination of incentives, care models and clinical activity. In Asia, unlike more established markets, there is greater pluralisation of providers, all operating with looser regulatory frameworks. In Hong Kong, China and Singapore, upwards of 95% of all private hospital beds are operated by single hospital providers of less than 1,500 beds, which contrasts dramatically with more established markets in which larger groups/chains are more prevalent.

Whilst both independent and group hospitals could have equal levels of quality, the former are more likely to have breadth and depth of expertise, the ability to centralise more specialist services in a way that drives quality and be in a position to invest in group-wide IT, quality assurance and improvement activities that reduce risk to both clinicians and the organisation overall. These factors mean the rate of medical malpractice claims are likely to steadily rise across Asia. As greater levels of transparency are slowly applied via Government reforms, and care practices – both good and bad - become more obvious, hospitals and their clinicians will face increased scrutiny. Whilst this is ultimately likely to be a good thing, and bring about a transformation of health systems towards safer and less variables models of care, the near-term will see this translate to litigation unless proactive steps are adopted.

Source: Asia Care Group