19.09.2013
Key Positions

Liability in the Health Care Industry

In international comparison, Germany has a firstclass health care system. Medical engineering, diagnostic possibilities, the training of personnel and therapies are all state-of-the-art in Germany. It does not surprise that wealthy guests from the Arab world eagerly travel to Germany for medical treatment.

Still, to err is human. Particularly in health care, errors can have dramatic consequences for patients whose health can be permanently affected but also for doctors who can be held liable for their errors. Doctors, midwives and hospital employees are insured against liability to perform their jobs without worrying about financial ruin.

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Fortunately, people who have suffered accidents are treated far better and more intensively today than in the past. Round-the-clock care and home renovations enable many persons who have suffered injuries to live their lives independently. This has consequences, however: liability insurance has witnessed a sharp rise in the costs associated with personal injuries in recent years.

The following factors can be identified as the reasons for the increased expenses in case of personal injuries:

  • more elaborate medical and nursing care for injured persons;
  • higher claims for loss of earnings on the part of in- sured persons;
  • significantly increased medical treatment and nursing costs and costs for the loss of earnings through higher life expectancies for injured persons;
  • sharply reduced recourse to social security insurance agencies;
  • higher compensation for pain and suffering.

In recent years, the average expenses for severe personal injuries have increased by 6% per year, with some of the aforementioned claims having increased by more than 10% per year. All technical analyses suggest that this trend is likely to continue in the future. Yet, claims are not increasing equally in all areas of health care. Severe personal injuries, e.g. in the form of life-long handicaps due to malpractice at birth are responsible for this cost increase. In this case, thus, only a few professional health care groups (gynecologists, midwives, surgeons) are concerned.

Through public protests, midwives have raised awareness that the costs for their professional liability insurance have reached amounts that no longer stand in any reasonable relation to their earnings.

There are no simple solutions to these problems. Nevertheless, the need for action cannot be disputed if one wants to avoid a situation in which midwives will no longer be able to offer midwifery service. As the health care sector represents a key pillar of services of general interest, a broad political consensus with view to financing the sharp increase in personal injury claims is desirable. German insurers are ready to collaborate constructively in building such a consensus.

Our Positions
Expand prevention
Averting claims to the highest degree possible is in the interests of patients. The risk management and malpractice reporting system according to the Patients’ Rights Act is a step in the right direction. Nevertheless, prevention can be further improved by considering key issues: How can hospital hygiene be improved? Does it actually make sense to engage more freelance doctors in hospitals who are not integrated into risk management systems? Patients also have to be better protected from low quality service providers. An obvious accumulation of malpractice incidents on the part of a single doctor should lead to an automatic review of his or her medical qualifications.
Limit recourse of social insurance providers
Providers of insurance for health, care, and pension nowadays have more stringent requirements for recourse than in the past. In cases of personal injuries, caused by malpractice on the part of doctors or midwives, costs for health care or rehabilitation are requested from professional liability insurers. Limiting recourse would assure that these costs are not shifted unjustly to the relatively small subgroups of insured persons (e.g. midwives), but would leave them to the much larger number of persons insured in the statutory health system. This would help stabilize professional liability insurance premiums over the long term.
Higher wages for some health care professions
The amended Supply Structure Act provides for higher compensation for freelance midwives that offer delivery assistance, thus providing that they can afford the rising premiums for professional liability insurance. It should be considered to establish a compensation mechanism to ensure that rising expenses related to professional services (e.g. premium adjustments for malpractice insurance) are compensated for in a reliable manner. This approach could be applied to specific medical fields.
Voluntary insurance of medical devices
The manufacturer’s liability insurance compensates for injuries through faulty medical devices. The insurance penetration in this segment is very high. Mandatory insurance is therefore not necessary and even more so as its legal requirements provide for what, how and in what form insurance cover is to be issued and thus impedes individual insurance. Mandatory insurance would make insurance protection unnecessarily expensive and, furthermore, would not insure claims arising from criminal activities.
Do not introduce compensation for the pain and suffering of relatives
No general claim for compensation for pain and suffering should be introduced for the relatives of accident victims. According to jurisdiction, compensation for immaterial damage is already paid to relatives in justified cases (damages caused by shock). However, a general claim would lead to huge problems of assessment and countless lawsuits. Who wants to decide on the amount compensation for the pain and suffering of a mother whose child has been severely injured in a car accident? How is this claim to be handled in relation to other relatives and cases? Moreover, damages for pain and suffering for relatives most likely would not only lead to high costs but sharply increase the compensation for pain and suffering for directly injured persons, thus reinforcing the above-described trend and the massive rise of expenses associated with severe personal injury claims.