High insurance costs are shutting down maternity wards

We have a major problem in this country. Well, we have a few. But one major problem is that if we don’t address the problems facing the gynaecological industry now we could see a shut down of more maternity wards to such an extent that we may only have a handful of gynaecologists left working in the industry, or possibly even none, finds Angelique Ruzicka.

Obstetricians have been forced out of the industry because of an increase in medical malpractice claims. Some are legit but increasingly there are others that are bogus and take advantage of doctors’ administrative errors. There’s insurance available to those specialising in obstetrics to cover obstetricians in the event of such claims (bogus or not) but because there’s been an increase of such claims the insurance costs have skyrocketed. This, together with high practice overheads, are forcing obstetricians out of the industry.

According to the South African Society of Obstetrics and Gynaecologists (SASOG), the annual cost of medical risk insurance for an obstetrician was R180, 000 in 2013 but this has escalated to R650, 000 per year for 2016. It’s expected to climb to R800, 000 for 2017 and if projections increase the way they are currently doing, obstetricians could soon be paying R1 million a year in insurance. Payouts for claims can be crippling and range between R10 million to R21 million. This is not sustainable for the industry, according to SASOG and other commentators.

Many have already left the industry. According to medical media digest, Medical Brief, Life Midmed Hospital in Middleburg, Mpumalanga, announced it is shutting its neo-native intensive care unit and its obstetrics ward because of specialists quitting in the face of soaring medical malpractice insurance costs.

If doctors can’t get the cover, they are preferring not to practice in areas where they are most likely set to get a law suit, or the threat of one. In Worcester in the Western Cape, for instance, all four obstetricians in private practice recently announced their refusal to do deliveries, due to high insurance premiums.

The sad thing is that it’s the obstetricians that are providing more affordable rates that are set to go first. “Eighty percent of obstetricians work at medical aid rates as patients can’t afford more, so doctors have to cope with paying their own overheads (administrative costs, salaries, rent, etc.) and to break even need to charge between R10 000 to R12,000 per delivery,” says Dr Johannes van Waart, president of the South African Society of Obstetricians.

He adds: “There are between 50 – 80 [obstetricians] that have got out of obstetrics this year and next year we can expect 100 more or so and one of the main reasons for this is because of the high cost of insurance.”

Why have we become such a litigious society?

Van Waart acknowledges that there are cases where doctors have to answer for the mistakes they make and that there are instances where negligence on the part of the practitioner can occur. He believes that it’s right for parents to claim in these instances and to go to court if need be. But he argues that there are bogus claims that the industry is facing too.

A lot of cases are settled outside of court for technical reasons and the lawyers charge 25% of the pay-out as a fee so it’s in their interest to get as much as they can in terms of a pay-out. “The reason why it’s such a crisis is that a lot of it is down to poor note keeping on the part of the gynaecologist. And in some cases babies get injured after the birth but this can’t always be proven – for example cerebral palsy can occur before delivery and the onus is on the doctor to prove that something didn’t happen during delivery,” points out Van Waart.

How SASOG want to improve things

Van Waart explains that SASOG want in no way to create a system that is unfair to patients or make it difficult for patients to claim if specialists do make a mistake. However, he feels that it is necessary for the industry to step in to create a mediation process to weed out the bogus claims.

He says he met with the Minister of Health, Dr Aaron Motsoaledi to introduce measures that will make it as safe as possible for mom and baby while also helping our industry. The measures that were suggested include:

  1. Protocols will be standardised. SASOG says certain protocols will be introduced in all labour wards and all obstetricians will have to comply.
  2. Maternal and perinatal morbidity and mortality meetings will be held in every private hospital on a bi-monthly basis and a minimum number will have to be attended in order to obtain/hold delivery privileges.
  3. All obstetricians will be Peer Reviewed, if needed, by a committee of experts appointed by SASOG.
  4. Each Obstetrician will have to make a discharge summary on all deliveries (on a standard form to be supplied) to be medico legally compliant.

Paediatricians will also be subject to following some protocols, including:

  1. Compiling a discharge summary for each delivery to be medico legally compliant.
  2. Each complete summary will be kept by the obstetrician and the hospital (on a central database).

The hospitals, meanwhile, will have to:

  1. Ensure completion of the documents.
  2. Ensure that morbidity and mortality meetings are carried out.
  3. Ensure that all protocols are available in the labour ward.
  4. Ensure that there is proper training of hospital midwives (with the help of the obstetricians).

They also want to:

  • Introduce a cap on payouts.
  • Structure payouts so that they are paid monthly or annually.
  • Have lawyers foot the bill if doctors are found not found guilty of negligence.
  • A mediation process to weed out the bogus claims before court proceedings can occur.

Finally, there’s also recommendations on how patients should be treated, specifically being made aware of their rights and the risks involved. They will also be made aware of the complaints route through the doctor, hospital and how to appeal to the (SASOG appointed) Mediation committee.

“This committee will be independent (consisting of academics and private practice O&G experts) and will provide an expert opinion on cases with doubtful outcomes, if requested, in order to provide an acceptable medico legal opinion, that should be a strong document in court. This mediation service will only be available to SASOG members,” explains van Waart in a SASOG newsletter.

Government co-operation?

When I asked van Waart if has the Health Minister’s ear about the industry’s concerns and his backing on the changes SASOG mean to introduce to prevent bogus litigation claims he relayed that the Minister was very positive about the suggestions.

But this may be because the State is facing the same problems as the private sector. According to a source, the Minister of Health is keen on addressing these claims because government is struggling with claims too, with around R49 billion estimated in 2016 and a projected R60 billion to be made in 2017, the Health Department can ill afford to cope with such an influx considering that this constitutes around a third of its health budget.

Riding in on a white horse?

Until SASOG get the green light to standardise the industry and introduce reforms that will weed out bogus claims the industry will still have to face high insurance costs and claim hungry lawyers. But at the time of writing a local entrant to the medical claims insurance space may create some breathing room by offering more realistic costs along with a team of experts that are familiar with the industry.

Local insurer Constantia Insurance Company Ltd says it has developed South Africa’s first comprehensive home grown medical indemnity insurance product called EthiQal. It says that until now SA doctors have been tied to a few offshore entities with not much in the way of competition. While medical risk insurance is expected to pass R800, 000 in 2017, EthiQal premiums for obstetricians is around R526, 000 (excluding VAT), with premiums for good risks capped until 2019. Indemnity is provided for up to R50 million per incident, with retroactive cover and run-off options available.

The good news is that one local insurer appears to have come in with more reasonable prices and SASOG is determined to regulate the industry to prevent and reduce the number of malpractice cases. But until obstetricians and other specialists switch insurers and the new rules are given the go ahead the industry will still be faced by a barrage of claims and costs.

If nothing is done, it will be the mothers and babies that suffer as experienced practitioners leave the industry to protect their finances, families and reputations. “We would all stop being obstetricians by 2020 if nothing changed,” warns Van Waart. But he adds that there are many doctors in the industry that are passionate about their jobs.

He points out that, for many, this is their livelihood and only source of income. But that even more so the majority of doctors care about their patients and love what they do. “There is negligence as we don’t live in a perfect world. But this must be fair to the patient, baby and doctors. We want to make it as safe as possible, and reduce the insurance as we don’t want to give up our jobs and leave,” says Van Waart.