Introduction by Croakey: It is time the Federal Government introduces a no-fault compensation scheme for all healthcare injuries, according to former senior manager at the Victorian Department of Health Vickie Veitch and former freelance correspondent Sarah Walls.
While the Government implemented a no-fault scheme for COVID-19 vaccine injuries in 2021, currently no scheme exists for other vaccine or healthcare injuries in Australia.
Last year, the Royal Australian College of General Practitioners released a position statement arguing that the COVID-19 compensation scheme should be extended to all vaccines.
Veitch and Walls met through sharing their traumatic healthcare injury experiences. They have started a national campaign for fairer laws and systems covering healthcare injuries.
Below, they discuss what is known about the impact of healthcare injuries, the potential benefits of a no-fault compensation scheme, including evidence of use in other countries, emphasising the importance of co-designing such a scheme with people with lived experience of healthcare injuries.
“It is time Australia remembered its heart and recognised severely injured patients as a legitimate trauma-exposed population requiring effective, coordinated support, acknowledgement and compensation,” Veitch and Walls write.
Vickie Veitch and Sarah Walls write:
In mid-November, we met the Prime Minister’s electoral office manager and delivered a letter from Vickie to the PM along with a petition for fairer laws and systems covering healthcare injuries and 10,000 signatures.
In addition, Sarah wrote to the Attorney General asking for an Inquiry into whether current statutes on medical negligence provide equality before the law and, if not, whether injured patients would be better served by a national no-fault compensation scheme.
If somebody is injured by a doctor, nurse or other health professional, there is no easy avenue for them to gain compensation. It is possible to sue a doctor, nurse or hospital, but only in a limited set of circumstances.
Most people find it too challenging, or do not have the time, health, energy or money to pursue a lengthy and intimidating litigation process.
You also have to prove not just that you were injured, but that your injury was caused by the health professional‘s negligence and that it was severe or permanent. The stigma associated with healthcare litigation is another major deterrent.
Healthcare injuries are common, but it is difficult to know exactly how common. There is widespread under-reporting of adverse patient safety events across Australia and the reporting and response systems are siloed.
We know that about 900,000 people suffer complications from care in hospitals each year, and that some of those complications are severe. About 80,000 people each year are left with some degree of permanent disability and about 29,000 have their lives cut short by healthcare.
The national data on the rate of medical negligence claims is too old to be relied upon: in 1995 the Professional Indemnity Review estimated that there were 230,000 preventable healthcare injuries each year and fewer than 2,000 negligence claims. Current Victorian data shows 3,500 serious adverse events reported annually and 250 negligence claims filed.
Nearly half of medical negligence claims are discontinued, i.e. they fail. This means that only about one to three percent of healthcare injuries are compensated.
Compared with similar countries that rely on the courts to determine compensation, Australia has a relatively high number of claims, but relatively little money goes to claimants.
No-fault compensation scheme
The solution to this issue is to set up a national no-fault compensation scheme for people injured through healthcare, and leave the litigation system in place for people who need to sue for serious negligence-related healthcare injuries or death. There are many benefits:
- No-fault compensation schemes produce quick results – claims are usually processed within eight months, rather than five years or more.
- No-fault compensation schemes are relatively efficient, with 12-18 percent going on administrative costs and the rest going to compensation.
- No-fault compensation schemes are less stressful for all parties, and support a continuing relationship between the health provider and the patient, even if there has been an injury.
- No-fault compensation schemes allow hospitals and health professionals to apologise more readily with a reduced fear of litigation.
- Claims outcomes would be used to improve patient safety (instead of being subject to non-disclosure agreements, which is what occurs now when claims are settled out of court).
- No-fault compensation schemes can reduce overall healthcare costs.
Australia already has a no-fault compensation scheme – the scheme for COVID vaccine injuries, which was introduced in August 2021. The Royal Australian College of General Practitioners argues that this compensation scheme should extend to all vaccines.
A number of countries operate no-fault compensation schemes for healthcare injuries.
New Zealand (introduced in 1974), Sweden (1975), Finland (1987), Norway (1988), Denmark (1992) and Iceland (2001) all have comprehensive no-fault compensation schemes for healthcare injuries.
France (2002) and Belgium (2010) have no-fault compensation for serious healthcare injuries not covered by fault-based liability.
Japan has no-fault compensation for vaccinations (1976), adverse drug reactions (1979), infected blood transfusions (2008) and birth-related injuries (2009).
In April 2022 a UK House of Commons committee recommended no-fault administrative compensation for injuries incurred in the National Health Service.
All these countries have universal health care and a solid social security system, as Australia does.
In most of these countries, injured patients can still pursue litigation, but few do.
It is sometimes argued that no-fault compensation is less effective than litigation in identifying poor practice, and so contributes less to patient safety.
But the reality is that there is no direct relationship between the type of compensation system and improvements in patient safety. Both systems aim primarily to provide compensation.
The most trenchant criticism of compensation schemes is that they deliver inadequate financial outcomes.
A negligence claim is considered likely to gain a better financial result, despite being subject to stringent statutory thresholds and caps on damages.
Any new scheme needs to avoid inappropriate and arbitrary thresholds and caps, and be designed so that it permits litigation in cases of obvious merit. We also need a system that avoids mistakes in other compensation schemes both here and internationally.
A no-fault compensation for healthcare injuries has twice been recommended in Australia. In 1974 the Woodhouse Committee recommended it, but the Whitlam Labor government lost power in 1975 before the recommendation was implemented.
In 2011 the Productivity Commission recommended establishment of a National Disability Insurance Scheme (NDIS) and a National Injury Insurance Scheme (NIIS).
The proposed NIIS would have provided no-fault compensation for catastrophic injuries, such as quadriplegia, acquired brain injuries, spinal cord injuries, burns or multiple amputations, and included a medical treatment injury stream.
It was supported by the Australian Medical Association. However, the Labor government lost power in 2013 and only the NDIS was subsequently established.
Issues to consider
There are a number of issues to be considered in designing a no-fault administrative compensation scheme.
To be successful, any scheme needs to be co-designed with injured patients, so that their lived experience informs every aspect of its development and implementation.
- What should the threshold be based on? No fault (i.e. a “treatment injury” standard, as in New Zealand)? Avoidability (as in Sweden and Denmark)? Acceptable risk?
- What criteria should be used for eligibility? How should eligibility be determined?
- Should the awards for damages be equivalent to what is received in a negligence-based system? Should there be caps on damages?
- Lawyers play an important advocacy role that assists claimants to navigate the complex workplace and road trauma compensation systems. What role should lawyers play in a no-fault compensation scheme for healthcare?
- What relationship should there be between a no-fault compensation scheme and the current negligence-based system? Should claimants have the choice between the two systems? Or should it be mandatory to go through the no-fault compensation scheme before lodging a negligence claim?
- While the National Disability Insurance Scheme (NDIS) covers allied therapy and care costs for those with significant permanent disabilities, it does not cover economic loss or the impact of pain and suffering. A no-fault compensation scheme would cover these areas and ensure proper acknowledgement of the injury. What relationship should there be between a no-fault compensation scheme and existing services such as Medicare and the NDIS? How do we ensure that all these schemes work together in the interests of claimants without unnecessary duplication?
- How should the healthcare compensation and regulatory systems work together to improve patient safety outcomes, without disadvantaging either injured patients or healthcare providers?
- If a no-fault compensation scheme for healthcare injuries is introduced in Australia, should it initially be trialled with a category of treatment injuries, such as catastrophic injuries, sentinel events, severe neurological injuries, birth-related injuries or pelvic mesh injuries?
Call for recognition
While other countries were moving in the direction of simpler, fairer compensation for injured patients, Australia moved in the opposite direction. In the early 2000s, it substantially reduced access to litigation-based compensation through changes to tort laws.
It is time Australia remembered its heart and recognised severely injured patients as a legitimate trauma-exposed population requiring effective, coordinated support, acknowledgement and compensation.
About the authors
Vickie Veitch and Sarah Walls met by sharing their traumatic healthcare injury experiences. Vickie was a senior manager with the Victorian Department of Health, leading a highly specialised unit that reviewed hospital related deaths and avoidable harm, when she suffered life-threatening healthcare injuries in 2017. Previously, she was a nurse, midwife and hospital safety and quality manager. She is the Founder of FairCare Alliance, a new charitable organisation that aims to support and advocate for injured patients in Victoria. Vickie currently works at Safer Care Victoria however, her opinions are her own.
Sarah was a freelance correspondent for The Sydney Morning Herald and The Age in New Caledonia when a severely disabling healthcare injury in 1990 ended her journalism career. She had previously worked as a radio producer, newspaper feature writer and an ABC Four Corners reporter. Over the next decade, she lobbied successfully for vital patient safety improvements, ensuring others did not risk the same injury.
Vickie Veitch and Sarah Walls would like to acknowledge editorial support provided by Dr Mark Ragg.
See Croakey’s archive of articles on safety of healthcare.