Medical Misadventures: Should Patients Be Compensated for Managerial Failure?

Listener: 26 February, 2005.

Keywords: Health; Social Policy;

An earlier column Accidents Will Happen (April 17, 2004) commended the proposed change in the ACC compensation criteria from medical error (which involves fault) and medical mishap (with a rare and severe outcome) to the situation where unexpected treatment injury occurs. The column worried that the opportunities the new scheme promises for prevention might be overlooked. I gather the ACC is instituting a programme to improve the medical safety cultures of health professionals. Great. As the column concluded, the biggest gains from the reform may be that there will be less medical misadventure.

However, the new scheme has carried over a provision from the current scheme whereby patients are not entitled to compensation where their injury is due only to a lack of resources.

Consider two women going for a breast examination. In one case, the doctor’s diagnosis misses her malignant tumour, and her surgery is delayed for six months. If, as a result of the delay, some treatment injury occurs, she will be entitled to compensation. The doctor would probably be referred to the Health and Disability Commissioner, who may require the undertaking of further training.

The second woman’s doctor identifies the malignant tumour, but, because of resource shortages, the treatment waits six months, about three times more than what the experts recommend. But she has no compensation entitlement because of the legislation’s resource shortage exemption, although this woman has exactly the same treatment experience as the other. Despite a managerial failure to provide the resources, there is no mechanism under the new scheme to compensate the victim for the failure or to assess the competence of the managers who failed, nor is there any incentive to improve managerial performance.

The apparent justification for exempting resource failures is because the fiscal exposure could be enormous. Where might it end? Someone halfway up a mountain has a cerebral haemorrhage. There is no nearby ambulance or other medical treatment available. Should they be entitled to compensation? Yes, if the brain injury was due to an accident. Although, as far as health professionals are concerned, any failure to treat can be a source of treatment injury, the law overrules the health professionals’ ethic.

You may think this is an example of the “managerial exemption”, that curious phenomenon whereby managers hold their subordinates to higher standards of account than they hold themselves: “Do what I say, not do what I do.” In this case, the statute places greater accountability on the health professionals than it does on those who manage them.

But if treatment injury cases involving resource shortages are not covered by ACC law, they may be covered by common law. In which case, some resource managers may find themselves going through a lengthy and expensive process of litigation, with their hospital facing damages many multiples of the ACC compensation.

The sensible thing would be to revoke that statutory exemption, but include a test of reasonableness to avoid the need for standby ambulances up mountains. However, this leaves the scheme open to a high degree of fiscal exposure from the failure to provide treatment resources. A medical specialist and I recommended to the Parliamentary Select Committee on the reforming bill that the clause should be revoked in, say, three years. In the interim, the health system would gear itself up to meeting the resource standards that experts recommend as reasonable. A piece of work I have done, using radiotherapy for breast cancer as an example, shows that reducing waiting times can give spectacular returns from reduced treatment injury. It is not just one person coming off the waiting list, but everyone after gets treated earlier, and so is less likely to suffer.

My hope is that shortly after the new scheme is begun, the government will take the next step of investigating how it can remove the unfair resource exemption from the legislation. As for the current reform, the biggest gains may be from preventing the treatment injury that arises from excessive waiting.