When you have malpractice but no claim

By Mike Griffiths, Regional Director, Healthcare

Are you covered under a malpractice insurance policy when a treatment error has occurred but there has been no complaint from the patient or their family?

This is not the sort of question that occupies the minds of most visitors to Thailand, who instead arrive dreaming of clear blue waters, warm white beaches, delicious food, and famously friendly locals.  Others come for the somewhat less appealing purpose of surgical procedures, as Thailand has long been a major medical tourism destination.  Much lower treatment costs mean that many patients can access care that would be prohibitively expensive in their home country.  There are even some US health insurers who offer patients the chance to fly all-expenses-paid to Thailand for their procedure, and even add on a stay at a beach resort for post-op recuperation.

Where there is medical care, however, there is also the chance of that care going wrong.  So when I flew into Bangkok’s Suvarnabhumi Airport last month it was unfortunately not the beginning of a restful vacation.  I was there to meet with a hospital with a difficult problem they wanted me to solve.

The case involved a woman from the Middle East who had flown to Thailand for cancer treatment.  Upon admission an IV catheter was inserted into the patient’s arm to allow fluids to be administered.  The next day the patient began to complain of pain at the catheter site, and upon removal it was discovered that the patient had developed phlebitis.  Subsequently, symptoms of bacterial infection appeared at the catheter site.  The pathology report revealed very bad news – the patient’s arm was infected with Aeromonas Hydrophila bacteria.  Broad spectrum antibiotic treatment was attempted without success, the patient developed necrotizing fasciitis, and ultimately her left arm required amputation.  Unfortunately, the infection had progressed too far, and some two months after her original admission the patient passed away.

A very sad case, but from a malpractice perspective there was nothing to debate.  Hospital-acquired infections are a classic example of malpractice and are almost never defensible.  As I was hearing the case details, I began to wonder why I had been called in to assist.  It would hardly take an expert to advise the hospital that it was liable and should start considering what would constitute fair compensation to the family.  I asked if there was any other information we needed to consider?

There was: the patient’s family had not brought a negligence claim. 

My first thought was that, from the hospital’s point of view, this was the best possible outcome.  There are many reasons why patients or their families may elect not to sue their care providers, even in clearcut cases like this one.  Under such circumstances I advise clients to make a precautionary notification to insurers in case a claim materializes later.  Obviously, the medical bills should be written off, as pursuing payment for medical care that has injured a patient will almost certainly be the catalyst for a negligence claim.

In this case, however, the hospital was not prepared to follow my advice.  After contracting the infection, the patient had been warded in the hospital’s ICU for over two months, receiving daily blood transfusions and other treatments.  The outstanding medical bill totaled SGD750,000.  The hospital accepted that it could not pursue the patient’s family for payment, but they did expect to be able to claim under their malpractice insurance policy.  One can understand why they might think this, as malpractice insurance policies cover medical negligence.

However, the hospital was incorrect.

Malpractice insurance policies do not offer reimbursement to the insured hospital or doctor.  Instead, they fund the legal defence when an allegation of medical negligence is brought.  If the allegation is proven the policy will also pay for the settlement to the patient.  However, the trigger for activating the policy is not the act of medical negligence but the commencement of a claim.  Where no claim is brought, the policy is not activated.

Needless to say, this was not the advice the hospital was hoping to hear.  They pointed out that they could issue a demand for payment, wait for the patient’s family to counter-claim, and then lodge a claim.  

Many readers will recall the backlash that this penalty sparked amongst Singapore’s medical fraternity. The SMC was criticized on medical chat sites and in articles in ‘The Straits Times”.  A petition was launched and gathered 6,000 signatures before it was presented to Singapore’s Health Minister.  The matter was even raised in Singapore’s Parliament.

It was around this time that doctors began to ask me whether their malpractice insurance could be expanded to include SMC fines and penalties.  At that time there was no solution available, so I wrote an article that included the bad news:

As a starting point, we need to recognise that most fines and penalties cannot be insured, due to public policy implications. Imagine that Howden started offering insurance against parking fines.  Customers with “Howden Parking Fine Insurance” would park wherever they liked, secure in the knowledge that they would not have to pay any resulting fines. I doubt it would be long before I was called in for a friendly chat with Singapore’s Land Transit Authority. The 

point is that fines and penalties are intended to deter behaviour that is considered undesirable by society.  Protection against the financial impact therefore acts contrary to public policy objectives.

Medical Malpractice Insurance policies routinely exclude fines and penalties for this reason.

The public policy argument against insuring fines.  All perfectly correct, all entirely unhelpful.

The heat came out of the issue a little with the announcement of an inquiry.  Bowing to public pressure, the Ministry of Health announced the formation of a workgroup (chaired by Quek Boon Theng from The Legal Clinic – one of Howden’s panel solicitors).  The workgroup’s recommendations were eventually implemented via the Medical Registration (Amendment) Act 2020, and included these provisions:

These and the numerous other amendments all seemed to be steps in the right direction.  However, there was one glaring omission as the changes did not extend to the fines that can he imposed by the SMC. While the processes are now more robust, Singapore’s doctors are still exposed to the prospect of S$100,000 SMC fines.

The process of reviewing the SMC’s processes and introducing changes to the Medical Registration Act took a little over two years. During that time, we noticed a trend in other insurance classes; more and more specialist insurance policies were beginning to offer cover for fines and penalties.  

In Cyber Insurance, for example, it has become commonplace for insurers to cover fines levied under the PDPA. MedTech Insurance that covers companies developing medical devices and technology also offers cover for fines imposed by Singapore regulatory bodies.

Clearly the time to act had arrived, and so we did.  

With effect from 1 August, 2022, doctors insured with Howden are covered for SMC fines that relate to malpractice events.

Now, if our previous reason for not offering this cover was that it was contrary to public policy, it is reasonable to ask what has changed?

Whenever a Howden client doctor notifies a claim or potential claim, our first response is always to arrange a meeting to talk through the process and agree a response plan.  There are many factors to consider, but one of the most important is protecting the doctor’s reputation.  

It is very damaging to a practice than to have negative reviews posted on Google.  Even more damaging is to have a public record of an adverse finding by an SMC disciplinary tribunal.  Let’s face it, a prospective patient who searches a doctor’s name and discovers an SMC history of any kind is likely to go elsewhere.  Taking this into account, we see no prospect that a doctor will be careless in dealing with patients simply because he is insured for any fine the SMC may impose.

I should highlight here that the cover only applies to SMC fines relating to malpractice.  Should a doctor be fined for non-malpractice failures, such as failing to store medications correctly, then no cover will be available.  

In other respects, we are delighted to advise that for SMC fines this is the end of the road. 

Authored by:

Mike Griffiths
Regional Director, Healthcare
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