Car insurers will have to bail out NHS

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Frank Dobson, the Secretary of State for Health, will today announce a plan to force the insurance industry to bale out the NHS. Our correspondent reveals that the Government plans to charge pounds 100m-a-year to insurers for the treatment of victims of road accidents.

The National Health Service has long been the unseen victim of the 320,000 serious traffic accidents which happen in Britain each year. Hospitals often foot the bill for the treatment of victims in accidents caused by the negligence of another driver.

Today Mr Dobson will announce a programme to make the insurance companies of culpable motorists pay for the emergency medical treatment.

The Government is also preparing legislation to place the burden of responsibility on the insurance companies to pay out automatically, rather than waiting to be asked for money by hospitals.

Unknown to many motorists, the insurance industry already includes the cost of possible health charges in its premiums, although the companies are rarely asked to pay up.

Yet the Association of British Insurers said that if the Government extended the plan to make them liable for long-term medical treatment of victims it could lead to a major increase in premiums.

Tomorrow letters will arrive on the desks of all chief executives of NHS trusts, telling them to track back through hospital records to identify cases where money is recoverable.

Mr Dobson has told the trusts to "lodge claims and pursue them vigorously". Ministers believe that pounds 100m a year can be clawed back under the new arrangements.

Since road traffic legislation was introduced in the 1930s, doctors and hospitals have had the right to reclaim the costs of treatment. Yet since the establishment of the NHS in 1945, hospitals have rarely tried to recoup their money.

The Department of Health recently carried out a study of NHS trusts and was appalled at how many of them claimed nothing back from insurance companies, often because they were daunted by the legal process involved. By contrast, one trust which did pursue its costs recovered pounds 365,000 a year from this source.

A simple tariff is now being drawn up to charge insurance companies for different types of treatment, up to a ceiling of around pounds 3,000 a patient.

A department spokesman said: "The change in law will place the onus on the insurance company to pay up. At the moment a lot of NHS trusts are not pursuing the money they are owed because of the paper chase they have to go through."

Andrew Dismore, a Labour MP and lawyer, had first raised the idea of making the insurance industry help pay for the NHS in a paper written for the Law Commission. Last night he said the idea should now be extended to include the treatment of other patients, such as victims of accidents in the workplace.