Soaring damages payouts hit NHS

NHS HOSPITALS have recorded a 700 per cent increase in one year in the amount of money they earmark to cover the cost of medical negligence.

The rise, from pounds 7.5m in 1996-97 to pounds 63m in 1997-98, is highlighted in a survey covering hospitals in Wales. That increase has helped to take the total payouts forecast for clinical negligence in the principality at March 1998 to pounds 145m, almost twice the previous year's figure.

The National Audit Office, the spending watchdog that carried out the study, said the money will have to be found from spending on patient care.

Last October, a Welsh health authority, Dyfed Powys, paid pounds 3.28m to Sam Mansell, 11, who was brain damaged at birth in what was then the largest medical negligence payout in British legal history. It has since been exceeded twice and there are further cases expected to end in similar payouts, causing alarm across the NHS.

The escalating cost of the claims has left Welsh health authorities facing debts of almost pounds 25m at the end of last year, which will amount to almost pounds 50m by the end of this month.

Five NHS trusts had deficits of over pounds 1m each at the end of last year. David Davis, chairman of the Commons Public Accounts Committee, said: "The latest figures represent a substantial deterioration from a year ago and the position was far from good then.

"A major reason for the worsening performance is the doubling to pounds 145m of the cost of clinical negligence cases and it alarms me that there are still weaknesses in the way clinical failures are reported."

The Audit Office report says that most of the rise is accounted for by a leap in the estimated cost of "contingent liabilities" of 737 per cent.

Contingent liabilities are those where an accident has occurred but it is not yet clear whether it will lead to payment of compensation.

The Welsh Office said that the increase was due to "improvements in the processing of cases leading to their earlier identification". Although this accounts for most of the increase there is also a nationwide trend to increasing litigiousness in medicine, which has been apparent for more than a decade.

Sir John Bourn, the auditor general, says in the report that significant progress is being made in the effective management of risk within NHS trusts but concludes that further improvements are still needed in the reporting of incidents.

Mr Davis said the NHS in Wales had tried to minimise the financial impact of the negligence claims on patient care by taking out short-term loans and delaying payments to suppliers.

A spokesman for the Welsh Office said yesterday: "It is a pretty hefty increase [in negligence payments] but it will have to come out of health authorities' resources."

The Audit Office said it was now carrying out a similar study into English hospitals.