Mr. Martin Varley:

I thank the Chairman and other members of the committee for the opportunity to address them on this important issue.

Acute surgical and medical services are provided through 50 public and 20 independent acute hospitals. There are approximately 2,600 approved public contract consultant posts in public hospitals, of which more than 200 posts are vacant or filled through temporary ad hocarrangements, more than 400 are consultants who practise exclusively in independent hospitals, and up to 600 are consultants who may practise on a part-time basis in independent hospitals. Independent hospitals carry out about 250,000 theatre procedures annually, accounting for about 40% of the total number of procedures requiring anaesthesia in acute hospitals. Consultants in private practice also provide care for medical patients and are responsible for a significant proportion of outpatient consultations.

All hospital consultants in public and independent hospitals are required to be indemnified against claims for medical negligence as a condition of their employment or practice rights. This will soon become a statutory requirement. The cost of clinical indemnity for private practice consultants has doubled for certain specialties in the past two years. In the past year alone, clinical indemnification charges payable by consultants in private practice increased on average by around 40%. Charges for those in high-risk categories, which include most surgical specialties and obstetrics, increased by between 54% and 68%. These increases in 2014 were on top of increases of between 49% and 67% implemented since 2008, including increases of up to one third in 2013 alone. The effect of the foregoing is that indemnity charges have increased to unaffordable levels for consultants in private practice, as highlighted by the following approximate annual charges. These are €337,000 for obstetrics; €104,000 for neurosurgery and spinal surgery; €97,500 for bariatric surgery, gynaecology, orthopaedics, excluding spinal surgery, plastic surgery and refractive laser surgery; €77,000 for cardiothoracic surgery, general surgery, ophthalmology, otorhinolaryngology, urology and vascular surgery.

Substantially increased indemnity charges have become increasingly unaffordable in the light of cuts in health insurer procedure fees of 20% or more since 2008. The ongoing uncertainty with regard to future indemnity costs is exacerbating the situation. The indemnification increases have been attributed to a higher frequency of claims in Ireland, increased awards in the courts and lack of progress in reforming the law in medical negligence claims.

The need to reform the law in this area was identified as an urgent requirement when the State Claims Agency’s clinical indemnity scheme was established over a decade ago. At the time, caps were introduced so that the cost of indemnity would be affordable. It was recognised at the time that €100,000 was regarded as the limit of affordability for obstetrics and the annual charge for surgery was about €30,000 at the same time. Today’s costs are around three times those levels, highlighting the extent of the problem that has arisen in the interim.

The cost of indemnification for consultants in Ireland is a multiple of that charged in the UK and other jurisdictions. This is primarily due to the fact that the UK reformed the law over a decade ago to address the issues which were driving up their costs and similar actions have been taken in other jurisdictions. In contrast, no reforms have been implemented here. If the law were eventually reformed, it would take several years to affect costs.

The net effect of the escalating costs of indemnity charges is that an increasing number of consultants have ceased private practice. An estimated 20 consultants ceased private practice in 2014 because the cost of clinical indemnity has become unaffordable, and more are planning to cease in 2015 if the unaffordable costs are not addressed. This includes cessations in general surgery, ENT, orthopaedics, pain medicine, neurology, gynaecology, urology and other specialties. Full-time private practice obstetrics is no longer viable in the State. It seems highly likely that many private practice vacancies will remain unfilled unless the escalating indemnity costs are addressed. If they are not addressed, the current crisis will result in fewer patients being treated in private hospitals, which currently treat around 40% of surgical patients requiring anaesthesia and a significant number of medical patients as well as being responsible for a high proportion of outpatient consultations. As a result, more patients will be forced to seek surgical and medical care in public hospitals, which had approximately 60,000 patients on their elective surgery waiting lists in October, an increase of 20% on October 2013. In addition, as we all know, 377,502 patients were awaiting outpatient appointments in public hospitals as of October 2014.

The working group on medical negligence, chaired formerly by Mr. Justice John Quirke and now by Ms Justice Mary Irvine, has submitted a report to the President of the High Court and the Minister for Justice and Equality with recommendations for the introduction of pre-action protocols, including the related draft legislation as outlined by Mr. Simon Kayll. The protocols, if introduced, would assist in reducing uncertainty and the costs associated with medical negligence claims, as has occurred in the UK. The working group has submitted an additional report on proposed rules of court for more intensive case management of medical negligence cases, including a requirement for the exchange of information within defined time periods, as applies in the Commercial Court, in order to reduce delays and costs.

In November 2014, MPS published a paper entitled Challenging the Cost of Clinical Negligence: The Case for Reform, which the IHCA supports. Mr. Kayll has outlined the details of that report to the committee. The association has written to the Minister for Health and the Minister for Justice and Equality requesting urgent reform of the law and implementation of the recommendations of the working group on medical negligence. I stress that reform of the law in this area represents the fundamental solution to the problem, but it will take time to implement and take effect. Separately, for that reason, the association has been in regular contact with the Minister for Health and his senior officials in the Department of Health and also with the State Claims Agency on proposals that could address the crisis in the interim, because reforming the law will take time and we are concerned about a significant exodus of consultants from private practice.

The Department has analysed the potential benefit of reducing the caps under three scenarios. Reductions in the caps would deliver lower indemnity charges for consultants, and this is one of the potential solutions that needs to be considered. The potential benefit of the State Claims Agency offering indemnity cover for consultants in private practice has also been discussed. It is the view of private practice consultants that this option should be assessed further in a committee with members from the Department of Health, the State Claims Agency and the IHCA. The establishment of the proposed committee is essential to advance the assessment of the most effective solutions to address the unaffordable cost of clinical indemnity.

While we understand that work has been advanced to assess a number of potential solutions in conjunction with the State Claims Agency, the unfolding crisis is expanding at a rapid pace. In the absence of an effective solution, a growing number of consultants are considering ceasing private practice or either retiring early or emigrating to where they can practise with affordable indemnity. Unfortunately, such developments will result in greater delays in treating patients and longer waiting lists in already extremely overstretched public hospitals. The association welcomes the opportunity to discuss these critically important issues with the committee and we look forward to answering questions from members.