By: Asia Ifill
Single payer healthcare systems occur in countries where the government pays for health care of every citizen. Single payer systems empower the government to negotiate lower prices for healthcare and prescription drugs. The drawbacks of single payer systems include problems like long wait times and limited access to treatment. Single payer health systems also usually include high startup costs that are usually covered with increased taxes or government debt.
New Zealand follows a single-payer health care system where the government pays for the majority of healthcare cost using public tax money. All New Zealand citizens and permanent residents are eligible for public health care. Roughly 85% of healthcare in New Zealand is publicly funded. Private health insurance is still available to citizens and visitors who are willing to spend more money in exchange for shorter wait times and wider range of prescription medication. Regardless of public or private health insurance, everyone in New Zealand falls within the same compensation scheme for medical malpractice and personal injury.
In the 1970s, New Zealand discarded personal injury torts as part of a scheme to broaden disability insurance. The New Zealand Accident Compensation Act of 1972 created an administrative system known as the Accident Compensation Corporation (ACC). Under the ACC, injured patients receive government compensation, but they also relinquish the right to sue for damages. The ACC is funded through general taxation where medical injuries cost the government roughly 29 million dollars. The ACC pays approximately 40% of claims filed. Compensation under the ACC varies from rehabilitation costs, lost earnings, or a one-time lump-sum payment of 70,000 dollars. Medical malpractice claims filed with the ACC are often evaluated under the ‘treatment injury’ standard: (1) an injury has occurred that results in physical harm to the patient; (2) the injury was caused by treatment; and (3) the injury is not a necessary part or ordinary consequence of treatment. The drawback of the ACC system are that many believe the compensation is inadequate and many people are left uncompensated.
The United Kingdom also follows a single-payer health care system in the form of the National Health Service. The NHS was established in the United Kingdom in 1948. The United Kingdom was the first western country to offer free medical care at the point of use to the whole population. The NHS provides health care based on a number of statutory trusts created by the Secretary of State. When each NHS trust is created it assumes debt capital, which means that it borrows money as a form of financing. The NHS serves as a collective pot where taxpayer dollars are used to pay off the debts taken out to finance the system. When the NHS was first established, the doctrine of ‘Crown Immunity’ prevented private citizens from bringing claims the NHS because it was an extension of the government. This all changed when a severe outbreak of salmonella food poisoning spread at an NHS hospital, which caused the public to pressure the government to hold the NHS accountable. As a result, Crown Immunity was removed from the NHS in 1991 when the National Health Service Community Care Act was passed.
Unlike the healthcare system in New Zealand, the NHS is not immune to medical malpractice claims of private citizens. Damages paid by the NHS as a result of medical negligence have soared in the last decade from 900 million pounds to 2.2 billion pounds. Proponents of private claims against the NHS argue that they are essential to compensate victims and maintain the NHS standard of care by deterring negligent treatment. A focus on assigning liability may be appropriate when individuals bring claims against private healthcare systems. But medical malpractice claims focused on liability may be inappropriate for the wider public who benefit from the NHS. Although private claims are likely meritorious given the NHS is notoriously understaffed and underfunded, these claims may worsen the quality of care by detracting from the funding of the collective endeavor – the NHS. In fact, estimates indicate that the 2.2 billion pounds spent on paying medical malpractice claims could be used to increase the salary of all NHS staff by 5%, which would likely improve the standard of care. As a result, private medical malpractice claims against a public healthcare system likely compensates a few at the expense of the many. Worse still, medical malpractice litigation is so expensive and unpredictable that it is referred to as the ‘liability lottery.’ In 61% of successful medical malpractice claims against the NHS, the legal costs are higher than the payout.
Healthcare in New Zealand and the United Kingdom are similarly situated single payer systems that approach medical malpractice claims in strikingly different ways. Although the ACC system in New Zealand likely falls short regarding fully compensating injured patients, it clearly provides a better structure for predictable and fairly distributive compensation. In contrast, medical malpractice claims raised against the NHS have the potential to provide a handful of lucky plaintiffs with payouts if they can withstand high litigation costs. Still, prioritizing individual retribution at the expense of the limited resources used to fund a public endeavor seems shortsighted. If the NHS is to survive, it will likely need to take a lesson from the ACC for medical malpractice liability.
