Mutual aims, mutual protection

THE 26 members who gathered in a building in Glasgow in May 1902 to form the MDDUS could hardly have imagined what lay ahead. With a total income in that first year of £231, eighteen shillings and three pence, they laid the foundation of a mutual organisation that was to grow and expand its operations until today we have an income of over £52m, with more than 30,000 members and assets exceeding £333m.

We are not, of course, alone in providing clinical indemnity and support to doctors and dentists. There are two other major medical defence organisations in the UK and together with them we count the vast majority of the country’s doctors and dentists as members. In addition there has always been the need for other smaller providers who offer protection where the main defence bodies have been unable to do so for one reason or another. However in recent years we have seen some new entrants to the medical indemnity market, targeted at either so-called "low-risk" doctors or those in specific medical specialties such as ophthalmology or plastic surgery.

The business models of these new providers seem to be similar in that they all target established doctors with “good” records and provide indemnity by a policy of insurance. Acceptance, or underwriting of the risk, is done by an insurance vehicle rather than by medical peers and all operate under a commercial imperative with the ultimate risk carrier seeking to make a profit.

Competition and the choice it brings are good for the market, and clinicians are more than able to judge for themselves how best to secure their medical defence needs. At MDDUS we have seen little impact from these new entrants, with very few members electing to change provider. However, faced with choice it is best that it is one well informed by the facts and so I wanted to highlight a few important features that underline some of the core values the Union believe to be important in the provision of medical defence, values that have stood the test of time over these past 109 years.

Clinical claims

The first feature to emphasise is that these new providers offer “claims-made” indemnity protection rather than the “occurrence-based” protection offered by MDDUS. Why is this important? The importance lies in the gap of time between when an event might have been caused and when it comes to light in the form of a claim being made. With many risks there is little or no gap between cause and effect. For example, if you have a house fire, the effect is obvious and immediate and a claim is made in order to get you re-housed.

In the world of clinical negligence, however, a significant period of time might elapse between cause and claim. Actuaries often work on an average of around 2.5 years between cause and claim but we know of many claims where a much longer period elapses. In one case the gap was well over 30 years. Clinical negligence is not unique in this respect and the same can apply to certain pharmaceutical risks, aerospace engineering and rail track maintenance. A drug is launched, the engine fitted to the plane or the track bolted together and everything may be fine for many years until the first adverse effect is detected, the plane malfunctions or the train leaves the track due to a faulty joint.

MDDUS has always believed that doctors are best served by occurrence-based protection because of this gap or "long tail" inherent in clinical negligence risk. Our occurrence-based indemnity provides protection for incidents that occur while a person is in membership, regardless of when the claim is made. This means that protection is afforded to a member even after they have stopped paying their membership, for example when they have retired or indeed died, provided that they were in membership when the circumstances giving rise to the claim occurred. In other words when the act, or acts, of negligence took place.

In contrast, claims-made indemnity only offers protection if the claim is made or reported during the period of membership and was caused during that same period or an earlier period of continuous membership. The real issue is what happens after a period of claims-made protection ceases. Either there is no cover or a person has to purchase “run-off” cover for a set number of years. In the case of some of these new providers, run-off cover is mentioned and in the case of others it is not.

The "good" doctor

Another feature worth looking at is the tactic employed by these new providers in targeting "low-risk" groups. The most obvious flaw in this approach is the notion that it is possible to select those who will not have claims. The reality, as we certainly know at MDDUS, is that "good" doctors can still find themselves involved in extremely expensive claims. In A Century of Care, the history of the MDDUS, the first convener of the Council from 1902 to 1910 is quoted as having said: "No member of the profession, however long he may have enjoyed immunity from attack and however confident he may be of the care with which he discharges his duties, can claim to be free from charges and claims against him. Such claims are made when they are least expected and deserved."

How true we have found these words to be over the years. It might only be a matter of time before these new providers experience a large claim from a doctor they had selected as a “good” risk and then it will be interesting to see the impact. Will they not renew that person or will prices have to rise for everyone? If we could predict who will have claims, we could not only reduce cost but much more importantly we could stop patients being injured. If it could be done, I am sure that we and others would be doing it.

Sound advice

Indemnity is not the only factor to consider. Sound advice from qualified and experienced medical advisers, support and representation when there are complaints, calls to attend a coroner’s inquest/fatal accident inquiry or referral to the GMC/GDC are all now essential elements of medical defence. An unhealthy focus on indemnity and claims of clinical negligence could easily lead someone to an organisation ill-equipped to provide the kind of rounded support that medical professionals so clearly need.

At MDDUS our members have access to a highly trained advisory service. All our advisers are medically or dentally qualified and available 24 hours a day to provide advice and assistance to members across the UK. They are backed by an experienced team of in-house lawyers who specialise in medico-legal matters. Our approach is to make our members aware of areas of potential risk and provide advice early on to try and prevent further escalation to regulators or the courts.

But perhaps the most important feature to mention is that MDDUS is a membership mutual. Our business is to serve the needs of all members rather than to generate a profit from them. MDDUS doesn't have shareholders and does not pay dividends. That means all the income generated by subscriptions is invested back into the organisation and member services, and in the maintenance of a healthy reserve to cover legal costs and claims.

This takes us right back to 1902 and those early pioneers who grouped together to help each other. That concept of mutual support is still at the heart of MDDUS and it is interesting to reflect over the past century that while new providers have appeared from time to time, none has stood the test of time. The need for mutual protection and the strength that comes from it has stood us in good stead and continues to do so.

Professor Gordon Dickson is CEO of MDDUS