No-fault, no difference: no-fault compensation for medical injury and healthcare ethics and practice

Abstract

Overuse of medicines and medical interventions, patient safety, and rising costs are among the greatest challenges facing modern health care. Because medical malpractice systems are thought to be a driving factor, it is logical to consider alternative medical regulatory structures.1 New Zealand’s experience with no-fault compensation for medical injury and separate medical professional accountability processes may provide insights. Now that the no-fault system has been fully in place for a decade, it is timely to reflect critically on potential lessons for health systems around the world. The three main functions of a medical regulatory system are to provide compensation for injury, accountability, and deterrence, and mechanisms that enable learning. In 1974 New Zealand introduced a publicly-funded accident compensation scheme with the goals of minimising the incidence and impact of injury. The scheme provides assistance with the cost of treatment and rehabilitation for all personal injuries, regardless of fault, and in exchange bans suing for compensatory damages. Medical injury has always been covered under the scheme. Consequently, in New Zealand there is no culture of suing doctors for damages and doctors pay comparatively low medical indemnity fees of around £790 per annum. Doctors are held to account under separate processes including the Medical Council of New Zealand’s competence and fitness to practise processes, an independent patient complaints system, and a separate disciplinary process. The patient complaints system was introduced in 1994 on recommendation of a 1988 government report that found wanting the prior accountability processes in an environment where patients were unable to sue.2 In …