Annual Medico-Legal Society Event

06 Nov 2004

By Dr Balaji Sadasivan, Senior Minister of State for Information, Communications and the Arts and Health

Venue: Grand Hyatt Hotel

Dr Wee Keng Poh, President Medico-legal Society,

Doctors and Lawyers,

Members of the Medico-legal Society of Singapore

Ladies and Gentleman,

I am honored to address an audience which consists mainly of learned lawyers and distinguished doctors. The cordial relationship between our two professions is long-standing and lawyers and doctors have always shown courtesy to each other. This was the case when a doctor and a lawyer in two cars collided on a country road. The lawyer, seeing that the doctor was a little shaken, helped him from the car and offered him a drink from his flask. This was a drink of brandy. The doctor accepted gratefully. After taking a drink, the doctor handed the flask back to the lawyer. The lawyer screwed back the cap of the flask. "Aren't you going to have a drink yourself?" asked the doctor. "Sure;" said the lawyer most cordially. "I will have the drink after the police leave." This is proof of the civil relationship between our two professions.

The title of my address is called "Towards Rational Healthcare." It is hard to define what constitutes a rational system. In General Motors v Trans Canada, in court it was stated that if an object looks very much like a duck, walks very much like a duck and quacks very much like a duck, there is a high probability it may well be a duck. Similarly, if a system looks rational, sounds rational and works in a rational way, we can say with a high probability that the system is rational.

Everyone wants a rational healthcare system. We all agree on this. The public wants the latest and most expensive treatments available. This is a rational. The public also wants healthcare that is affordable. They would like their out-of-pocket healthcare expenses kept low. They do not wish the compulsory Medisave contributions to be increased. This is rational. They would like medical insurance or the government to pay for healthcare. This is again rational. But the public would also like insurance premiums to be low and would not like the government to increase GST or introduce other taxes to fund the cost of healthcare. This, too, is rational.

Doctors wish that they could practice in an environment where cost is not a factor and where they could freely use the most expensive drugs and treatments. The doctors are rational. They also sometimes complain that their contribution and intellect is not matched by their pay. Lawyers believe they have a duty to protect the legal rights of patients and that they should try and ensure that every infringement of these rights is looked into and legally addressed. The lawyers are rational. They too like the doctors sometimes feel that their contribution and intellect is not matched by their pay.

In moving towards a rational healthcare system, we must address the rational changes that the various stake-holders want and since the rational changes wanted are mutually incompatible, the only rational solution is to try and balance the needs of all the stakeholders. Hence a rational healthcare system basically is a balancing act as it tries to find a balance between many needs - a balance between the patients wish for the best treatment and the ability of the patient to pay for the treatment, a balance between the amount the patient pays directly and the amount he pays indirectly through taxes and GST, a balance between the legal rights of the patient and the cost to healthcare posed by medical litigation, a balance between the doctors wish to use all treatments and drugs even if it is not proven and the need to ensure that such efforts do not bankrupt the patient or the healthcare system. Rational healthcare is therefore similar to the Confucian anagram. Healthcare must have the correct balance of the Ying and Yang to be rational.

When there is no balance, the healthcare system slides into a crisis. Then, political leaders will be forced to deal with the issue. Healthcare has been a recurring issue in the last few US elections. In the recent US elections, both candidates had to deal with several healthcare issues including medical litigation and its effect on healthcare cost. Senator John Edwards and Vice president Cheney debated this issue during their debate. This is an indication that the American public now appreciates that there is a problem and wants some kind of reform. We should learn from the US experience and do our best to avoid getting into the same type of crisis. This would certainly be a rational thing to do.

President Bush had strong words on medical litigation reform. He said "For the sake of affordable and accessible health care in America, we must have a limit on what they call non-economic damages -- I propose a cap of $250,000." President Bush predicted that, without such changes, excessive awards will continue to drive up insurance costs, will put good doctors out of business, and will run them out of the community. Bush also called for limits on who can be sued. He said "A lot of times, these lawyers will sue everybody in sight in order to try to get something. In cases where more than one person is responsible for a patient's injuries, we need to assign blame fairly." He added that there are too many lawsuits filed against doctors and hospitals without merit, and even "junk" lawsuits can be expensive. He noted that it costs money to fight off a junk lawsuit, and oftentimes, in order to avoid litigation and oftentimes to cut their costs, docs, and therefore the companies that insure them, just settle. As a result, he said, insurance rates are "going out of sight." Fear of lawsuits has also boosted the cost of health care by leading doctors to practice "defensive medicine, ordering unneeded tests and procedures. Bush added that such practices raised the federal government's health care costs by at least $28 billion a year. President Bush has won the elections and he has four years to implement reforms.

Sen. Edwards, too, acknowledged during the debates that there were too many lawsuits. The Kerry-Edwards plan attempted to address the issue by requiring medical liability cases to be reviewed by "independent experts" before being allowed to proceed to trial.

In Singapore, there was an explosion of medical litigation during the last decade. Between 1990 and 2000, the number of malpractice claims notified to Medical Protection Society went up by 800%. It is now stabilizing. Premiums also went up and may continue to go up for a few more years to compensate for our past excesses. A key factor in the stabilization of malpractice claims was the re-affirmation of the Bolam principle in Singapore.

The judicial standard of care is based on Bolam which established the principle that a doctor is not guilty of negligence if he acted in accordance with a practice accepted as proper by a responsible body of skilled men in that particular art. Lord Denning explained the rationale for the principle in Roe v Minister of Health: "we should be doing a disservice to the community at large if we were to impose liability on hospitals and doctors for everything that happens to go wrong. We must insist on due care for the patient at every point, but we must not condemn as negligent that which is only misadventure." In Hatcher v Black, he pointed to the risk of not following Bolam. He said "a doctor examining a patient, or a surgeon operating at a table instead of getting on with his work, would be forever looking over his shoulder to see if someone was coming up with a dagger - for an action for negligence against a doctor is for him like unto a dagger."

The courts in the US have never accepted the Bolam principle. This is a major cause for their current crisis. The Government Accounting office did a study of 5 states' Nevada, Pennsylvania, West Virginia, Florida and Mississippi in 2002 to evaluate the effects of medical litigation. They found healthcare access problems cased by high premiums. For example, they found that some women in Mississippi had to travel 65 miles to deliver their baby because obstetric services were reduced. They found that premiums had become very expensive. In some parts of Florida, annual premiums for OB/GYN had exceeded $200,000. Emergency services were also reduced as a result of the high premiums. Last year the New England Journal of Medicine reported that 18 states in the US were facing a crisis.

While the rise in medical litigation cases by itself is alarming, the fact that only 16% of those going to trial were ruled in favor of the plaintiff illustrates the problem that doctors and hospitals face. Because 100% of the time, the physician and insurance company are forced to pay large legal fees to defend a lawsuit, frivolous or otherwise, the litigation process increases their cost of providing health services. The response in the US has been for the State and Federal governments to pass legislation to try and control what the courts can do, by limiting the awards or by limiting the ability of cases to reach the court. This is a messy solution that has not worked well so far.

Australia in recent years has followed the American path. In the 1993 case of Bolitho, the court ruled that it is may be necessary sometimes for the judge to consider and evaluate expert medical evidence. After the Bolitho judgment, the Hon Justice Michael Kirby stated that so-called Bolam privilege had been rejected as part of the law of Australia. He justified this on the basis that the burden of doing this, which is an increased likelihood of payouts to plaintiffs, would fall on insurance. But large insurance payouts must mean high premiums which in the end must be paid for by the public. No one consulted the Australian public on who should pay for the increase in premiums. Australia and in particular New South Wales saw a significant increase in insurance payouts, especially in relation to liability for personal injury. This is one of many factors that led to the collapse of one of Australia's largest insurers, HIH in March 2001 with losses of over $3 billion. This is one of Australia's largest corporate collapses. The government bailout may eventually cost at least a billion dollars. Of all common law jurisdictions, only California has more medical negligence suits than Australia. In 2002, the largest medical insurer, United Medical Protection went bankrupt. Again the government had to bail out the company and provide interim medical cover. The lesson to learn from the Australian experience is that court awards, insurance premiums and fees paid either directly by the public or indirectly through taxes collected by the government are linked. All three - court awards, insurance premiums and healthcare fees must move in tandem for balance to be maintained. If one shifts without any change in the other two, the system will collapse.

During the last decade, there was an expansion of the boundaries of negligence in Singapore. The scope of the legal duty of the physician was expanded in case of Pang vs Lim. The case also allowed damages for emotional distress. The court expressed its view that it had no fear of a deluge of litigation in Singapore. The Singapore courts had also felt unconstrained by medical opinion. In Carlos Francisco v Thng, the court opined that the judge has to exercise his own critical faculties and not simply be swept along by the opinion of the medical experts. Finally, in Gunapathy v Khoo, the Hon Justice Selvam emasculated Bolam when he stated: "So the doctors disagreed on this issue as they did on the other issues. Alexander Pope asked in 1732: Who shall decide when doctors disagree? Today there is a clear answer to the question: the judge." The erosion of the Bolam principal makes it easier for plaintiffs to prove their case. The weakening of Bolam, the high publicity given to medical law-suits, the forums that lawyers organized to promote awareness of patient rights and the expansion of medical litigation departments in law firms all contributed to the growth of the medical litigation industry in Singapore in the 90s.

Shortly after I was elected as a member of parliament, a constituent came to see me at my meet the people session and said he needed temporary financial assistance. I asked why temporary? And why the need for financial assistance? He said he had back pain and he had decided to sue his doctor, and his lawyer was going to ask for several hundred thousand dollars. He was sincere in his belief that he will obtain such sums of money. And as for the financial assistance - he needed the financial assistance to pay the lawyer. To him this was a small investment that appeared to promise good returns. I referred him to Legal Aid. This was the public's perception about medical litigation shortly after the $2.5 million award in the case of Gunapathy.

The Court of Appeal reversed the High court decision in Gunapathy. It stated that the doctor would not be negligent simply because his conclusion was different from that of the judge. The Court did not think Bolam should be emasculated in content and application. With the reversal of the judgment in Gunapathy v Khoo, Bolam was restored and the growth of the medical litigation industry in Singapore stabilized. The medical profession was relieved but the legal profession was a bit disappointed.

In determining the optimum balance between the views of the two professions, we must look at it from the point of view of the patient to determine where the balance should be. The public while respecting both professions, has a healthy understanding of the economic forces that influence both doctors and lawyers. Popular literature frequently warns the public about both professions and the need for members of the public to look after their own interest.

Hilare Belloc wrote about doctors:

"Physicians of the utmost fame were called at once; but when they came They answered as they took their fees,There is no cure for this disease"

And John Gay wrote of lawyers in the Begger's opera:

"A fox may steal your hens, Sir, A whore your health and pence, Sir, Your daughter rob your chest, Sir, Your wife may steal your rest, Sir, A thief your goods and plate. But this is all but picking, With rest, pence, chest and chicken; If ever was decreed, Sir, If lawyer's hand is fee'd, Sir, He steals your whole estate".

Members of the public have a right to sue. The right to seek legal redress is a basic right of citizens in civilized societies where the rule of law prevails. Negligence does occur. Gross negligence can occur even in the best hospital. A few years ago, a famous Indian actress took her mother to the United States for brain surgery at a famous hospital. The doctor saw the MRI of the wrong patient. Because it had an Indian name, he assumed it was the MRI of the actress's mother and he removed the wrong part of the brain with devastating consequences to the patient. Surely, in such a case, the patient has a right to sue and to be compensated. The threat of law suits has helped change medical attitudes and led to safer treatment. For example, in surgery, often, the arm or leg or breast that should be operated is now marked in ink the day before surgery so that the surgery is done on the correct side. The fear of medical litigation is also altering the paternalistic attitude of doctors and more doctors are now informing patients about their choices instead of making the decision for the patient. This is good for patients. While negligence should be compensated, bad outcome should not be equated with negligence. There has been great progress in medicine in Singapore. We can now expect to live to eighty. But on average we will also spend one tenth of that life-time, i.e., about 8 years, disabled as a result of disease, the failed treatment of the disease or the treatment itself. So all of us, if our death is not sudden, will very likely spend a few years disabled before death. At some point in our life, a so called bad outcome is not unexpected and represents the natural progression of our life cycle. A legal system that attempts to compensate for bad outcome is not sustainable. Even if a society decided to create a system of compensation for bad outcome, litigation would not be the best way to compensate bad outcome because it is an inefficient system of compensation. It is estimated that for every dollar paid into the medical malpractice industry, less than 20 cents is returned to patients as compensation. About 80 cents goes to the legal and insurance systems. Even when litigation is successful, and there is an award, in the United States, on average, after the legal fees are paid, the patient receives less than 50% of the award. In Singapore, the public has no easy access to information on the cost of a failed medical litigation to the plaintiff. Or how much of an award is actually left for the patient after legal costs are paid in the cases where the plaintiff has been successful.

For the healthcare system, the great danger posed by excessive litigation is defensive medicine. The Court of Appeal in Gunapathy v Khoo recognized this and said: "Excessive judicial interference raises the specter of defensive medicine, with the attendant evils of higher medical costs and wastage of precious medical resources." The chief justice Yong Pung How said "We often enough tell doctors not to play god; it seems only fair that, similarly, judges and lawyers should not play at being doctors."

Defensive medicine is the practice of ordering treatments, tests and procedures for the purpose of protecting the doctor from criticism rather than for diagnosing or treating the patient. A good example of the effect of litigation on medical practice is the case of Whitehouse v Jordan. In this case, an obstetrician attempted a forceps before doing a Caesarian Section. The child was subsequently found to have some brain damage. The doctor was sued for the delay in doing the Caesarian section. By the time the case made its way through 3 levels of the legal system, and before the court found for the doctor, obstetric practice had changed in UK. There was a rapid rise in the Caesarian Section rate and despite the court's decision in favor of the doctor, the decision was too late. Medical practice had changed permanently. Defensive medicine was entrenched and the courts final decision was too late to reverse the effects of the case.

This is what concerns those of us who worry about healthcare cost - the permanent change to a more expensive way of providing services without necessarily benefiting the patient or improving outcome. For example, eye ailments like red eyes are an extremely common problem that was usually treated by GPs with some eye drops. This is convenient and affordable to the public. In Yeo Peng Hock v Pai Lily, the patient was awarded damages for loss of vision in one eye. The amount was less than $50,000. This is not a significant amount by itself. Any increase in insurance premiums that the award would cause would also be insignificant. The biggest financial impact of this case is the defensive medicine that it gives rise too. Eye surgeons reported an increase in the referrals of patients to the specialist clinics after the case. Even today, there is a problem with unnecessary referrals to the specialist clinics. One Eye doctor told me that more than half the patients referred to the specialist eye clinics at SNEC need not be referred and that the complaints could have been easily looked after by a GP. Patients pay much more for the same consultation and treatment when it is performed by a specialist. This type of permanent shift in the behavior of doctors drives healthcare costs up. Patients suffer when doctors start practicing legally safe expensive healthcare rather than a patient-centered cost effective healthcare.

How do we protect the public from the high cost of excessive litigation? The Australian experience shows that when the court awards , insurance premiums and patient's cost of healthcare are not clearly linked, medical litigation goes out of control causing insurance companies to collapse and the government to intervene and bail out the companies and policy holders. So to achieve a sustainable balance, these factors should be clearly linked.

Today, in Singapore, patients can receive compensation for damages from negligence from the courts. The courts by re-affirming Bolam ensure that compensation is limited to damages from negligence and not for bad outcome. The insurer pays out the awards and collects premiums from the physicians. The premiums collected from doctors in Singapore are used to cover legal costs and compensation to patients in Singapore. Our clusters today pay a significant portion of the insurance premiums of doctors working within the clusters. Premiums will rise if the number and quantum of awards go up. Hospitals will incur addition costs in having to pay higher premiums. Eventually this will lead to fee increases and patients will pay more. This is a balanced sustainable cycle with money moving from patient to the hospital as hospital fees, and from hospital to insurance company as premiums and from insurance company to patients as compensation.

When the Australian Insurance company United Medical Protection collapsed because of the large awards made by the Australian courts, Singapore doctors lost their cover even though they had paid premiums for this cover. The Australian Government intervened to provide cover for Australian doctors but the cover was not extended to Singapore doctors. In effect, premiums collected in Singapore have been used to pay Australian plaintiffs. Since the main insurer in Singapore, the Medical Protection Society provides medical protection for doctors in several countries, there is a great temptation to hope that when courts make high awards, it will be paid from MPSs reserves collected from doctors in less legally aggressive jurisdictions. We have 'discussed this with MPS and going forward, MPS has said that awards and legal costs incurred by MPS in a jurisdiction will be paid for from premiums collected within the same legal jurisdiction.

A problem highlighted by Senator John Edwards during the US elections was the problem of frivolous law suits. He should know about law suits because he was one of the most successful trial lawyers in the US and earned a reported $38 million dollars by litigating against doctors. Senator Edwards proposed that all medical litigation be screened by medical specialists before being allowed to proceed through the courts so that frivolous actions can be stopped. He also proposed action against lawyers who represented frivolous claims.

The issue of frivolous claims is important for patients in Singapore. While in the US, the system of contingency fees protects patients from the cost of frivolous law suits, this is not the case in Singapore. When a patient losses a law suit, the patient can be burdened with debts. Even when patient win, they may be left poorer if the legal cost exceeds the award. Senator John Edwards proposed punative actions against lawyers who start frivolous litigation. This proposal may be too drastic for Singapore. However, patients can benefit from greater transparency on legal costs in cases involving medical litigation. In general the public is at a great disadvantage because of the asymmetry in information between them and lawyers. We have seen the beneficial value of transparency in healthcare. There was initial reluctance on the part of the medical community to post average bill size on the internet. But after the resistance was overcome and the information was posted on the web, patients could make informed choices on which hospital to seek treatment from and the costs at that hospital.

Singapore lawyers now advertise on the net. But the really important information that the patients need to know - like the average cost of litigation and the size of the award after the legal cost are subtracted, are not available on the web. If this information is posted on the net, patients will benefit. They would then have objective information to help them make rational decisions on wheather to sue.

In healthcare, there are no absolutes. We can aim for a reasonable standard of healthcare, at a reasonable cost, with reasonable freedom for doctors to prescribe and treat as they wish, with reasonable protection of a patient's legal rights by lawyers, with a reasonable chance for a patient to be compensated if there is negligence and for patients to be given a reasonable opportunity to evaluate the risk of starting litigation. I am sure we would agree that such a system will be a rational system, that is, if we are reasonable and rational people.

Thank you.