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Medical negligence and the NHS: an economic analysis


  • Adrian Towse

    (Office of Health Economics, London, UK)

  • Patricia Danzon

    (Wharton School, University of Pennsylvania, USA)


Medical negligence was estimated to cost the NHS in England £235m in 1996|1997, growing at rate of up to 25% per annum. Yet analysis of NHS accounts suggest that a change in accounting policy has led to growth rates and recurrent expenditure on medical negligence being over estimated. The main concern, however, is total societal cost, not the accounting cost to the NHS. The objective of policy should be to ensure that cost-effective investment in injury prevention takes place. Measures that simply shift cost to other social budgets or onto patients are not helpful. NHS arrangements changed in the 1990s with Trusts taking responsibility for claims against hospital doctors and a new NHS Litigation Authority providing insurance for Trusts. It is unclear, however, whether Trusts have had either the incentives or the ability to implement effect risk management policies. Estimates based on two US studies and one UK study suggest that negligence in the NHS in England may cause around 90-000 adverse events per year involving 13-500 deaths, but only resulting in around 7000 claims and 2000 payments. A priority must be the establishment of a comprehensive national database of claims information. Other policy measures are proposed to reinforce the incentives on Trusts and doctors to implement cost-effective risk management policies. Copyright © 1999 John Wiley & Sons, Ltd.

Suggested Citation

  • Adrian Towse & Patricia Danzon, 1999. "Medical negligence and the NHS: an economic analysis," Health Economics, John Wiley & Sons, Ltd., vol. 8(2), pages 93-101.
  • Handle: RePEc:wly:hlthec:v:8:y:1999:i:2:p:93-101 DOI: 10.1002/(SICI)1099-1050(199903)8:2<93::AID-HEC419>3.0.CO;2-G

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    References listed on IDEAS

    1. Labelle, Roberta & Stoddart, Greg & Rice, Thomas, 1994. "A re-examination of the meaning and importance of supplier-induced demand," Journal of Health Economics, Elsevier, vol. 13(3), pages 347-368, October.
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    Cited by:

    1. Paula González, 2004. "Should physicians' dual practice be limited? An incentive approach," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 505-524.
    2. Marinoso, Begona Garcia & Jelovac, Izabela, 2003. "GPs' payment contracts and their referral practice," Journal of Health Economics, Elsevier, vol. 22(4), pages 617-635, July.
    3. Amaral-Garcia, Sofia & Grembi, Veronica, 2014. "Curb your premium: The impact of monitoring malpractice claims," Health Policy, Elsevier, vol. 114(2), pages 139-146.

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