The Costly Business of Medical Malpractice In Asia

Why Is Asia’s Health Markets Facing Rising Clinical Risks?

Asia’s healthcare systems are probably the most complex and challenging of all global health systems. Whilst the growth in GDP is outperforming what is seen even in more established markets, this is not sufficient to keep pace with the needs of a population where rapid ageing and increasing incidence of chronic illness are increasing as quickly as they are.

Asia is hurtling towards having the highest elderly dependency ratio in the world, and also the highest prevalence rate of illness globally – and these challenges have every possibility of overstretching the systems in place and sending them into decline rather than towards prosperity. If left unchanged, Asia’s healthcare markets will need over a million more hospital beds in just ten years and a doubling of the industry's budget just to deliver the same standard of care as seen today.

Compounding this challenge, rising middle classes have growing expectations of the healthcare professionals and institutions that serve them. Health literacy levels – once very low – are evolving and patient’s awareness of what “good care” looks like is continually being informed by the democratization of data and a global movement to improve transparency in quality care standards. This is particularly important given the generally lax regulation seen across Asia’s health markets. Whilst the status of doctors in Asian societies remains very high, there is a growing appreciation of the rights of patients and consumers and increased willingness to challenge clinical decisions.

The mix of high workloads, lack of standards and regulation, as well as increasing patient expectations presents numerable risks for healthcare workers and will almost certainly manifest in a higher number of medical malpractice claims.

Alongside a rise in the frequency of claims, the monetary amount of claims is also likely to rise. Asia has some of the highest rates of medical inflation globally, with some markets – like Hong Kong and Singapore – having private procedure fees at levels on par with or even exceeding the pricing seen in US markets. As malpractice cover typically includes loss of earnings, the claim amounts are therefore likely to continue to grow in line with the inflation seen in the sector.

The problems of medical malpractice are often exacerbated by a lack of strong regulating professional bodies for the medical community. In most Asian markets, self-regulation is common for the profession. This, alongside poor data availability, makes accountability for clinical practices and outcomes very weak in comparison with the standards seen in more established markets. Healthcare workers in many emerging Asian markets rarely face scrutiny for poor practice, and very few have their license affected; meaning patients see litigation as their only recourse to action.

Providing Safe Care in Emerging Healthcare Systems There is considerable fragmentation in the way clinicians and providers are organized across Asia. This fragmentation in health systems costs lives. Morbidity and mortality are significantly higher in markets that have poor coordination of incentives, care models and clinical activity. In Asia, unlike more established markets, there is greater pluralization of providers, all operating with looser regulatory frameworks.

As greater levels of transparency are slowly applied via Government reforms, and care practices - both good and bad - become more obvious, hospitals and their clinicians will face increased scrutiny. Whilst this is ultimately likely to be a good thing, and bring about a transformation of health systems towards safer and less variables models of care, the near-term will see this translate to litigation unless proactive steps are utilized.