Insurance companies main beneficiaries of scheme to protect obstetricians from malpractice suits
In late May, 1,041 former obstetrics patients of 28 medical facilities submitted a plea to the National Consumer Affairs Center (NCAC) to arbitrate a settlement with the Japan Council for Quality Health Care (JCQHC) that would partially refund money they had paid during their pregnancies for insurance purposes. The JCQHC is a foundation that carries out third-party evaluations of hospitals and clinics, but it also oversees a special compensation system enacted by the government in 2009 to protect obstetricians from career-threatening malpractice suits.
The system allows for a form of insurance that all obstetrics patients, meaning pregnant women, pay into. If a fetus or baby suffers brain damage before or during delivery, the insurance pays up to ¥30 million in damages over the next 20 years to the child and his or her parents. This no-fault insurance system was put in place because fewer medical students were opting to become obstetricians, partially because the dwindling birthrate has made obstetrics less profitable, but mainly because malpractice awards in the cases of babies born with disabilities have been extremely high. It was just too financially risky to go into the field.
Unless a pregnancy threatens the well-being of the mother, childbirth is not covered by national health insurance. Though in theory the obstetrics insurance is optional, if a pregnant woman patronizes a medical facility that pays into the insurance system (meaning 99.8 percent of them) they automatically charge her the ¥30,000 premium and incorporate it into her bill. What complicates the matter is the so-called “public aspect” of the system, according to a recent article in Aera magazine.
To encourage women to have babies, local governments compensate them for the money they spent on childbirth after the fact with something called shussan ikuji ichijikin (one-time payment for childbirth), a handout administered by the National Health Insurance Union (NHIU) of up to ¥420,000 per birth, regardless of how much money the patient spent.
This amount includes the ¥30,000 premium that the woman paid for the obstetrics insurance, so in effect the public is paying for the insurance since the NHIU uses taxpayer money as well as national health insurance funds for payments. In that regard, Aera has characterized the JCQHC as an amakudari institution; in other words, a bureaucratic entity whose main purpose is to justify its own existence.
Since the insurance system was launched in 2009, it has paid out about ¥4.1 billion in compensation for damages suffered during childbirth. At the end of the last fiscal year there was still about ¥80 billion in the reserve pool of funds and it is estimated the pool, which is controlled by the five insurance companies, will increase to ¥100 billion by the end of the present fiscal year.
According to Aera, the JCQHC originally estimated that between 500 and 800 babies would suffer brain damage every year out of the country’s 1.2 million births, but real statistics for fiscal 2012 show that only about 200 babies suffered such damage. The mothers who requested arbitration from the NCAC are claiming they overpaid for the insurance and are demanding ¥20,000 each in refunds from the JCQHC. If they win, the organization will have to pay a total of ¥20.8 million. As Aera notes, more than 50 million women have paid this premium since 2009, though, strictly speaking, it is the public who has paid the premiums.
One obstetrician interviewed by Aera says that the reason all medical institutions sign up for the insurance is that part of the law mandates that any medical facility which applies for “high-priced medical care” compensation to the NHIU cannot be approved if it doesn’t pay into the obstetrics compensation insurance plan. Otherwise, the facility can only receive maximum compensation of ¥400,000 for each delivery, regardless of what it cost the facility. That’s too risky for smaller clinics.
The main beneficiaries of the system are the private insurance companies that participate. The premiums are practically free money since the companies are allowed to collect and administer the funds. Also, brain damage resulting in cerebral palsy is difficult to diagnose in an infant, and there is a five-year time limit for insurance claims.
In many cases, developmental disorders arising from brain damage don’t manifest themselves until the child is older and the time limit has passed. However, the insurance companies are also using this aspect to explain why they need such a huge pool of money.
Of children born in 2009 who were eventually found to suffer from cerebral palsy due to brain damage, 12 were discovered in 2009, 100 in 2010 and 158 in 2011. Diagnoses are thus progressive, so the insurance companies say they need this huge surplus to meet future claims. But there has already been discussion in the Diet that the funds should be administered by a government body so as to relieve some of the public burden associated with medical care.
In any event, as some pediatricians have noted, ¥30 million over 20 years is insufficient to take care of most people who suffer from cerebral palsy. They tend to require 24-hour care the older they get. As one mother who is part of the arbitration claim told Aera, a system for compensating brain damage victims directly would be cheaper, more efficient and more humane than the obstetrics compensation insurance, which benefits administrators more than doctors or patients.