In today’s volatile and litigious world, managing a healthcare practice, be it as an individual doctor or a multi-specialty hospital, is not only about clinical outcomes. It is about risk management, risk aversion, and protecting one’s reputation. Being legally and financially prepared for unforeseen crises is something that is imperative for medical institutes to have. Insurance, particularly Professional Indemnity Insurance (PII), will play a vital role in this equation. But it is only one part of the solution.
In the past, India has witnessed a rise in legal cases and public scrutiny involving medical negligence. According to industry data, over 5 million medical malpractice cases are filed in India. Such events highlight the urgent need for doctors and healthcare institutions to rethink how they manage risk.
Insurance is compensation, but risk management is prevention
Insurance, particularly PII, is important. It offers financial safety against claims of negligence, errors, or omissions by patients or other stakeholders. But as powerful as insurance is, it does not prevent or avert the crisis; it merely responds to it. A negligence lawsuit can severely damage a doctor’s credibility, a hospital’s reputation, and even the public’s trust in the institution. The damage goes beyond compensation, affecting goodwill, social standing, and staff morale.
In a critical industry such as health care, crisis mitigation must begin well before any crisis erupts. It begins with something as simple as record keeping. Secondly, with a complete risk audit of your practice and institution. The audit will comprise of what are the legal, reputational, or operational threats you face or may face in future. Is there a plan to respond to a patient’s complaint that has gone viral? What if a faulty device causes harm? Or a junior lab assistant posts confidential data online? These are not hypothetical. Over 200 hospitals across India were investigated for data privacy lapses or ethical violations a few years back.
Lessons from history…and the present
The case of A.H. Robins, the manufacturer of the Dalkon Shield contraceptive device, is often cited. The device led to thousands of lawsuits due to complications, ultimately driving the company to bankruptcy in 1985. Not because they lacked insurance, but because they lacked foresight in crisis planning and risk containment.
In India, many hospitals have found themselves facing major backlash due to billing errors, avoidable fatalities, or staff misconduct. While media attention does not really last long, legal consequences and reputational damage persist, making it critical to have proactive systems in place.
What must doctors and hospitals do?
- Invest in professional indemnity insurance: PII is not just a box to tick; it is financial safety.
- Conduct routine risk audits: Every establishment should regularly evaluate its operational vulnerabilities, right from device safety, record management, to patient interaction protocols and data management.
- Train the team: Regular training in legal and ethical boundaries, documentation best practices, and patient handling can avert disaster.
- Monitor the external environment: From changing regulations to social media sentiment, staying aware of the context can help in faster and smarter mitigation of threats.
The bottom line
Insurance Awareness Day isn’t just a reminder to renew your PII policies. It is a wake-up call to the entire medical community to prepare themselves as they are operating in an increasingly scrutinised, regulated, and legally exposed environment. While no insurance policy may completely avert the crisis, having the right one, backed by a robust risk management plan, can determine whether your medical practice survives or not.
