Value Demand and Failure Demand

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8 August 2017


Phil Ruse, Head of Legal Protection Sales and Distribution at Allianz Legal Protection

Phil Ruse from Allianz Legal Protection looks at the differences between value demand and failure demand.

My spirits lifted recently when I read the following as the opening of an article: “The Medical Protection Society has said that the NHS could be paying out £2.6bn a year in clinical negligence costs by 2022 and that urgent action is needed before the burden becomes unsustainable.”

I also noted a quote in the Daily Telegraph from Peter Walsh, chief executive of the charity Action against Medical Accidents, who commented: “The changes would deepen a culture of deny and defend in the health service, with trusts knowing that the bereaved could not afford to take them on. This would lead to massive lost opportunities to learn from mistakes.”

Brilliant, I thought, does this mean at long last the NHS is going to take this seriously and hone in on medical mistakes?

Sadly not. It simply turned out to be the usual cry of claimant solicitors charging disproportionate fees, the conclusion of which is that clinical negligence compensation and costs will soon exceed society’s ability to pay. This is a situation that is both true and worrying.

The answer can’t just be about stripping costs out of a legal system. Surely it’s also about learning from medical mistakes and continually improving?

Our current NHS system of accountability serves to act as a disincentive for those who do not take medical negligence mistakes matters seriously and for those who lack the ability to identify and eradicate risks. Why is this message never acknowledged?

At the risk of wandering into business speak; high-performance enterprises are able to distinguish between ‘value demand’ and ‘failure demand’ and work to eliminate the latter.

In other words; value demand delivers exactly what the customer wanted or needed; failure demand is poor service that does not deliver what the customer wants because of failures somewhere in the process.

It’s a cost to industry which is real in terms of extra cost to resolve. This is the driver and incentive to improve.

You rarely enhance customer outcomes by disputing the costs of said failure – if you focus on fixing the cause, then the outcome will improve.



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