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In Britain, the NHS spends millions of pounds a year compensating patients injured during medical treatment. Compensation is paid if the patient can demonstrate that treatment was supplied negligently. However, concern over the cost, effectiveness and administrative efficiency of this approach has led jurisdictions like Sweden, New Zealand and some US states to alter the basis for compensation, and the Department of Health has now published proposals for reform in England. We assess the current approach in England and provide costings for some key alternatives to have featured in the latest policy debate. We draw lessons for reform from international experience. © Royal Economic Society 2004.

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Economic Journal

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