A no-fault compensation system for medical injury is long overdue.

The 2011 report of the Productivity Commission (PC) recommended the establishment of a no-fault national injury insurance scheme limited to "catastrophic" injury, including medical injury. The report is welcome, but represents a missed opportunity to establish simultaneously a much-needed no-fault scheme for all medical injuries. The existing indemnity scheme based on negligence remains a slow, costly, inefficient, ill targeted and stress-creating system. A fault-based negligence scheme cannot deter non-intentional errors and does little to identify or prevent systems failures. In addition, it discourages reporting, and thus is antithetical to the modern focus on universal patient safety. A no-fault scheme has the potential to be fairer, quicker and no more costly, and to contribute to patient safety. No-fault schemes have been in place in at least six developed countries for many years. This extensive experience in comparable countries should be examined to assist Australia to design an effective, comprehensive system. Before implementing the recommendations of the PC, the federal government should ask the Commission to study and promptly report on an ancillary no-fault scheme that covers all medical injury.