The "Regulations on the Handling of Medical Malpractice" went into effect on September 1, 2002. Article 50 of the Regulations specifies the items and standards for calculating medical malpractice compensation, including issues related to future multiple payments such as disability living allowances and dependents' living expenses. However, Article 52 of the Regulations clearly stipulates that medical malpractice compensation shall be settled in a one-time payment by the medical institution responsible for the malpractice. This transforms future multiple payments into a lump-sum payment.
When changing to a lump-sum payment, the number of years to be compensated and the annual compensation amount should be calculated together, and then paid out in one installment. For example, if the victim leaves behind a 65-year-old mother after their death, according to the "Regulations on the Handling of Medical Malpractice," she should be supported until the age of 75, with a monthly compensation of 500 yuan (or 6,000 yuan per year). Over 10 years, the total compensation would amount to 60,000 yuan.
In our handling of medical malpractice compensation cases, this method of calculation is adopted. In reality, however, this method is unscientific and unreasonable. Since money, as the general equivalent of commodity value, generates statutory interest such as profits and interest, using this method of calculation results in losses for the medical institutions as the perpetrators, and also goes against the principle of fairness in civil law. Therefore, for a lump-sum payment, statutory interest should be deducted, which would make it more reasonable. The Hoffman Method applies to this situation, as it can avoid the shortcomings of the current calculation method.
This explanation highlights the need for a more equitable approach to calculating medical malpractice compensation, taking into account the time value of money and ensuring fairness for all parties involved.