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Australian government tries to solve doctors’ indemnity crisis

Christopher Zinn Sydney

The Australian government has introduced a package of measures designed to tackle the country’s medical indemnity crisis, which has been characterised by soaring premiums and the collapse of Australia’s biggest medical insurance company. The package includes a subsidy of premiums for obstetricians, neurosurgeons, and GPs who perform certain procedures.

The Australian Medical Association has said that it does not go far enough and has predicted that 20% of rural GPs who provide obstetric services will quit rather than face much higher premiums.

The association said that despite the reforms, which came in with the new financial year and were designed to limit claims and the rise in premiums, doctors and patients were surrounded by insecurity.

"Australia’s medical indemnity system is like a three legged dog," said the association’s president, Dr Bill Glasson. "Its progress is slow and uncertain, and it could fall over at any time. The missing leg is affordability."

The association said confusion reigned in the national capital, Canberra, with uncertainty over private obstetric, paediatric, and anaesthetic services.

The federal government’s rescue package for the medical defence organisations was in response to the collapse of the country’s biggest medical indemnity insurer, United Medical Protection, after it went into provisional liquidation in April last year (BMJ 2002;324:1057).

Health minister Kay Patterson said she was concerned that doctors might consider giving up practice because they were not fully aware of the government’s medical indemnity package.

"[It is] is a comprehensive set of measures to ensure that doctors will have access to medical indemnity cover which is affordable and underpinned by the same prudential standards which apply to indemnity for other professionals," she said.

But although the reforms include a government subsidy for the high cost of premiums for certain specialities and for GPs who perform certain procedures, professional bodies say the reforms are not enough.

The association said one doctor had received a bill for indemnity insurance of $A100 000 (£40 000; $70 000; €60 000), up from $A70 000 the year before. He had considered quitting the profession but had been told that quitting would cost him A$80 000 in insurance to cover the "tail," or any claims that may not yet have been made.

The president of the National Association of Specialist Obstetricians and Gynaecologists, Dr David Molloy, said a reliable survey was predicting workforce losses of 15% to 20% because of the indemnity issue.

One doctor has already quit. Dr Stephen Holmes, an obstetrician in Clare, South Australia, said the indemnity rules had changed every year for the last seven years, and he simply could not afford to pay the soaring premiums.