Medical Indemnity Still On Critical List
Newcastle Herald
Wednesday November 19, 2003
THE Supreme Court decided last Friday that United Medical Protection (UMP), a company that insures doctors for claims of negligence, was in a position to continue trading and was no longer under provisional liquidation.
The Australian Medical Association welcomed this decision because doctors cannot practice in NSW without indemnity insurance.
If UMP had failed, 70per cent of doctors in the state would have had to have found a new insurer.
No company was waiting with open arms. The operating environment for medical indemnity insurers will not be manageable unless basic structural reforms are made.
UMP was propelled into liquidation by the $13million awarded to cerebral palsy patient Calandre Simpson. The company failed because it was under-funded, but it was debatable whether 14,000 doctors could have afforded premiums to cover the huge awards anticipated by actuaries.
So UMP is back in business. The Federal Government has appointed the Medical Indemnity Policy Review Panel and the IBNR levy has been withdrawn, for the time being. We can now put aside crisis mode and get back to the basics of the medical indemnity problem.
Should doctors be responsible for the long-term care costs of injured patients? There are risks inherent in the practice of medicine. What level of risk is society willing to accept?
We are not out of the woods. Doctors cannot afford the current scheme. Many will retire, mainly from the highest risk specialties of obstetrics and neurosurgery, if reforms are not made. Orthopaedic surgery is catching up quickly.
A relevant comparison is motor accident insurance. Drunken drivers do not pay for the lifetime care costs of their victims. Penalties apply for negligent drivers, and the Motor Accidents Compensation Scheme covers the care costs of accident victims.
The scheme is funded by compulsory third party insurance, levied on the owners of motor vehicles on registration. There are millions of vehicles, so there is a broad base for funding motor accident insurance.
There are 30 neurosurgeons in NSW, whose premiums are meant to cover awards in the order of $20million.
We have to look at a broader base of funding injuries resulting from medical care.
New Zealand has a scheme whereby care costs for patients injured by medical error, or rare or severe outcomes of medical procedures, are covered by the national Accident Compensation Corporation.
These funds are raised from workers paying PAYE tax and a government contribution.
We have to separate penalties for negligence from patient care costs. We need to have clear criteria for the level of compensation payable for particular injuries, and a claims process where the courts are a last resort. We need a shorter time limit in which to notify claims.
The current system is an irrational lottery for claimants with time, energy and money. A few claimants achieve success. Many don't and many don't have the resources to go through the process.
There is fundamental inequity in this arrangement. The current laws foster ambit claims. The pooled funds of medical defence organisations look like rich pickings until the companies fail under the weight of potential costs.
A reasonable measure of risk and responsibility has to be applied. Programs aimed at eliminating errors, such as risk management and quality assurance, have an important role but will not eliminate all adverse events.
Faced with a high risk, but potentially life-saving procedure in, say, pediatric neurosurgery, prudent risk management would say ``don't do it".
This would be an agonising decision for the parents and the doctor. Such decisions will become more commonplace with the advance of medical research.
Doctors are not demanding exemption from the law of negligence. They are asking for affordable premiums so that they can continue in practice.
They balance public and private patients, and the costs of running a medical practice in the face of pressure on fees from governments and private insurers.
Doctors don't want to pass on indemnity costs by lifting fees.
Dr Choong-Siew Yong is president of the Australian Medical Association NSW branch.
© 2003 Newcastle Herald