Doctors' Insurance
Sydney Morning Herald
Tuesday December 4, 2001
Nine months after the collapse of HIH, the shockwaves are still being felt. NSW doctors are warning of bigger bills, and the flight of some GPs and specialists from the profession as the state's largest medical insurer plans substantial premium increases. With about 70 per cent of doctors on its books, United Medical Protection faces enormous difficulties as a result of the collapse of HIH, its reinsurer. Undoubtedly, the cost of doctors' higher insurance premiums will be passed to patients. The unending crisis in medical indemnity insurance is eroding the practice of medicine in this state.
The rising cost of medical insurance has been a cause of concern for doctors for several years. Specialists are enduring the worst of it. Premiums for obstetricians, for instance, have increased 10 times since 1990. The UMP bill for obstetricians has reached the $70,000 mark, a financial imposition that sole specialists in rural areas such as Bega and Armidale have decided is so onerous that they left their jobs in those towns.
The insurance industry says that like the rest of the community, doctors cannot expect to be immune from the effects of the HIH collapse and the terrorist attacks in the United States. But UMP's problems have been exacerbated by unprecedented levels of damages awarded to injured patients by the courts. Doctors say the judiciary looks at the bountiful insurance schemes and is too ready to award over-generous damages. Doctors also point to the disproportionate costs charged by lawyers for representing patients in compensation cases, which become payable by the doctors (or their insurers) when patients are successful in litigation.
The Carr Government has attempted to address the crisis by imposing a cap on insurance premiums for specialist doctors. Under new legislation, the Government will cover compensation payouts exceeding $1 million. It also wants to introduce new regulations to stop cross-subsidisation, This would prevent defence funds charging high-risk categories up to 20 times the costs of premiums paid by GPs.
The Australian Medical Association and some insurers, including MDA National, have asked the State Government to defer the regulations because of concerns they are a form of price fixing that may drive some small competitors out of the market. But the Government expects the regulation to be in place by Christmas.
It is reasonable that the Government should act to ease the pressure on doctors' insurance premiums. As long as they keep rising, doctors will pass on, as far as possible, the added costs to their private patients. And the wider consequences, such as GPs' refusal to deliver babies in the country, increase the disparity between services available in Sydney and the bush. As a stop-gap measure, the Government action is understandable, but such taxpayer-funded measures cannot be the long-term solution to this complicated problem.
© 2001 Sydney Morning Herald
