Interview - Dr Kerryn Phelps, AMA President, with Kerry O'Brien, ABC TV, '7:30 Report'

That's all now up in the air. After UMP's announcement, the Howard Government repeated its guarantee that doctors would be covered by the Government for any liability incurred in the next two months while they plan a longer term solution.

But the powerful doctors' group, the AMA, has warned of an immediate crisis saying that services will suffer from today without a very rapid response from the Federal Government. I'll be talking with Assistant Treasurer, Senator Helen Coonan, shortly but first I'm joined by AMA Federal President, Dr Kerryn Phelps.

Kerryn Phelps, you're being very specific about how doctors are going to react to UMP's liquidation, quote, 'Services will suffer and it will happen from today unless we get a very rapid and effective response from the Federal Government.'

Firstly, how will services suffer?

PHELPS: There's a tremendous amount of uncertainty, and the particular high risks specialties like neurosurgery, these doctors are already saying that they are not prepared to go to work in the private sector tomorrow unless they know what plan is in place.

Now, it's one thing to say, 'a plan is in place and we're working on it', but it's not enough for them to be able to feel confident, to be able to go to work and possibly incur a claim against them and not know whether they're going to be covered or in what way they're going to be covered if a liquidator comes in and may not pay 100 cents in the dollar if there's a claim against them.

O'BRIEN: So, if we're to take that at face value, you're telling me that some surgeons, some doctors, will simply not be doing that work tomorrow?

PHELPS: I've already spoken to the neurosurgeons tonight and that is the decision many of them have come to, today. There is uncertainty amongst other doctors as well. We've done our best to say to them, 'we're working as hard as we can with the Federal Government to try and come to a solution'.

Of course, this is all very fresh news that UMP has decided to go for a provisional liquidator in the next week or so. But there is still a great air of uncertainty about what happens, particularly between now and when doctors may or may not be able to get another insurer to cover them. Because, while it might be not so difficult for a low risk specialty like non-procedural general practice to get another medical indemnity provider to cover them, it may not be quite so easy for groups like obstetrics, neurosurgery, orthopaedics.

O'BRIEN: And that happens from tomorrow. But the Commonwealth has guaranteed to provide cover for doctors for the next two months while they work out a more permanent solution. Why wouldn't doctors feel safe with that?

PHELPS: I think it's very reassuring that the Government is now highly motivated to do what needs to be done to cover the doctors in the event of what has actually now happened. Unfortunately, there will need to be legislation and it will need to be quickly done because current government is not able to guarantee what a future government might do. And if a claim doesn't come up until another government is in power in the future, then there is an uncertainty about whether that government will pick up that assurance.

O'BRIEN: Other medical insurers seem to feel that they should be able to take on new insurance cover for all the doctors now with UMP but they won't inherit any liability incurred before they write that new insurance policy. Who do you believe should shoulder the responsibility in the event that UMP does collapse? Who do you believe should shoulder the responsibility for that liability that may have already been incurred even though you mightn't know - it mightn't make itself evident for another, even another decade or two?

PHELPS: It's a tremendous paradox when you have probably the safest medical system that we've ever had in history. Doctors are working more efficiently. They are involved in risk management activities, professional development, and yet we have a system, a medico-legal system that has assisted in creating this crisis that we now face. And there's no question that we've inherited this tendency to greater litigation from the United States.

The question that we're facing is whether every taxpayer should help in sharing the burden of this system or whether the sickest taxpayers, that is the people who are having to have medical treatment, should pay for all of it. Because at the moment, what's happening is, if doctors have to pay more for their insurance - if you just look at neurosurgeons they're currently paying $10,000 a month just to keep practising - then the costs have to be passed on to patients. And if the patients can't afford it, they're going to not be able to have access to those services. So this is the inherent danger.

O'BRIEN: Kerryn Phelps, we'll have to leave it there. Thanks.

Ends