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Q & A - Medical Indemnity Webcast via Rural Health Education Foundation

Dr Kerryn Phelps, AMA President; Senator the Hon Kay Patterson, Federal Minister for Health and Ageing; Dr Ken Mackey, President of the Rural Doctor Association of Australia; Mr David Lombe, Provisional Liquidator of United Medical Protection (UMP)

CHAIRMAN: And we will look at all those details at the end of the program. We will give you more details of resources and contacts. So, thanks very much. Kerryn Phelps. Do all doctors have to pay the levy?

SENATOR PATTERSON : That is an issue that will be discussed and worked out with the medical profession. All doctors who are members of the UMP have a liability.

CHAIRMAN: They certainly will, but as a question, if you are member of - if, for example in Victoria, would you have to bail out people in UMP?

SENATOR PATTERSON: No, UMP - we will deal with UMP's trouble, but we have to look at the other medical indemnity organisations and if any of the others do not meet the provisional arrangements, that issue will have to be addressed.

DR PHELPS: Can I say there are obviously going to be a number of conditions around any sort of levy being agreed to, and I think if you have a look closely at the Prime Minister's statement which will be arriving this week, you would have - I would like doctors to notice that the Prime Minister never said that the trial would have to be fully funded by levies from doctors, but that there would have to be a contribution, and I think that is an important distinction, that doctors would not be expected to fully fund the IBNR and the second thing is that at the meeting with the Prime Minister there was not an agreement at all for doctors to fully fund the IBNR.

What we have agreed was that doctors would consider making a contribution provided that the appropriate reforms had been put in place to contain the IBNR and that doctors would not be expected to be throwing money into a black hole in the absence of substantial reform.

CHAIRMAN: We had a question about whether or not this does indeed cover private practice indemnity.

DR MACKEY: Not all doctors are covered. The procedural GPs are the ones who are particularly covered and some other doctors, but essentially the current State government that had the idea to try and make sure that there was continuation of the delivery of procedural services in Victorian towns and that is the model that I was talking about, that it is possible to keep doctors working, keep the services going, in the rural towns.

CHAIRMAN: Minister, this might be a rather cunning question, but I will ask it anyway. The Prime Minister has commented on the extent to which there is a free market in medical indemnity, I understand, and commented for example on the New South - I am not certain whether he has commented on the Victorian legislation, certainly on the New South Wales legislation, suggesting that it creates abnormal premium situations which would be a deterrent for new entrance into the market. So to what extent are solutions like the Victorian or indeed the New South Wales or the forthcoming Queensland solutions, in the government's view going to be a deterrent to new entrance into the medical indemnity market?

SENATOR PATTERSON: Well, I think the most important thing we need to have is to ensure that we have appropriately reforms. I mean, I did not know and I think many of my colleagues were not aware that an obstetrician can receive anything up 21 years and a period of growth, another five years, I think, for procedures.

You have people who have died, people who have retired, who are still sitting waiting for possibility of a claim and they are the sorts of things - and this is, I think, what Dr Phelps was talking about - unless we can really address those long term issues in State-law reform, the Commonwealth has made a commitment to look at the issue of the provision - provision can be made for people who are seriously injured or people who have long term rehabilitation requirements.

But to be able encourage anybody to go into the market and to deal with medical defence, we need appropriate reforms in place from the States. I had hoped that would uniform reform across the States so that people could not shop, and that is one of the other things that does concern me into the future, that people could use the best jurisdiction to get the best outcome, and I think Dr Phelps is nodding.

We both were hoping through that forum that we would get some sort of agreement. But, look, we have to take it step by step, and to get the sort of reform we are getting, I think is very important and will be a brake on the drivers of premium increases.

DR PHELPS: I think is clearly a challenge to the leaders of the State and Territory governments to work together to get fundamental reform in every State and Territory before the end of this year, in a format that very closely resembles one State to the other, so that there is some harmony and that there is not a reinventing of the wheel in every jurisdiction.

CHAIRMAN: Dr Phelps, have you got your phone calls and faxes because we are running out of time in this program so now is the time to get it in. The number to call in on is 1 800 817 268 and Sydney Metro area 9715 8715. The fax number is 1 800 633 410, or 9715 8700 if you are faxing from Sydney.

And indeed, just this issue is probably the most faxes we have had in before the program started was about just this issue, expressing concern about the likely inadequacy about the type of tort reform proposed by Federal and State governments.

And an orthopaedic surgeon from Tweed Heads says "That government actions with Federal and State will be superficial, unlikely to meet any real reduction in indemnity premiums", and so on and so forth.

I mean, pie in the sky, how much confidence can you have? I know we live in the Federation this is serious.

DR PHELPS: There are some very critical reforms that will make a massive difference to the future of premiums. The statute of limitations is one. You cannot have IBNRs being estimated on the basis of a case that might come up in 25 years time. I mean, how do you estimate what a Court is likely to award, 25 years away? I mean, 25 years ago, you could not have dreamt of the awards that are happening now. So, that is a matter of urgency that the States can deal with.

The second thing is the long-term care and rehabilitation scheme, some way of managing these big awards that are being made by Courts. Now, if we can take long term care costs out of that equation, then one should - the IBNRs will become more manageable and more predictable. And if we can get those fundamental reforms into place, then I think we have a chance of long term management and real management of these IBNRs and the long term future of health services.

Senator Patterson: I think also it makes it much easier, I am not an actuary, but there must be some sort of much greater stability or surety if you have more predictable in what the costs would be. I mean, if you are insuring a building, you know how much the building costs, and it is insured for seven years, and what the estimate might be. The thing that surprised me when I was just coming into the portfolio is that the enormous task of trying to estimate the claims that might occur and it seemed to me an absolute impossibility to put an accurate figure on that. And I think what Dr Phelps is saying is that with these sort of reforms, with this bringing some sort of certainty into the system, which means that insurers do not have to have absolutely exorbitant prices to cover what might be the case.

DR PHELPS: And the State and Territory AMAs will be watching very closely the reforms in each State, to make sure that they do have bite. I mean, there were some concerns in Queensland for example that Peter Beattie is not addressing the issues of capping the threshold. Now, unless you deal with those tough issues at the first bite…

CHAIRMAN: ... can you explain?

DR PHELPS: The capping is done with these claims and the threshold at which people can make claims against their doctors for negligence. And the other difficult issue that the States must take control of is the issue of "defining medical negligence". Now, the Court system has taken the definition of negligence away from the profession over the years and I think we have to get back to that, even back as far as what as known as Volum ? Principle, which is the actions of a reasonable doctor is considered by his peers as being the definition of "medical negligence" or otherwise, and rather than some unrealistic definition that is created by the Court system.

CHAIRMAN: Kay Patterson, have government funds been drawn upon yet, or are going to?

SENATOR PATTERSON: I do not know. Mr David Lombe would know better than I.

MR LOMBE: To date we have made two payments - one payment of approximately 4 million and one payment of a million.

CHAIRMAN: Out of your own reserves or out of government Treasury?

MR LOMBE: It has been paid from UMP resource funds and we are continuing to work through those. It is a process that needs a lot of dotting the I's and crossing the t's and we are working through it as quickly as we can. We have a number in the pipeline and we are certainly endeavouring to process those as quickly as possible.

CHAIRMAN: Minister, a question here from a frustrated rural doctor and he is expressing dissatisfaction with the government's rescue package and says the way forward is not to further tax doctors and patients in an out of control of litigious culture and he asks, "Do you realise that someone with a $10,000 levy, rural doctors have had to charge everyone $48 for a 15 minute consultation and that would mean the end of bulk billing?"

SENATOR PATTERSON: Well, I am not going to speculate about the levy and I indicated what I thought the levy could possibly do if it were to be divided equally amongst all members of UMP. The level of the levy will need to be negotiated carefully with the medical profession and I think, as I said before, it is a five step process. We are in uncharted waters. It is something we have never had before. I think the Prime Minister does actually indicate it was not an issue of the government's making. That maybe we should have addressed earlier the issue of long term care and rehabilitation, but it was also the States that need to undertake reform, but I think also it is a shared responsibility in terms of the problem, and it is a shared responsibility in terms of the solution.

DR PHELPS: Could I just add to that that we are very well aware and have made the government aware of special issues for, for example, newly qualified doctors, doctors approaching retirement who are looking at exit fees to get out of working, and what they might have to pay in terms of ongoing cover, for doctors who are working part time. These are all very special cases that will need to be negotiated carefully over the next few months. So the issue of the levy is by far from clear.

CHAIRMAN: Yes, doctor.

DR MACKEY: I think what rural doctors are trying to work out there is all the different elements that they are going to have to pay. Now, they have got the premiums to pay, the have got the call to pay, they are going to have this new levy to pay. They are also going to have to pay for the tail if they want to leave practice, and they have also got to pay for some exit fee as well.

There is a whole number of different issues that affect different doctors in different ways and we have got to dissect those elements apart and try and work out, amongst all the other things that they have got to do, just what they are going to have to pay, and that is their greatest concern - how many dollars are they going to have to cough up in a few weeks, or 1 January?

CHAIRMAN: I want to be clear that what we are seeing tonight is that those are questions post-31 December 2002. That is not to say that we want to go - will not be bothered by them, they are not real questions, but they are questions post-31 December.

SENATOR PATTERSON: I think I would to just make it clear, Dr Mackey, and reiterate because the levy is to cover for the tail and I think to include that as a list of things that have to be paid, the levy will cover the tail and we are going to negotiate the levy with the medical profession. We realise it is at least five years, so will spread over a period of time, and I think the important thing is that we need to understand that the government is working as closely as we can with the medical profession to ensure that we do with this problem, and I think the Provisional Liquidator said maybe UMP all along was not charging appropriate premiums, and this is an issue that has been left.

I think what we - we are going to spread that power across a period of time to enable doctors to deal with it and I think that we need to keep more informed on a step by step basis but I hope you will appreciate that this a very difficult issue and it has a number of areas that need to be dealt with. There is the financial area, there is the levy for State and Federal across a number of portfolios and agencies as well as the Doctors. And I hope that we can all address it with goodwill and good faith, because that is how we are approaching it, as the Commonwealth government, and that we will find solutions, and solutions that actually have long term outcomes, and I think that is what Dr Phelps and I are aiming for, to ensure that this is a problem that is not just a particular bandaid, but we actually cure the disease rather than - and treat the symptoms rather than just putting a bandaid on an old wound.

CHAIRMAN: We have seen what rural doctor are asking you, David Lombe, what efforts are needed to identify who is responsible for UMP's collapse - the directors, the auditors, the government?

MR LOMBE: People often assume that for some particular cause, maybe a major fraud or something of that nature…

CHAIRMAN: We have had one or two examples in the press recently?

MR LOMBE: They have, they have.

CHAIRMAN: It is .....

MR LOMBE: I think that causes people to be suspicious and what is simply a very startling cause of the failure with UMP, anyway. I think it is very much the issue of the premium not being sufficient to meet the claims that are now being paid out. And maybe there are some decisions that they took about we know what the claims made have also impacted on their financial position. But the new work we are doing at the moment, we are not seeing any dramatic reason for the failure.

DR PHELPS: Can I just say, I think we have to go a step further back, comments by Senator Patterson and I have heard Mr Lombe say that it is the fault of not enough premiums being paid. I mean, ultimately patients have been paying lower fees because doctors have not had to pass the higher premiums on, so patients have also benefited from the fact that premiums were at the level that they were. And I think if we go back one step and if we are looking at the causation of this disease, it is the system that has gone crazy that has created the higher premiums as time has gone by.

And so what we need to do is go back and fix the legal and the medico legal system that has created the problem in the first place.

SENATOR PATTERSON: I think too, it has most probably been different in different jurisdictions, too, and that is what - I think you agreed, Dr Phelps, that in some jurisdictions we have seen higher claims, we have seen more litigation than in other States, and so that has put pressure on premiums.

DR PHELPS: Indeed. And the greatest evidence for that is that the highest levels of litigation do not correspond with the highest levels of negligence. So, there is something wrong.

CHAIRMAN: Okay, we have got two fellows on the line. We have got Dr David Dance from Queensland. Good evening, Dr Dance.

DR DANCE: Good evening. Good evening, panel. My immediate question that I have to make my mind up before the end of this month is whether I stay with UMP or not. Now, a lot of the government promises are made to UMP members and to UMP. Am I chained to UMP in order to get the maximum benefit of these government funded promises? Or can I leave? But what is the exposure to my practice if I change MDO on 30 June?

CHAIRMAN: David, do you want to do that?

MR LOMBE: I think one of the stages you could find yourself in is the fact that you may have a gap in your cover, but it is entirely a matter for yourself as to whether you wish to stay with UMP. Of course, with the government guarantee, I am encouraging members to stay with UMP because I think that is in their best interests.

CHAIRMAN: And presumably, although you cannot really comment, which MDO will virtually cover that gap, I assume?

CHAIRMAN: Thanks, Dr Dance. There was a further question from Dr John Malone from Broome in Western Australia. Good evening.

DR MALONE: Yes, good evening, CHAIRMAN, and panel. I am greatly encouraged, Chairman, by the alacrity our Prime Minister and his government have shown and I understand, if I may direct the question, Chairman, to Mr David Lombe. I understand that Trowbridge Consulting were the authors of a confidential report to your firm and reported on the seminar on 25-28 November. Do you believe that you can actually calculate the quantum of the tail and bearing in mind what our President, Dr Kerryn Phelps has said a few moments ago?

DR LOMBE: I am not particularly aware of the Trowbridge involvement but certainly we have a team of actuaries presently trying to calculate the tail, if you like, the ANR, and they are working through what they regard as being difficult data, not because there is anything wrong with it, but just the nature of the data, and will be attempting to calculate an IBNR in accordance with proper actuarial principles.

CHAIRMAN: Do you want to tell us any more about this report that you are privy to, Doctor Malone?

DR MALONE: Yes, I understood, Chairman, that the Trowbridge Consulting were actually an in-house organisation linked to the provisional liquidator's firm. I may have misunderstood the information that fell off the back of the truck, but that was my understanding.

CHAIRMAN: It is a truck with a long distance then, it has got to Broome.

DR MALONE: ..... thanks .....

MR LOMBE: Trowbridge used to be a branch of Delloitte's a subsidiary, if you like.

CHAIRMAN: But you are not aware of this report?

MR LOMBE: No, I am not particularly aware of it, no.

CHAIRMAN: Thank you very much, Dr Malone. There was another question for you, what role have you taken in working with the government to develop the submissions that have been put in place?

MR LOMBE: In terms of the situation with the government, I would really like to compliment the government for its approach in relation to this crisis. It has been extremely pro-active in working through the issues, and I have been to Canberra on a number on occasions and some meetings have been late at night, working through various scenarios. It is a joint process. It is a process which - where my ideas are welcomed, and we had some very frank discussions about the issues and I have had nothing but excellent rapport with the government and I would compliment the government and the people they have assigned to the task, in terms of Treasury and other people, and certainly my discussions with government Ministers have been very, very good, and very productive.

CHAIRMAN: And to what extent have the policies put in place, been based on your advice?

MR LOMBE: Well, certainly it has been a joint process. It has been a process where the government has had certain views and the government, from those views, I guess, by discussion with various parties and stakeholders, etcetera, and I have also had my own views about the way the matter should move forward and I certainly openly expressed those views to the government and hope they look at those views and made decisions accordingly.

CHAIRMAN: We have another call on the line, Dr Fitzgerald from Queensland. Good evening, Dr Fitzgerald?

DR FITZGERALD: Yes, good evening. My question is, I am a surgeon and I am aware that in New Zealand surgeons pay about $1000 per year for their medical indemnity cover. What is the difference, why do we not at a system that New Zealand has? Can you give us some ideas about that?

CHAIRMAN: Kay Patterson.

SENATOR PATTERSON: Well, the only issue in New Zealand is that they are not a Federation. They have a National government and they - - -

CHAIRMAN: Is that a cop out, Minister.

SENATOR PATTERSON: They do not have any States and so they have one set of legislation and then they - I think it is a fixed - and I am not sure on this, but I think - and again, this is the thing that Kerryn would be much more informed about the comparative arrangement, but I think they have a fixed payout for indemnity and they have a national scheme for people who are permanently disabled or require long term rehabilitation. Some people will tell me that although it looks good from afar, they have some problems internally, but I have not investigated that because it would be very difficult to overlay that over in Australia in our federated system.

CHAIRMAN: Kerryn?

DR PHELPS: It is a no-fault scheme which has its advantages and disadvantages and probably an in-depth analysis of that particular scheme is beyond the scope of discussion tonight, but suffice to say that we certainly have had a look at it. I have had discussions in New Zealand with the NZMA. We have had the President and CEO of the New Zealand Medical Association at our national conference to give us an address on the New Zealand system.

It has its attractions, but as I said, it is a no-fault scheme and a doctor can only be sued for what is basically serious criminal conduct with relation to patient care, and that all other medical accidents are assessed by an independent government tribunal which decides which are the worthy claims and which are not, and the doctors are - if there is an element of medical negligence of medical misadventure involved, if there is indeed medical negligence, then that is referred to the appropriate authority or tribunal for which the doctor has to pay a small amount of insurance in order to have the appropriate representation at that particular hearing.

As I said, it is a no-fault scheme. It has a few pitfalls but, once again, I think it is one of the models that we have been looking at, but at this stage does not seem to have a great deal of support here in Australia.

CHAIRMAN: Thanks, Kerryn. A question from Dr Stephenson who is a rural Registrar in Queensland, to you, David. "Will another call be made on UMP members as apart from the levy?"

MR LOMBE: The call has been always an aspect that we were considering, certainly an aspect that was always on the agenda. However, I take reference to the comments that were made by Justice Austin that as a consequence of the government guarantee, it seems unlikely that the Provisional Liquidator will come before me seeking a further call. It is an item that is still on the agenda, but rather than being at the top of the agenda, I think it has significantly moved down as a consequence of the government guarantee.

But there is always an issue in terms of our moving forward as to what capital it needs. And if it is going to write business without the government guaranteeing the future, it needs certain capital to comply with that real requirement. So that is still an ongoing issue, but in the present circumstances, and until we see what the plan is for the future, what the answer is for the future, it is very much down in the agenda.

CHAIRMAN: There is only another way of acquiring - the provincial backup required, is a merger .....

MR LOMBE: Absolutely, absolutely, and that is certainly one of the options that is running through my mind at the moment. There are many.

CHAIRMAN: Any interest …..

MR LOMBE: I would rather not pre-empt that but - - -

CHAIRMAN: Just twist my arm.

MR LOMBE: There is a very good chance.

CHAIRMAN: There is a question from a Queensland procedural general practitioner. "What can be done in the very near future to reassure doctors that it's safe and economical for them to resume obstetric and anaesthetic practise?" Do you want to pick up on that one, Kerryn?

SENATOR PATTERSON: The thing is that for doctors who are members of UMP are now covered with the government guarantee at the same level they were before these crashes, and that is why we are saying to doctors we want you to continue to work and you are covered until the end of December, and of course we will be working during that time to address the issue. We are now more aware of the situation from the Provisional Liquidator and that you will need to know and be assured that you are covered for the period of the new agreement and would take that, because ..... until the end of December you covered in the same way as you were covered when UMP was running last year. Most people would have to say you must be better covered. I do not think there is any I can add as many would love to have a government guarantee.

I think a lot of people have said to me, "We'd love a government guarantee". But for the time being, that is the situation. I hope that you all understand, and I am sure you do, that it is the government's attempt to address this issue, and as Dr Phelps has said ...... Dr Phelps, I would not wish that on you - - -

CHAIRMAN: Funny about that. The Prime Minister has drawn up the thing, has he not?

SENATOR PATTERSON: ..... but the important thing is that we have to address each of these issues and it is very difficult, and I know it is very difficult for you out there, if we are here, and hearing every day exactly what is going on, but let me assure you, and I think the Provisional Liquidator has said that the government is cooperating with all its might to address what is a very difficult issue and it is of great concern. And as Health Minister, my concern is about the fact that you will never be able to continue to practice, and patients are never going to receive your services. And that, to me, as Health Minister, is the important thing.

Senator Coonan has agreed that keep me across the prudential arrangements from constant contact with her, because as Health Minister, I have you and the patients at heart and I am pleased to hear the Liquidator say that he is getting full cooperation from the government, because that is what we are aiming to do.

CHAIRMAN: Ken Mackey?

DR MACKEY: What our association has been telling its members is that they have got to make their own risk assessment. That means accepting what the government said, having a look at other information that is available, and assessing their ..... satisfaction is the most important thing. It is only the individual that can come up with their own risk assessment, but taking into account all the information and communications that have been made available.

CHAIRMAN: Kerryn?

DR PHELPS: And they may be very much aware of the concerns of doctors who are working in the higher cost specialities and we have already begun negotiations with the Prime Minister's Indemnity Taskforce about what can be done about these escalating and unaffordable premiums, and at the moment I think that there is some positive response to the idea putting a ceiling on the amount of premium that any individual practitioner might have to pay, and looking at subsidies, above and beyond that, in order to maintain ongoing services in areas like obstetrics. So, once again, that is a work in progress, but it is certainly something that we are very much aware of.

CHAIRMAN: Kay Patterson, I come back to the policies of this. We have got a Prime Minister's Office. We have got the Treasurer's office through Helen Coonan. You have got the Minister for Health and Ageing. Who is moving this?

SENATOR PATTERSON: And the Attorney-General, as well?

CHAIRMAN: Sure. Who is moving this?

SENATOR PATTERSON: The Department of Prime Minister and Cabinet is moving it in terms of this high level committee, and that was one of the issues that we had to do. Because it across a number of portfolios that are addressing this issue, that the Prime Minister put in place this very high level committee with whom the Liquidator has been working, and I think he indicated to you that it is working. As I said to you before, it is something we have never experienced before. We have had to put together a committee of high level officials that report to the Ministers. The Ministers are constantly updated. The Minister's officers work for that committee and they work in conjunction with the medical profession and with the Liquidator to address this issue, but the committee is led by the Prime Minister and Cabinet.

CHAIRMAN: We have got a question here from a consultant physician in Rockhampton in Queensland who asks, "For those UMP members approaching retirement age, and whereas doctors without a track record, does the panel recommend the policy of alienation of personal assets?" - presumably of tucking it away in the wife's name of a partner's name - "as an effective tactic to protect them from the risk of being sued for an as yet identified incident?" I mean - what do you do? I mean, I have seen that if you go in with your assets with express risk of avoiding - for the express purpose of avoiding risk, you are not dealing with it and the Court will go for them anyway?

MR LOMBE: I have an interest in bankruptcy as well, as a Trustee in Bankruptcy. If a particular person becomes a bankrupt, and an assessment would be made as to whether they have disposed of assets, in the light of a claim - in other words, to defeat their creditors - if a doctor today disposes of his house by virtue of a sale to his wife, providing that sale was done legally and not as a result of a claim, well then that might be a valid disposition. Therefore it would be a matter of how long it took before a claim came in, or whether the circumstances - well, it was in fact a valid disposition of that asset .

CHARIMAN: Yes, I think I said I liable for their IBNR - - -

MR LOMBE: Maybe. But in the circumstances, it is not an unusual thing for professionals to do that. I think it is quite common and that advice is often given by lawyers to their clients, to divest themselves of assets if they are working in a profession where effectively their house and all their livelihood could be lost at age 60.

CHAIRMAN: So you recommend it?

MR LOMBE: I might recommend it. I think every individual needs to make their own assessment and take appropriate legal advice. But if an asset is disposed of simply in light of a claim, then that disposal is invalid.

CHAIRMAN: Invalid.

MR LOMBE: And the Trustee in Bankruptcy will call that asset back into the estate of that particular person and it will be available for distribution to their creditors.

CHAIRMAN: A question here. "If one decides to retire in a few months, or after July 2002, would one still have to pay the levy?" Has even that been decided, Kay Patterson?

SENATOR PATTERSON: Well, as Dr Phelps said where they are studying the issue of the levy, and I think that is their work in progress and I think to pre-empt what would happen in that situation I think is very premature and I think they are the sorts of levels of detail. And as I have said before, and I will keep saying, this is something we have not had to deal with before and we have come to the point of the levy and now we have to decide how that levy will be distributed.

DR PHELPS: The issue of retirees is one that we have already had the opportunity to discuss with the Prime Minister's Taskforce and retirees would not be caught up in this.

CHAIRMAN: There is a question from Dr Hope from Lismore. Good evening, Dr Hope.

DR HOPE: My question is to Mr Lombe. He made a comment about a possible gap in cover for United Members who have either recently left or may be considering leaving United. I would like to sort of draw him out on whether that gap in cover refers to prior to 1 January 2001, or subsequent 1 January 2001?

MR LOMBE: It is subsequent to January 2001.

CHAIRMAN: So subsequent to January 2001. Does that answer your question, okay?

DR HOPE: Yes.

MR LOMBE: What I would undertake to do, I think there is a number of relevant questions that are around this 2001 date. I mean, people have resigned already. What I would undertake to do is tomorrow publish some questions and answers which we have done previously on the UMP website, but particularly to deal with these issues because they are complex, they are tricky. I think sometimes in this sort of forum things can get misunderstood. So I will publish some questions and answers to deal with that issue tomorrow on the website to try and assist people to understand that sort of issue. But, again, I am not encouraging people to leave. I am actually encouraging to stay with UMP pursuant to the government guarantee.

CHAIRMAN: So that website is www.ump.com.au?

MR LOMBE: That is correct.

CHAIRMAN: www.ump.com - sorry, United MP is it, rather than UMP? We will just clarify that. I think it is ump.com.au, but we will come back to confirm that, later. Sorry about that confusion. Let us go to another question here, just really for the panel in general. Do you agree that the legal systems needs to be excluded from reaching compensation cases, not being subject of controls or accountable by audit?

DR PHELPS: It would have to do with thresholds, of course, and I think one of the issues that we really do need to look at is the amount of legal costs that goes into any settlements for patients, and particularly the smaller ones. I think, David, you can probably comment a little more on this having seen more of the finer detail of the MDO settlement, but it seems certainly from all that I have heard that a great deal of the money that ostensibly goes to patients goes into legal costs?

MR LOMBE: Look, I think that is certainly an issue. I would not like to sort of criticise the legal profession in that sense, but I agree with you, Kerryn. I think it is certainly an issue.

CHAIRMAN: And do you agree that a fairer and cheaper and more effective system for compensation should involve capping payouts, more lump sum, no-fault, and arranged by Commissioner Bird as exists with workers compensation? Kerryn?

DR PHELPS: I think we need to look at all sorts of different models directly into the future, but one of the things we must not do is to lose patients' rights to the appropriate care that they need, particularly in the event of serious injury and you also must not, I think, interfere with the doctor's right to practice medicine and the work that we are trying to do, and that is currently being impeded by the system of medical indemnity that we are currently facing. So, in order to find a balance, what we have to do is to work with the States and the Federal government to find models that will provide appropriate care to patients, be aware of patients' rights and also be aware of doctors' rights. And that is a delicate balancing act at times. Well, I think we are moving with every day.

If we can get the long term care and rehabilitation scheme set up and running, then I think that will make an enormous difference and then, State by State, as quickly as we can get all effective reforms into place.

And, let us face it, as I said before, the New South Wales court law reforms are a great template for the other States to go with, without reinventing the wheel, then we can - I think that that provides a very substantial framework for how we might proceed dealing with the other civil liability reforms that are being mooted around the country at the moment. We really do have, I think, glimmers of hope on the horizon.

CHAIRMAN: It is an act of trust, though, in governments, if you will forgive me, Minister, to say that the State will trust - as a patient, will trust that the services will be available in the new thinking that is going on in terms of how you will be cared for with what might be quite considerable disability. What guarantees are there for patients?

SENATOR PATTERSON: At the moment, we are still working on that systems of care for people who are seriously injured or who have long term rehabilitation needs and I think this whole exercise has had to be one of trust because it is a whole new approach to medical indemnity and, as I said before, it cannot happen. For example, the legislation that Senator Coonan brought into the Chamber, or brought into the House of Reps which will come into the Senate, has to have the cooperation of States to be implemented.

So, there is a certain amount that the Commonwealth can do, but there has got to again be a level of cooperation with the States. So, we have this whole new world that we are moving into. It has to be based on a lot of trust and I think it has been to date, and I think we have seen enormous strides in what was at Christmas time, a very serious crisis. And I think we have moved in six or seven months a very long way, especially with the States suggestion in issue as well, and I think it is due to a very good working relationship with the AMA and it also the pressure that has been brought to bear on the States, but also I think that forum was a formidable time as well as acknowledging that something needed to be done, and be done very quickly. And I had - I could emphasise more clearly at that forum. I kept saying that the States really needed to address the reform as quickly as possible because there was the risk that if it is out of kilter, it is has got problems. So we had keep all running along as quickly and as smoothly as possible.

CHAIRMAN: It is unitedmp.com.au, so forgive me for mistrust. So, it is www.unitedmp.com.au for those questions tomorrow and I will give you that at the end. We have got another call, Dr McCallum from Sydney on the line. Good evening, Dr McCallum.

DR McCALLUM: Good evening.

CHAIRMAN: Your question?

DR McCALLUM: My question was, why are UMP members being encouraged to stay with the organisation? It does not seem a very good deal in terms if you have to pay the levy, and the cover is not guaranteed for very long. I was wondering if, particularly some of the people there could explain that to me?

SENATOR PATTERSON: Well, if I could say that you are thinking UMP so that you could escape the levy, then you are out of luck, unfortunately, because the levy, if it comes in and another reform, will apply to anyone who was a member of any MDOs with unfunded IBNRs, any time from 1 January 2001. So anyone who left any time after 2001 - January - will still be up for the levy for the unfunded tail, no matter which MDO you belong to which might have had an unfunded component at that time.

CHAIRMAN: What other costs will you be up for, if you decide to abandon? David?

MR LOMBE: You will still have to pay the call. The call is a debt on the company, to settle the debt of a company, and that relates to a prior near call. It is just simply that the company will allow doctors to pay it off. So you would certainly still have the call to pay and one of the costs you would have in transferring to another MDO.

CHAIRMAN: And with that, any outstanding premiums as well?

MR LOMBE: Yes, absolutely. Yes, absolutely.

CHAIRMAN: I hope that has answered your question, Dr McCallum, thank you very much. So, off to practice in Monte Carlo perhaps might be the only option - but do not come back, because we will get you. A question for you, Kerryn Phelps, what assurance has the Prime Minister give you that his proposed national call on members of unfunded MBAs will not impose on GPs any financial subsidy for the more highly specialist colleagues? A collegiate question, if I might say so.

DR PHELPS: There are no assurances at all except that there will be consideration given to retirees, people in the higher cost specialties and junior doctors who are facing the beginnings of their careers. Clearly there will need to be assurances given to other doctors in other categories, such as part time general practice. However, that being said, it all sounds a little indistinct because that is how it is at the moment. The levy news really only came to us a couple of weeks ago and there has not been the opportunity to sit down and really talk turkey at this stage, but we will be planning to do that over the coming months, and suffice to say that the tail will become more manageable and therefore whatever levy is agreed to, much smaller, provided we can get these reforms into place. And if we can get these reforms into place, then everything becomes more manageable, including not every levy may have to be paid, and including the future.

CHAIRMAN: Question to you, David Lombe. If I resign my membership from UMP but change my mind within 28 days before the policy has expired, can I rescind my resignation?

MR LOMBE: Well, my understanding is that you can, you are able to do that.

CHAIRMAN: And is there a time limit on this rescinding?

MR LOMBE: Well, within the 28 days.

CHAIRMAN: So, within the 28 days. A further question for both you, Kay Patterson, and Kerryn. We have heard what the problems and implications are now. What is going to happen over the next 12 months? What can we look forward to? What is ahead?

DR PHELPS: The crystal ball question.

CHAIRMAN: Absolutely. If you are .....

DR PHELPS: Absolutely. A lot of it is unknown and so it is impossible to say, you know, this is exactly what we are expecting over the next 12 months. But I think what we can predict is that there is going to be an incredible amount of activity behind the scenes, that the AMA has committed a high level taskforce to work with the Prime Minister's Taskforce. We have set up lines of communication. I am able to call the Minister. I am able to call the Prime Minister's office to discuss any concerns that we have and make sure that there is an open communication so that the pieces can fall into place. We also have on - very much on the game, every State AMA and - State and Territory AMA and they are all working with their respective governments to ensure that there are politicians in those - in other words are well aware of the urgency of tort law reform State by State and the need to have some harmonisation of those reforms.

So, there will be an enormous amount of activity, particularly in the next six months. I am hoping very much that by the time the government' guarantee of 31 December reaches its conclusion, that those reforms will be in place and that the six months after that, maybe everybody who has been involved in legal medical indemnity cases can perhaps sit back a little and take a few deep breaths and see how the reforms are going to work in practice.

CHAIRMAN: Senator Patterson?

SENATOR PATTERSON: Well, I would have to agree with Dr Phelps and the thing is I would rather be looking into the crystal ball at this time, this year, than this time, last year. And I think I can actually see ..... than anybody could have. Last year, the States - really none of the States had really addressed the issue, then the need for law reform, and the need for statutes of limitation, I think it has been impressed on everybody and I do not think there is a State Minister who is not aware that there is a need for reform. I think it is not only now Health Ministers who know about it. It is Attorney-General's, and it is Treasurers at the States and at the Federal level, so I think people's minds are much more focused on it and maybe as painful as this has been for all of you, and as difficult as it has been for everyone, I know that it has been incredibly difficult and it is unsettling and very stressful. Maybe we needed to have this crisis to really bring to a head the issue that we have been talking about tonight, to actually have a long term, sustainable medical indemnity, and that is really what we want.

And I think it is - I hope we will be able to sit back and take a deep breath in January and February, and I will be working hard to ensure that. But hopefully, you, too, will be able to take a deep breath, knowing that you have got a medical indemnity system which is much more affordable into the future, and I think that is what we all working towards.

CHAIRMAN: Senator Patterson, thank you. And I would to thank you, Kerryn Phelps, David Lombe and Ken Mackey. It has been a very productive discussion. We have got many more questions that people have asked or faxed in tonight, and we have not been able to answer all of them. But these questions will be posted, and answers will be posted in the Federal AMA's website at www.ama.com.au. And as you have heard, they will also be on the UMP's website and that is www.unitedmp.com.au. So thank you very much again to you all for coming on tonight's program. If you are interested in obtaining more information about the issues raised tonight, here are some resources and contacts for you.

The Commonwealth Government has established a hotline to answer any questions you may have. The Minister has already given you that number, but I can give it again. It is 1-800-007-757 - 1-800-007-757. And it is open from 8.30am to 6.30pm, Monday to Friday. You can also get into a number of websites, and these include the Australian Medical Association's one which I have just given you. It is www.ama.com.au. And they have got regular updates on medical indemnity issues. Or you can call the AMA's office in Canberra, and that is on (02) 6270 5450 - (02) 6270 5450.

And United Medical Protection also puts regular updates on its websites and as I keep on telling you, it's - I do not know where you got the idea it was UMP - it is www.unitedmp.com.au and David Lombe will in fact put out some of these more detailed questions and answers on the website tomorrow. And the Royal Doctors Association of Australia also has a website, not to be outdone, and theirs is www.rdaa.com.au. All the contacts details, along with the website links, will be placed on the Rural Health Education Foundation's website, which is at www.rhef.com.au. You can also obtain a video copy of tonight's program by calling the Foundation on 1-800-6460015 - 1-800-646-015 or you can write to us by logging on to the website at any time.

The next program will take place on 25 June. It is on the management of diabetic retinopathy and this will be followed by the secondary prevention and rehabilitation of cardiac disease on 23 July. Other programs scheduled for the rest of 2002 include prostate cancer, and erectile dysfunction, cervical cancer, allergies, arthritis, and the human health of Royal Committees. I hope you have enjoyed tonight's program and I hope you find it useful information. There is an evaluation form in the Foundation's website, so please take a minute to complete it. And I hope you will still be practising after 1 July so that you can join in and contribute to our programs as always. And, of course, the program is accredited for CPE points, so please register by completing the attendance on the appropriate form. Above all, thanks always to you for attending and taking the time to contribute. I am Norman Swan. Good night.

Ends

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