AMA Calls for Government Action on Medical Indemnity Crisis

"Many of the problems with medical negligence law lie at state level. However it is a national issue and we are calling on the Attorney-General to take a national leadership role," Dr Phelps said.

She said medical insurance costs were rising by 15 to 25 per cent a year as Australians increasingly resorted to litigation to solve grievances and courts made larger and larger awards.

"Rural GP-obstetricians have been among the first specialties to 'down tools'. According to some estimates, in NSW alone, numbers of rural GP obstetricians have dropped to just 10 per cent of the numbers practising 10 years ago.

"We have been told by rural doctors, for example, that GP-obstetricians in Orange have dropped from nine to zero, in Bathurst from 17 to 10 and in Tamworth from three to zero, in the past three to four years," Dr Phelps said.

She said specialist obstetricians, who were left to shoulder much of the burden in larger rural communities, were paying about $40,000 a year for their indemnity costs.

Dr Phelps said the system of handling medical indemnity was expensive and unwieldy and urgent reforms were needed, including:

• capping of claims to limit medical damages payouts
• introduction of 'structured settlements' or payouts in instalments
• further development of risk management activities by medical defence organisations and commercial insurers, and
• alternative dispute resolution.

"This issue should be on the agenda for all Attorneys-General, Federal and State, at the next Standing Committee of Attorneys-General. The AMA is ready and willing to work with all relevant parties," Dr Phelps said.