AMA Federal President, Dr Bill Glasson - Speech to the Australian Orthopaedic Association, Adelaide - Medical Indemnity The Long and Winding Road

Fellow doctors...

As always, it is a great pleasure for me to talk to medical colleagues.

Today it is an even greater privilege...given the amazing developments - and outcomes - of recent weeks.

Last Friday was a very big day for our profession and our patients - a very important day indeed.

Our battle over medical indemnity has been a long and winding road...most of it uphill.

It has taken up most of my short time as AMA President.  If the Government commitment to fix the indemnity system by Christmas comes true, every second on this task will have been well spent.

Friday's outcome must be put into perspective.  It was pretty bloody good.

The AMA and the Government have agreed on a framework for moving forward in solving the medical indemnity crisis.

We made huge progress over 12 hours from a Government that, quote, "would not give in to a ransom demand" to the equivalent of "peace in our time".

The Government has fully accepted that the medical indemnity system in Australia needs to be fixed and will be fixed.

The Government acknowledges that the spectre of continuing high medical indemnity premiums and lack of security would not give doctors the confidence, security or motivation to keep working.

The Government knew that access and affordability of medical services for all Australians would disappear if the medical indemnity system was not reformed.

The Government also acknowledges now that medical indemnity is an international problem and that doctors are not responsible for the crisis.

To his credit, Tony Abbott has shown a solid understanding of the problem and has displayed a strong commitment to finding a workable and sustainable solution for doctors, patients and the whole community.

We welcome the withdrawal of ALL the IBNR levy notices and the decision not to issue any new notices until after the policy review committee reports in December.

Any levy already paid by doctors will be refunded.  That's great news.

As an act of goodwill, the AMA has given the Government an assurance that there will be no further calls for financial assistance during the review process.

We also deferred our marginal seats campaign.

We welcome also that the Minister will personally chair the policy review committee.

The committee will comprise two doctors, a lawyer well versed in insurance issues, an actuarial expert, and Assistant Treasurer, Senator Helen Coonan.

The AMA will be consulted on the selection of doctors to serve on the committee.

A key task of the team will be to ensure that doctors' indemnity insurance is affordable and covers their working life and retirement - the so-called 'claims incurred' cover.

The AMA is confident that the Minister will not allow this small, highly skilled team to get bogged down in bureaucracy.  We only have two months to get this thing fixed for good.

Outcomes agreed by the Government and the AMA last Friday include:

• Extending the high cost claims scheme to cover 50 per cent of claims between $500,000 and $20 million

• Treating claims under the Exceptional Claims Scheme on a 'claims incurred' basis

• Fully indemnifying doctors for the component of any settlement above $20 million under the Exceptional Claims Scheme

• Exempting from the IBNR levy all doctors employed by pubic hospitals or where their private income is returned to those hospitals

• Exempting all doctors aged 65 and over from the IBNR levy, regardless of practice income

• Exempting all doctors from the IBNR levy who need to retire early because of disability or permanent injury, and

• Exempting doctors and their estates from the final year's IBNR levy liability due in the year of their death.

The Government assures us that these measures will all be implemented at the earliest possible opportunity.  Trust them, they are politicians!

The AMA finds it refreshing that the new Minister has displayed an energetic and sincere willingness to examine and repair the whole medical indemnity system so it can no longer haunt the medical profession and patients.

The plan of action, if taken to the desired conclusion by December, should put an end to the crisis.

The AMA will continue to meet with the Minister and his advisers to resolve any outstanding issues to ensure that the review proceeds effectively.

However, the Government has been warned that if the review does not fix the system, we could be back on the medical indemnity rollercoaster before Christmas...and it won't be a pleasant ride.

As you know, the medical indemnity issue has a life as long as the Statute of Limitations for children.  It is ongoing.

Getting the Federal Government involved in early 2001 was the start of the beginning of what we hope will be the end.

We have achieved prudential regulation (with the security it brings against another market failure).

The MDO structure has been retained in the new insurance framework.

We have guarantees in place at present that ensure that no doctor is personally liable for damages awards.

Our work with Government on the DDR scheme is progressing well.

The AMA's object here is to ensure that indemnity cover is affordable, paid for during the doctors' working life, and gives complete cover in a doctor's retirement.

This work has now been complemented by - not overtaken by - the plan we developed with the Government on Friday.

The 'blue sky' guarantee, (the Government's 'exceptional claims scheme') has been improved to operate on a 'claims incurred' basis, so that claims made after the winding up of the scheme that arose out of any incident that occurred during the scheme are covered.

The Government has extended its high cost claims scheme to cover 50% of claims between $500,000 and $20 million.  It will fully indemnify doctors for the component of any settlement above $20m under this scheme.  These costs will not be passed back to MDOs or doctors.

All current IBNR levy notices will be withdrawn until the review process is complete - good news for those rural docs in South Australia who were joined up to UMP by the State Government, for the moment.

Any new IBNR levy will be calculated on funds spent in arrears and not on actuarial estimates

To recap, exempt from the new levy are:

Doctors over 65 regardless of practice income,

Doctors who retire early because of disability or permanent injury,

Doctors and their estates from the final years' IBNR levy liability due in the year of their death.

Doctors employed by public hospitals or where their private income is returned to those hospitals.

So where does that leave us, and our patients now?

We still have a fight on our hands.

The fight is to convince the government that the current system is still broken.

It needs to be fixed for the long-term.

It is a tall order for this to be achieved by 10 December, the date the review committee is to report.

Affordability and security are the issues.  A sustainable medical indemnity and compensation system into the future must be secured.

A new model is needed.

One that provides injured patients with the care they need when they need it.

This requires removal from the court system that component of lump sum damages for long-term care costs.

The care and services injured patients need have to be provided through a community funded long-term care scheme.

The pressure has to remain on the government in the run up to the election.

Medical Indemnity has to be fixed once and for all for the future of our patients and medical practice in Australia.

The 'blue sky' issue remains as the government's scheme to cover the 'blue sky' liability, but it can be withdrawn at its discretion at the end of its initial operation period of three years.

The government says it will operate for so long as it is required.  We'll see.

Once a new, affordable and sustainable indemnity model is in place, the 'blue sky' scheme should no longer be required.

If a sustainable model is not put in place, medical practice and our patients will suffer.  We will see:

• Unaffordable health services and restricted types of service

• Loss of medical workforce and difficulty in recruitment

• Impact on clinical practice of doctor insecurity and low morale

• A tendency to defensive medicine.

We won't let this happen. We must remain united. The Colleges and the AMA must work together.

The next two months are all-important.

We have invested a lot of faith and trust and goodwill in the new Health Minister.

We have done the right thing by the Prime Minister and his Government.

More importantly, we have done what I strongly believe is the right thing for the medical profession, our patients, and the Australian community.

We have given the Government a 'fair go'.

If they stuff it up, we will be back at square one.

I hope it doesn't come to that.

Thank you.