Coonan admits IBNR levy will hit patients hard

Dr Glasson said Senator Coonan's candid admission adds further weight to the AMA's argument that the IBNR levy must be abolished or delayed in order to avoid crippling medical workforce shortages and higher health bills for patients.

"Senator Coonan has today produced figures which present a compelling argument against the IBNR levy," Dr Glasson said.

"She has shown clearly that patients will be hit hard by the levy and the impact of increased medical indemnity premiums.

"Senator Coonan has released best case scenario calculations of the cost impact on patients from the imposition of the levy.

"When you combine the impact of the UMP 'call', the increased medical indemnity premiums and now the IBNR levy, patients who see lower volume GPs will be asked to pay more than $1 more per GP consultation - much higher than the 40 cents cited today by Senator Coonan.

"The AMA will be keen to see the Treasury modelling of the impact of the total indemnity crisis on patients.

"It will totally wipe out any claimed patient benefits contained in the A Fairer Medicare package before they've arrived," Dr Glasson said.

Dr Glasson said the figures released at today's media briefing by Treasury officials were very rubbery and the AMA gives them no credibility.

"They did, however, make one important point.  Doctors are being asked to surrender up to 8 per cent of their income to pay the IBNR levy.  I wonder how many professionals in the community would be prepared to do the same."

Dr Glasson said a cursory analysis of the Treasury figures reveals the following:

1.      The Government has no knowledge of net medical incomes.  They have no knowledge of medical practice costs.  Even so, on their own figures many specialties will be taking a large reduction in their net income if the indemnity cost increases are absorbed.  For example, orthopaedic surgeons are being asked to surrender almost 8 per cent of their income to pay the IBNR levy alone.

2.      The surrendered income is yearly for 10 years, perhaps longer. 

3.      80% of specialist inpatient services are provided under no gap schemes.  To participate in the schemes, doctors have to charge according to the Health Fund Schedule.  If doctors stay in these schemes, they cannot pass on increases for services covered by those schemes.  They will pass them on unevenly across their profile and the gap impact will be much greater than the Government figures show.

4.      The gap impact will be much greater for doctors who do fewer services than the number on which the figures are based.

5.      The number of normal deliveries at MBS fee an Obstetrician has to do to cover the indemnity premium has risen from 50 in 1995 to 150 in 2002, knee replacements for Orthopaedic Surgeons from 25 to 72 over the same period, and Gall Bladders for General Surgeon from 30 to 50.

Dr Glasson said Senator Coonan has today explained the Howard Government's new tax on health.

"This is a $50 million tax grab that will hurt the sickest in the Australian community.

"It is a tax on patients that has no chance of being returned even if the medical indemnity environment improves and premiums are reduced.

"It will make the cost of essential health care more expensive for many Australians.

"It is an unjust tax that should be stopped, " Dr Glasson said

CONTACT:          John Flannery                        (02) 6270 5477 / (0419) 494 761

                        Judith Tokley                        (02) 6270 5471 / (0408) 824 306