Dr Kerryn Phelps, AMA President - Medical indemnity and workers in the public health system

QUESTION: Is it exactly what you asked for?

PHELPS: This is what we were asking for and more. This will ensure that the indemnity crisis can be dealt with on a national basis. We want to see the other state governments get on board, follow the example of the New South Wales Government and ensure that there is tort law reform so that we have a system that works better and is just for all people.

QUESTION: Craig Knowles has been giving himself a pretty big wrap for this today. Does he deserve it?

PHELPS: Mr Knowles deserves credit for this move. It has been a difficult process, it is one that has involved a lot of lobbying, a lot of discussion, a lot of conversations with a large number of stakeholders. The medical profession has been calling for these sorts of reforms for a long time and I have to say that we are delighted with the outcome.

And I think that the community will also be delighted. People have been worried about losing their health services. I think that they can be quite secure knowing that their health services are now safe.

QUESTION: Were you surprised at such a generous package?

PHELPS: I think it was inevitable that we had to see a dramatic solution. I'm just pleased that this is a very early Christmas present for the people of New South Wales.

QUESTION: Did you have to something in return for this? Do you have to commit yourself to certain things? Is everyone happy with that? And what are those things?

PHELPS: Provided that the colleges and the medical profession have control of the standards for our profession, the medical profession is more than happy to look at risk management processes, to look at how safety can be improved, how the quality of the whole system can be improved for the benefit of our patients.

QUESTION: Are you slightly shocked at this development?

PHELPS: I had a bit of advance warning so I can't say I'm shocked today but- -

QUESTION: But when you first heard they were prepared?

PHELPS: Yes, Mr Knowles called me yesterday afternoon and explained the results of his discussions with his Cabinet colleagues and, of course, we were delighted and somewhat surprised that we had such an immediate solution but, of course, I guess, everyone's backs were against the wall with the premiums due on 1 January and many specialists saying that they would not be able to afford to continue to work after 31 December. So surprised, delighted, the medical profession, I think can be quite rightly pleased with the action that the State Government has taken.

QUESTION: Isn't this a case that the Government was simply confronted with what was fast approaching a reality, that three days before Christmas, well, this actually was going to happen? There were actually going to be doctors walking out of the public hospital system, they were confronted with no choice but to take this course of action or was it an act of generosity and altruism?

PHELPS: The State Government has responsibility for the smooth running of the public hospital system and there's no question that the system would have been without doctors in critical areas like obstetrics and neurosurgery by 31 December. So I think the urgency was certainly detected by the Minister and acted upon by the Government.

I'm also pleased today that the Prime Minister has announced a summit to look for a national solution to the indemnity problem. This is not confined to one state. It is a national problem and the sooner we get all parties together to discuss solutions on a national basis, the better off for the patients and for the health system of Australia.

QUESTION: What are your expectations for private doctors? That issue remains outstanding.

PHELPS: The issue with private doctors is that they will simply have to set their fees to account for the medical indemnity premiums but I think with a national summit we'll be able to find solutions to make sure that medical indemnity is affordable and that the fees that are passed on to patients are reasonable.

QUESTION: Given that public risk has now been transferred to the State Government, would the UMP premiums for other doctors who work exclusively in private practice now go down given that that risk has been transferred?

PHELPS: There's no question that there will be a substantial reduction in premiums charged by the medical indemnity insurers. That must happen and we would be calling on UMP to ensure that all savings are passed on to premium reductions.

QUESTION: That would require new premiums (unclear) will they be able to pay the lower amount by then?

PHELPS: The premium notices already went out on Friday 14 December, leaving only two weeks to pay by 1 January. I think that we will be expecting an announcement from UMP within the next few days to tell doctors what they should be doing in terms of their premiums for the next year because there certainly will be a reduction. We just need to find out exactly the size of that reduction and how doctors should go about paying their premiums for next year.

QUESTION: Can you give us a ballpark figure on that?

PHELPS: We haven't had the final figures from UMP but the reductions will be substantial.

QUESTION: What do you think this decision today means for patients of public hospitals?

PHELPS: Patients in public hospitals have been facing the risk of losing specialists in key areas like orthopaedics, obstetrics, plastic surgery and neurosurgery and this announcement today will ensure that the doctors are able to keep working in the public hospitals in providing those valuable services.

QUESTION: In terms of this industrially, you'll have, what, peace for five years, that the commitment, that there will be?

PHELPS: The commitment is that the doctors won't go back to arbitration for five years and so they're basically happy with this deal for the next five years. I think it will mean peace in the public hospitals for the next five years.

QUESTION: What was the deal sealer? What was it that really sort of made it all come together?

PHELPS: I think there are a number of factors that came together all at once. I think that the collapse of HIH, the global insurance and reinsurance problem, the fact that the doctors who are working in the public system who want to keep providing those services to public patients were saying we simply cannot keep working, we've been absorbing the cost for years and it's reached a point where actually the indemnity payments are going to be costing us more than we're earning from the public hospital system. And so the whole thing had become completely unsustainable.

And combined with the tort law reforms, combined with the structured settlements announced by the Federal Government, we really have, I think, the foundation for a very firm future for medical indemnity so that patients who are injured will get the care and the care cost that they need. We will have a medical profession that is able to continue to work without patients having to pay unaffordable medical fees to get high risk procedures done like brain surgery, spinal surgery and having babies.

QUESTION: Where's the money going to come from? Did the Minister say? Given things are so tight in his budget proposal. How much is it, do you know?

PHELPS: The Minister has announced today that the money will come within the next budget. It's been budgeted for. You'd have to ask him.

QUESTION: Is he just going to add it onto the next health budget?

PHELPS: I think it will probably come out of consolidated revenue. I don't think it will just come out of the health budget. Thank you.

Ends