Dr Michael Sedgley, AMA Chairman of Council, with Mike Carlton, Radio 2UE

But doctors are in serious trouble. Here in New South Wales, the company that insures them, called United Medical Protection Fund, is within a centimetre of going to the wall. It needs $30 million in a matter of weeks if it's to survive. If it doesn't survive, New South Wales doctors won't be able to continue private practice. It will be against the law for them to do so without insurance cover.

Right around Australia the problems are similar, with doctors' premiums, insurance premiums absolutely going through the roof. It is a real and genuine crisis and I want to look at it again.

On the line, Dr Michael Sedgley, who's the Chairman of the AMA Council. Good afternoon.

SEDGLEY: Good afternoon, Mike.

CARLTON: It really is serious this, isn't it?

SEDGLEY: Yes, it is. You said since September 11th, but for us it's been getting worse and worse over the last 10 years. But it's the same sort of thing that's happening now in all other areas of society. It has been happening for a long time to doctors, but it's now getting to a point where it's intolerable.

CARLTON: I know it's probably difficult to put a figure on it, but for the average - I don't know - suburban GP, what sort of premiums are they being asked for now?

SEDGLEY: Well, I can't give you an exact figure on that, but it's the sort of thing that they are looking at is minimum of 20-30% of their total income. In other words…

CARLTON: So if they're making $100,000 a year they need to come up with what, $20-25,000?

SEDGLEY: More like about $30-35,000 at that sort of level of income, yes. So it's really becoming your biggest expense of your practice, perhaps even more than tax.

CARLTON: But that's just unsustainable, isn't it?

SEDGLEY: It is. I was very interested to hear in your preliminary comments, you said just private practice. Actually, if UMP does go to the wall, doctors in New South Wales under the latest legislation that I'm aware, can't practise at all. So you say there's just no…

CARLTON: Well, no, the New South Wales Health Minister, Craig Knowles, says the State Government's agreed to underwrite doctors in public practice, where they work in the public system.

SEDGLEY: Yes, but if you don't have any medical indemnity insurance through UMP, if it did go broke, then you just can't practise. I suppose that he'll keep the doctors in the public system that way, yes. But that doesn't of course cover general practitioners.

CARLTON: No, no, it doesn't.

SEDGLEY: And should UMP not be able to make it, a lot of the New South Wales general practitioners are insured with them, and that means on the 1st July, all of a sudden, they're no longer registered as doctors to practise.

CARLTON: It would be illegal for them to practise, wouldn't it?

SEDGLEY: That's correct.

CARLTON: So this is absolutely at crisis level, isn't it?

SEDGLEY: Total, yes.

CARLTON: The state says that it needs to be guaranteed by Canberra, that Canberra must, as a matter of urgency, underwrite the $30 million that UMP needs, while a longer term solution is found.

SEDGLEY: That's a very difficult one. Of course, UMP covers 90% of doctors in New South Wales. I'm not sure in Queensland, about the same, I think. Around Australia it covers about 60%. So there are three, I think, or four other players in the industry.

Now, they don't have the same critical problem at the moment, but I think that the Federal Government has to look at the whole industry and say why is this happening. I mean, UMP are obviously - seem to be at the moment in a much more sensitive position. The other organisations don't have this problem. But it's a structural problem in the industry, a structural problem in the whole of insurance.

But from our point of view, if we want to preserve or if the community wants medical services preserved, it's really going to have to do something about it pretty quickly, and I think that it's right across the industry that it has to be done.

CARLTON: So it's going to need urgent - is it going to need - urgent concerted action from State and Federal Government?

SEDGLEY: It does, and that of course has to happen through the Australian Health Ministers' Advisory Council, and that is a very slow process. The Prime Minister is holding a summit on the 23rd April and it's hoped that something really specific will come out of that. It has to.

CARLTON: Yes. Well, the New South Wales Government is saying, "Look, we want a guarantee before that so that we can then work on long-term solutions." That's basically what they're saying. That's a reasonable thing to ask, isn't it?

SEDGLEY: I think it is a reasonable thing to ask now. I mean, the New South Wales Government have made some pretty positive contributions in the area by taking over the liability in the public sector, something they had to do, but they've done it and done it well, I think. In my view they've done it well.

And so now the whole industry has to be looked at across Australia and that's a federal prospect.

CARLTON: Well, let's hope something comes of it because it is literally at crisis proportions. It's hard to exaggerate, isn't it?

SEDGLEY: It is. We've been talking about it for a long time and talking about it in the media, but now I think something really has to be done in the next couple of months. It can't be left for another year and another round of talk fests and negotiations. Someone has to make a move, someone has to do something.

CARLTON: Yes. Thanks very much for your time.

Ends