Dr Trevor Mudge, AMA Vice President, with Mark Colvin, ABC Radio, 'PM' program
COLVIN: The world's biggest medical insurer has pulled out of medicine. The medical profession will have to insure itself without the St Paul Insurance Group. It's part of a growing crisis in health care with another major insurer, United Medical Protection, yesterday announcing huge hikes in the costs of premiums. The Australian Medical Association says some medical procedures in this country are now virtually uninsurable. Rachel Mealey asked Trevor Mudge, the Vice President of the AMA, what affect this might have.
MUDGE: Well, I think St Pauls is the organisation with the biggest experience in the medical indemnity area worldwide. They're probably nearly in order of magnitude bigger globally than any of the other players. For them to make a decision to withdraw from the medical indemnity market is really saying that they consider that medical professionals are uninsurable under the current system. Now, this is the message we've been giving the Government for the last two years. Unless something is done to spread the risk in medical indemnity insurance then we aren't going to have medical professionals to provide the services.
MEALEY: What might be behind St Paul and other insurers pulling out of the medical indemnity business?
MUDGE: The total inability to estimate the future liability. I could deliver a baby today and be sued in 27 years' time for some … say for cerebral palsy, for future care needs, which, who knows, might be instead of $15 million like the Calandre Simpson one, may in 27 years be 15 billion? Who knows what the amount will be? And therefore it has become impossible for actuaries to estimate the risk with sufficient certainty to make the business runable.
MEALEY: In an increasingly litigious society though, those sorts of claims aren't going to go away. How can doctors protect themselves against it?
MUDGE: If society wishes to have a system of access to tort law which allows $15 million settlements for future care for the neurologically impaired - and that's a decision that society is free to make and it's a good one - we have to find a bigger pool of people paying for that cost than we have at the moment. At the moment that cost in obstetrics is being shared by the 250,000 women who deliver, every year. We really need that cost to be shared by the 20 million of the Australian population. We have to spread the pool over a bigger background.
MEALEY: Are there other insurers out there that will pick up the slack from St Paul?
MUDGE: No, there aren't. St Paul has only recently come into the Australian market probably 12 or 18 months' ago so they haven't got very much penetration in the Australian, market anyway. They are, as I said, the biggest medical indemnity insurer around the globe and it's very hard to know where that pool will be picked up. I guess, internationally, it will be picked up by other insurers if they, provided the other insurers, are prepared to take the risk that clearly St Paul is no longer prepared to run.
MEALEY: Can you give me an example of how this might impact, or how the medical indemnity crisis might impact on the individual doctor at the moment?
MUDGE: Well, obstetricians, like myself, are faced with two choices - and other doctors will have a similar choice, but it mostly affects obstetrics first. Either we have to significantly increase our charges to patients, or we have to get out of the business of delivering babies. Now, either way society will bear the cost of that.
COLVIN: Trevor Mudge, Vice President of the AMA, with Rachel Mealey.
Ends