Dr Trevor Mudge, AMA Vice-President, with Philip Satchell, Radio 891 ABC

MUDGE: Well, it's a very complex business, David, isn't it? I think Mr Grainger makes a lot of good points. Every industry of course has cross-pressures. Every industry has to charge a fee that will recoup its costs and make a profit. And I guess health insurance is no different.

And, certainly, medical costs are soaring, not because of doctors' fees but because of both private hospitals and doctor costs, including, as Mr Grainger says, the escalating costs of medical indemnity insurance which went up by 50 percent last year. For us obstetricians, it's now $65,000.

COMPERE: How does that affect the mutual community, for example?

MUDGE: It doesn't much, that's true, but it's just an index I think. It's the same, the costs are going up for hospitals as well, for their professional indemnity. Costs are rising across the system. I guess the only - perhaps the important thing to say is that an industry which is subsidised to the tune of $2 billion by the taxpayer probably ought to be pretty transparent in terms of opening its books when it applies for an increase.

COMPERE: Now just with these insurance claims or the cover that you have to have: Is that sending people now seriously out of obstetrics and gynaecology?

MUDGE: Week by week, more and more obstetricians are giving up obstetrics and practising gynaecology only. Obstetrics is becoming very difficult to access for country people. Unless there is an outcome of the Prime Minister's summit on medical indemnity, which we expect to be held in April, then I think there is going to a big impact particularly on country services, Philip.

COMPERE: Yes, I suppose that's inevitable. Trevor, thank you. Dr Trevor Mudge who is Vice President of the AMA. Well that's the background basically to our health insurance premiums. Seems to be certain that they'll go up to some extent but we'll just have to wait and see until after March.

Ends