Medical indemnity rescue package: affordability and security delivered, but still concerns about the long term

Dr Glasson said that Health Minister Tony Abbott had achieved a lot in two short months but Cabinet had denied him the total package he had sought to satisfy the concerns of doctors and patients.  Senator Coonan, too, has worked hard for a positive outcome.

"The package announced by the Government today has delivered some significant benefits to doctors and patients, but whether they address the long term sustainability of the system remains to be seen.

"On the surface, though, the issues of affordability and security have been addressed.

"The Government says it will give this package around 18 months to prove itself and the AMA will go along with that timeframe.  Any shortcomings must be addressed over that period.

"It will be a big test for the medical defence organisations (MDOs) to get their houses in order and provide better, more affordable products.  The package provides for greater regulation and control of the MDOs.

"The AMA will be seeking to work with the MDOs on risk management to achieve the highest levels of patient safety.

"We have always set three tests for this package - downward pressure on premiums, consistent national tort law reform, and a long term national care scheme for the severely injured.  These must be met if long-term security for doctors and patients is to be achieved.

"The Government's maximum 7.5 per cent of gross medical income threshold on premiums and IBNR levy should make medical indemnity premiums lower for most doctors.

"The 7.5 per cent threshold must not become an incentive for MDOs to artificially push premiums for lower risk specialities upward towards that threshold.

"We are confident that this package will ensure that doctors who now currently pay three or four per cent of their gross income will continue to pay that amount.  We will be monitoring this closely.

"Some doctors, however, will fall through the cracks but the AMA will work to ensure they are not disadvantaged.

"Reduced premiums will translate to better access and affordability to medical services for patients and this is a very welcome outcome.

"We welcome the reduction in the UMP IBNR levy, which guarantees that no doctor will pay more than $24,000 over six years in total.

"UMP doctors who previously faced a total IBNR levy burden of $400 million to $500 million will now contribute just $130 million.  This is a significant concession from the Government.

"The AMA believes that in broad terms the package will provide certainty and security and affordability to allow doctors to continue practising.  They will make individual decisions about their individual practices once they have had a chance to judge how the package impacts upon their own situations.

"State and Territory Governments must continue their work on tort law reform to ensure there is national consistency.

"The Australian Government must strengthen its commitment to establishing a long term national care scheme for the severely injured.  This important element of long-term stability has been given lip service in the package. 

"All Governments must put better patient care ahead of excuses over cost shifting.  Contrary to the complaints raised by some sectors of the legal profession, the long-term care scheme would enhance patient rights and patient care.

"While the package has not delivered all that doctors and patients require, the AMA believes doctors and their patients can go to Christmas with greater confidence in the system.

"There will still be uncertainty among some doctors and I urge those doctors to contact the AMA for clarification of their situation and support.

"The AMA will closely monitor the implementation of the package and work closely with Governments to build a medical indemnity system that will safely serve future generations of Australians," Dr Glasson said.

Dr Glasson said the AMA has asked the Government to urgently look at the following:

• Subtracting estimates of speciality practice costs as set by the Relative Value Study (RVS) from doctors' gross incomes used to set the 7.5 per cent threshold
• Ensuring that lower paid and part-time GPs are not disadvantaged by the threshold formula
• Monitor MDOs to ensure there are no attempts to artificially inflate premiums of low-risk doctors upward to meet the 7.5 per cent threshold
• Conduct economic modelling of gross income bands to ensure fairness and equity in both premiums and subsidies.

Dr Glasson said the AMA would spend the next few days discussing the package with its members and other medical groups to plan future strategies to improve medical indemnity.

CONTACT:         John Flannery            (02) 6270 5477 / (0419) 494 761
                       Judith Tokley             (02) 6270 5471 / (0408) 824 306