Speech by AMA President, Dr Bill Glasson to Holy Spirit Northside Medical Association, Brisbane - The Medical Indemnity Challenge

Good evening.

It is a pleasure to be here among the frontline medical troops - Australia's hardworking doctors and other health professionals.

Times are tough for doctors and our patients.

While the talk this week is all about Medicare policy, the big underlying issue for the Australian health system is medical indemnity.

I was recently asked to deliver a speech with the title - "Will there be any doctors working in Australia in 2010?"

The answer: we'll know on December 10 when Tony Abbott enunciates the Government's solutions.

All the signs are there for a positive outcome.

But if the same question was asked two months ago - before 4000 doctors showed up at Randwick Racecourse in Sydney on 28 September to display their anger and frustration - the answer could have been very different.

The bottom line is that without big changes to the medical indemnity system in this country, nothing would stop the steady rate of departure of doctors from the profession.

And nothing would stop our best and brightest students seeking careers other than medicine.

But we got the point across...very forcefully.

Building on action around the country, including here in Brisbane, the Sydney rally was a turning point in the medical indemnity crisis.

The strong messages sent to the Government that day made them sit up and finally take notice of the reality that high medical indemnity premiums were driving doctors out of practice...and robbing patients and communities of vital medical services.

It also made it clear to the Prime Minister and the Government that health will be the big issue at the next election.

He now has one of his most senior Ministers...and closest confidants...in the Health portfolio.

My dealings with Tony Abbott so far have been cordial and productive.

He is a straight shooter who is clearly in politics to make a mark.

To do that, you have to deliver results.  Health will give him that chance.

He's off to a flying start.

He quickly established a high-level medical indemnity review panel to look at the whole issue of medical indemnity.

The outcry over the IBNR levy helped bring the matter to a head.

I am meeting with the Minister weekly with other members of the Minister's Review Panel, including Dr Andrew Pesce, Chair of the AMA's medical indemnity taskforce.

Senator Helen Coonan, Dr Don Sheldon, Chairman of Council of Procedural Specialists, Nancy Milne, insurance lawyer with Clayton Utz, Dr Susan Page, President of the Rural Doctors' Association of NSW, and John Phillips, former Deputy Governor of the Reserve Bank of Australia are also on that Panel.

As I said earlier, the Minister wants an outcome acceptable to doctors by 10 December.  That is when the Panel must report to the Prime Minister.

A workable and affordable outcome will look good on the Minister's report card.

The AMA wants an acceptable outcome by then, too. If not, it is back to the drawing board.

Doctors would again be looking to change the nature of their practice, leave the private system, or retiring prematurely.

Young people would choose other professions and medical students will avoid entering into high-risk specialities.

A non-existent medical workforce by 2010 would be a possibility.

The already declining medical workforce should not be allowed to decline further.

The AMA has a website survey that asks what doctors will do if the indemnity situation is not fixed.

Of those who have responded:

• 85% say they have or will increase their fees
• 64% have or will cease procedures, 61% will retire earlier than otherwise
• 41% will move to the public sector
• 30% will case public hospital work
• 30% will close their practice and walk away
• 78% have or will cease to bulk bill.
• Some have indicated they will seek work overseas
• Another will do no more pensioner discounts and see no more paediatric patients.
• Others will cease no-gap agreements with health funds.

The medical workforce is a major political issue.  Yesterday's Medicare announcement is proof of that.

When Government backbenchers have difficulty getting to see their own GP, or their own GP ceases practicing because of the indemnity mess, they want something done.

That is why a lot of our lobbying and media activity is directed at the backbenchers in their own electorates.

They hate it when 'all politics is local', especially when the political outcomes are bad for them.

The Government has the will and the way to fix this now.

It is the AMA's task to make sure that any solutions to the indemnity and patient compensation crisis are sustainable, affordable and fair, and that they provide doctors with the security they need into the future.

This opportunity will be lost after the next election.

The Government wants a quick, effective political solution.  That is something that is in everybody's interest.

But an immediate political solution should not be inconsistent with the long-term sustainable solutions to patient compensation that are required in the interests of doctors, patients and the community as a whole.

The political solution must tie the Government into a commitment to work on the longer-term goal of a fair and affordable compensation model.

With that in mind, the AMA has put together an independent expert advisory group from various disciplines - people who have been 'living and thinking' medical indemnity for years - to come up with a strategic plan and options for a workable medical indemnity/compensation model.

At their first meeting, they emphasised the need for Treasury to be persuaded to make a paradigm shift in their thinking about the medical indemnity problem.

Treasury, however, sees doctors as no different from other professions - they all have to cope with rising insurance costs in a 'claims made' environment.

The AMA's expert advisory group pointed out that doctors, unlike lawyers and architects, require insurance cover for claims for damages for personal injuries, not for pure financial losses.

That is, the problem is not one of professional indemnity, but one of liability for personal injury - a long 'tail' business.

The problem has to be redefined to Treasury.

Solutions are needed as to how to secure insurance cover for the long tail business of personal injury claims.

To do that, it is relevant to look at the provision for cover for other personal injury claims, such as those arising out of motor vehicle accidents, or work place accidents.

Motor vehicle accident schemes provide claims incurred cover.

Workers compensation schemes provide claims incurred cover.

Long tail insurance claims require claims incurred cover.

That is what patients require and that is what doctors need because they can be sued years after the event when they may not be practising.

Workers compensation schemes and statutory accident schemes have no fault components.

They have an insurer of last resort (the state government).

They have market conduct regulation.

This is what Minister Abbott appreciates.  This is what Treasury needs to understand.

Doctors aren't different from other professions. The injuries their patients suffer are, however, different from that of other professions' clients.

Tony Abbott acknowledges that a 'claims incurred' type of cover is required.

If insurers and MDOs can't provide that, then schemes have to be devised that will.

The current tort system for very many reasons and in many respects does not provide a fair compensation scheme for injured patients.

The Government is putting a lot of money into indemnity now.  For example, it has agreed:

• to extend the high cost claims scheme to cover 50 per cent of claims between $500,000 and $20m
• to fully indemnify doctors for the component of any settlement above $20 million under its exceptional ('blue sky') claims scheme, and treat this on a 'claims incurred' basis
• to exempt doctors employed by public hospitals and all doctors over 65 years from the IBNR levy (without returning the burden of this to the members of UMP paying the levy).

These are some of the recent agreements the Government has made, and they are looking at other things it can do to keep doctors in practice.

The AMA has been active in getting the whole medical indemnity system reviewed.

The Abbott review panel has commissioned a great deal of work, and has met with the MDOs and other stakeholders.

The panel is asking for the medical profession to review its risk management processes in return for further government assistance.

This is a reasonable call...to an extent.

The AMA has pointed out that system errors and individual mistakes are more likely to be found, admitted and overcome in an environment where doctors are not at risk of being sued for openly disclosing mistakes or any contribution they may have made to a system error.

We also say that system errors, misdiagnosis, poor note taking and so forth arise from inadequate equipment, shortage of staff, pressure to see patients quickly.

These matters need to be addressed by public hospital systems, increased Medicare rebates, and can't be left to doctors to fix themselves.

Doctors are more likely to be sued by patients whether they are negligent or not, if the doctor/patient communication is poor, or the doctor could not spend enough time explaining why the patient had an adverse outcome.

Even negligent doctors escape being sued where their 'bedside manner' appeases the patient.

Doctors need adequate resources, system support, and time.

What we have to do is put the whole issue in the correct perspective. 

The truth is that clinical outcomes have nothing at all to do with a doctor's likelihood to be sued.

Medical indemnity has little to do with negligence, but more to do with a perceived lack of communication.

Statistics show that less than four per cent of hospital admissions lead to an adverse outcome.

Of these, only one in four are found to be due to negligence.  So, less than one per cent of adverse outcomes are due to negligence.

Then, we find that two out of three claims are from patients with no adverse outcomes or where there has been an outcome not due to negligence.

Where there has been genuine negligence, most doctors admit to it and move on.

The whole system today is characterised by excessively high premiums, fear and anxiety because of a very small number of cases of proved negligence.  The system is broken.

We became doctors to care for people.  We became doctors to deliver the best possible health outcome each and every time we see a patient.

That is why we are approaching the medical indemnity crisis on two fronts.

One, to ensure that we can afford to stay in practice and Australians continue to have access to affordable health care wherever they live and whatever their means.

Two, that we have a system that allows us to continue to deliver the best possible outcome to patients each and every time.

But I think we need to make more of the second point in our public advocacy.

Australia already has arguably the best health system in the world in terms of safety and quality and standards.

We need a medical indemnity system that reflects the many positives, not one that demonises our profession because of a few imperfections.

What we hear from the Government on 10 December will tell us how we are doing on that front.

Thank you.