Dr Kerryn Phelps, AMA President, for Network Ten

QUESTION: What needs to be done?

PHELPS: We need to have state by state changes to legislation governing medical indemnity cases in the courts. We need to have national leadership from the Federal Government, so that the situation is made stable and that we have long-term future planning to make sure that the industry is sustainable.

QUESTION: Are you looking for government funding them?

PHELPS: There may well need to be a need for government funding. Certainly, Medicare has a responsibility to incorporate medical indemnity costs as part of the costs of providing services to patients. We need to also reform the laws governing medical negligence cases so that they are more efficient, less expensive, and more just for patients.

QUESTION: In the event that they do fold, where would that leave the 60 per cent of Australian doctors who are members?

PHELPS: If we see the collapse of any of the medical indemnity insurers it is going to be a disaster for the provision of patient care. We will see the loss of services. For example, in New South Wales, if a doctor is not insured, they cannot practise, and so we will immediately see the doctors, right across New South Wales and in many parts of Queensland, unable to provide services to patients. But, in the interim, with the costs escalating as they are, we're seeing services being lost to patients, to communities. We're also seeing that the costs are having to be passed onto patients, so medical care becomes more expensive.

QUESTION: So patients will be the big losers?

PHELPS: Patients will be the big losers. Not only will they have to pay more in their medical fees but they may not have services to even be able to pay for, because the doctors are no longer able to work in those fields because of the costs of medical indemnity insurance.

QUESTION: The New South Wales Health Minister is calling for the Federal Government to do more. Do you agree with that?

PHELPS: There's no question that every state has a part to play in terms of law reform and looking at the way the court system handles medical negligence cases. But, there is no question that the Commonwealth must act, and they must act now, because we have a disaster facing us.

QUESTION: What can we do to avert the disaster?

PHELPS: In order to avert the disaster, we must have the Commonwealth agreeing to underwrite any potential shortfall that the medical indemnity insurers might have in meeting their prudential requirements. We also need to see fundamental structural reform to the laws, and the way that the justice system handles these cases so that people who need care can get care, and that we don't have two-thirds of the doctors' medical indemnity premiums going to lawyers and administration.

QUESTION: The cost of all insurance is going up. What's your current experience with medical indemnity?

PHELPS: The cost of medical indemnity insurance has escalated exponentially, in the last four to five years. This is creating tremendous strains on a number of higher risk specialties, like obstetrics, neurosurgery, orthopaedics, and it's these services which will suffer first. But it will spread across the whole industry and throughout the whole health system.

Ends