Government decision puts sunshine into medical indemnity's 'blue sky'
AMA President, Dr Kerryn Phelps, said today that the Federal Government's decisive action on medical indemnity should end fears of mass doctor retirements on 1 July.
Dr Phelps said the Government has stepped in to eliminate doctor fears over future 'blue sky' indemnity claims - claims for amounts well in excess of the doctor's insurance, which could have led to doctors being personally liable for millions of dollars.
The Government has also provided guarantees it will provide options for affordable retirement cover for doctors after 1 July 2003. Medical Defence Organisations (MDOs) are offering affordable retirement cover for the period 1 July 2003 to 1 July 2004 while the Government initiatives are bedded down.
"The Government has today delivered on its end of the bargain to help resolve Australia's long-running medical indemnity crisis," Dr Phelps said.
"It is now up to the States and Territories and MDOs to fill in the gaps by implementing tort law reform and putting downward pressure on indemnity premiums.
"Only then will it be safe to say the crisis is over."
Dr Phelps said the Federal Government will pay any settlements or awards that exceed the insurance cap - the 'blue sky' amount. This will apply to medical indemnity insurance contracts from 1 January 2003.
This means that if a claim is made today, but not settled for ten years, the Government will pay any settlement amount above today's cap of, say, $15 million.
To ensure that MDOs have every incentive not to exceed the cap, the Government will levy the individual doctor's MDO to recover the cost.
It is expected that 'blue sky' settlements will be very rare, particularly if the States proceed quickly with tort law reform and a long-term care and rehabilitation scheme for the severely injured is established.
The Government's scheme will run for three years initially, and will be reviewed in light of progress on tort law reform at that time.
"Today's announcement by the Government should provide most doctors, especially high-risk specialists, with the confidence and security to stay in practice," Dr Phelps said.
"Doctors who were considering early retirement in a matter of weeks should now be safe in the knowledge they will not have to carry a substantial premium burden into retirement. They, too, will be more confident to stay on working for a few more years at least.
"The AMA congratulates the Government on making the right decision. A small step has averted a potential big disaster.
"We will now turn our attention to securing consistent national tort law reform, particularly with regard to Statutes of Limitations.
"Another priority is getting the Government to work towards a care and rehabilitation scheme for the severely injured.
"These extra steps are needed to ensure medical indemnity remains affordable and quality medical services remain accessible to all Australians well into the future.
"Today's decision is another great step to a long-term solution that will take the crisis out of medical indemnity," Dr Phelps said.
CONTACT: John Flannery (02) 6270 5477 / (0419) 494 761
Judith Tokley (02) 6270 5471 / (0408) 824 306