Doorstop - Dr Kerryn Phelps, AMA President - Comments on the Federal Government's latest initiatives on medical indemnity


PHELPS: I'd like to express the relief of the medical profession in Australia for the announcement made by Senator Coonan and the Prime Minister, John Howard, today about the final pieces of the jigsaw puzzle with relation to medical indemnity.

The concerns about blue sky and the concerns about the retirement plans for doctors were leading many doctors in Australia to consider retirement on or about 1 July this year. We believe that these changes that have been announced and the intentions of the Commonwealth Government with regard to blue sky and retirement will keep doctors working with confidence and with security without the fear of losing all of their hard-earned savings.

QUESTION: What about this proposal that there be like a retirement coverage, about a $300 a year fee that doctors will have to pay? Is that fair, do you think?

PHELPS: It's extremely important that retirement cover is affordable for doctors who are no longer earning an income and the medical profession who are working within the medical workforce are happy to pay extra to insure security for all doctors after they've retired, become disabled or after they've died.

QUESTION: Do you think doctors are now more secure than they have been for several years?

PHELPS: There's no question that this announcement provides the security that doctors have been looking for. Doctors were concerned that individuals might be hit with massive awards in several years' time, up to 20 years or more, with the capped insurance products. They can now, I believe, with some confidence continue to work knowing that no individual will be hit with an award like that, that would literally financially wipe them out, and we think that that's a very good move. Obviously, according to the announcement, this would ultimately be funded by the medical profession and have to be passed on to patients but it would also give patients the security that they still have access to compensation in the event of a negligence action.

The retirement issue is also extremely important. If doctors were unable to afford to retire it would have made it just an impossible and untenable situation and that's why many were considering retiring before the new legislation came into place on 1 July.

QUESTION: So the problem is solved, effectively, given this package, is it not?

PHELPS: I think we can say this is a giant leap forward and that the Commonwealth Government has done all it can do with its legislation to stabilise the industry and to create security for the medical profession and for patients. What we need to see now though are the final pieces of the jigsaw puzzle.

Firstly we need to see comprehensive, national tort law reform which is in the hands of the states and territories and we need to see the establishment of a long term care and rehabilitation scheme so that people who are injured can access the care that they need when they need it and not have to go through the adversarial legal system to get any form of financial compensation.

QUESTION: Are there any states that are dragging the chain in not bringing in this tort reform?

PHELPS: I was delighted to see that Victoria announced their tort law reforms this week. We still have a lot of work to do around the states to ensure that there is some harmonisation from state to state but certainly the important thing is that we get statute of limitations legislation in place so that we don't have claims continuing for over 20 years.

QUESTION: Is the New South Wales Government leading the tort law reform story?

PHELPS: There's no question that the New South Wales Government has led the tort law reform issue. The crisis first hit in New South Wales and Carr's Government responded very quickly to put in place tort law reforms and certainly have led the way.

Other states are following, some more quickly than others, and we'd certainly like to see those state tort law reforms in place as soon as possible because otherwise we could still be faced with a crisis down the track. But I believe that the announcements today are going to be very well received by the medical profession. I think that the emotion is probably one of relief that doctors can continue to care for their patients.

QUESTION: What about medical insurers? Have you got any information that they are happy with the package and will come back into the system?

PHELPS: Medical indemnity organisations have remained in the system. What we are hoping is that these announcements and tort law reforms will bring a downward pressure on medical indemnity premiums and if we do get those lowered premiums then that's good news for patients too because it means that doctors won't have to pass on these exorbitant premiums to their patients.


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