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Dr Kerryn Phelps, AMA President - Medical indemnity summit

PHELPS: The Prime Minister's announcement of a summit to look at solutions to the national medical indemnity crisis is fantastic news. The medical profession has been saying for quite some time that the situation is very serious and is resulting in the loss of services, not only from rural centres, but also from city public hospitals. And we need to see a coordinated national solution so that patients maintain their rights, but so that patients also have access to services and doctors are able to afford to continue to work.

QUESTION: Why is the summit a good idea?

PHELPS: I think it's important to note that New South Wales has been the only state where public hospital work has not been covered for doctors and this is why the situation's reached such crisis point in New South Wales first. However, because of the global insurance problems and the local insurance problems the situation will spill over to the other states before too much longer. So I guess we reached a head in New South Wales first. It will happen in the other states. What we want to see come out of this summit is justice for patients, justice for doctors, and a system that can continue to work without the madness that we've seen in medical indemnity in the past few years.

QUESTION: What is the average policy for a GP at the moment?

PHELPS: For a GP the policies are around $4,000 - that's quite a massive increase over previous times because GPs are now subsidising the higher risk specialties. But if you're looking for obstetrics, for example, their premiums are now in excess of $100,000. Similarly, neuro-surgeons and specialists in those particular fields are saying they just simply can't afford to continue to provide services when they have to pay those sorts of premiums just to open their doors.

QUESTION: What kind of role will risk management procedures play in this?

PHELPS: Risk management procedures are already in place in our public hospitals, but I think that provided the colleges are the arbiters of standards and have the running on the particular risk management processes, I think that that will be well and truly accepted by the medical profession.

QUESTION: And what can be done to slide slightly the time limitations fuelling all these claims in the first place? Should doctors be more willing to admit mistakes?

PHELPS: Well, for legal reasons, doctors have been advised not to admit mistakes and to apologise to patients and I think that this has really created a culture of shame and blame and a very litigious climate and I think what we do need to do is to really look at the whole system and the summit will be, I think, a valuable method here to look at the whole system…

The current system has created a shame and blame culture and what we do need to do is to really look from the ground up at how the system works, where the problems are and to make sure we have a workable system that can take us into the rest of this century.

QUESTION: Does the AMA want the Government to fully subsidise the legal claims?

PHELPS: When you look at the fact that medical fees must go up to pay for these medical indemnity costs, because they're a legitimate practice cost, you have the choice of either the sickest patients paying, who are the people who are most using the health system, or you have the taxpayers sharing the burden across the community. So if you really look at it in terms of social justice, I think we need to find a method that looks after people who are catastrophically injured, but also where the burden is shared, not just by the sickest.

QUESTION: Do you believe that if the Government picks up the tab that doctors will have a different census to be in practice and not make mistakes?

PHELPS: Doctors' harshest critics are themselves and I think that the important point to note is that doctors really strive for excellence. They don't like anything less than 100 per cent results, but medicine is such that you won't always get a 100 per cent result. But the more that we can improve on quality and put in place safeguards, so that avoidable accidents don't happen, then that will be always very much acceptable to the medical profession.

QUESTION: Is this going to result in an increased tax, a reduction in health spending or patients having to pay more? Will doctors be doing their bit in terms of covering the cost because ultimately they have a major role to play?

PHELPS: The point is that medical indemnity insurance is a practice cost. At the end of the day, like any other insurance cost for any other business, it has to be passed onto the consumer or in this case the patient. So the question is, do we charge more just for the sickest people or do the taxpayers share the burden across the board? And I think that really the answer is going to come out of this summit that we need to find a way that makes the system more efficient and accessible because, at the moment, if you have a look at it, the cost - if you have a look at the awards to patients - two thirds of awards to patients go in legal costs and administration, which means that only a third of those awards or the doctors premiums are going to actually compensate patients who are injured and to look after their ongoing care costs.

QUESTION: So the lawyers are the problem?

PHELPS: There's no question that the legal system, as it currently works, favours litigation and favours an adversarial approach and if we can get away from that adversarial approach, make the system more efficient and more socially just, then I think that everybody will win. At the moment there are no winners, only losers.

QUESTION: What will you be putting on the table at this forum early next year?

PHELPS: We will be looking at a range of issues. We already have put into place tort law reform in New South Wales. We want to see the other state governments come on board with tort law reform. We want to see the structured settlements issue which was announced by the Federal Government put into place. These are the bits and pieces. What we need is an overall framework of a national approach so that this problem doesn't get out of hand again in another decade. We need to see a more sensible approach to the handling of medical complaints and we need to look at some system that will ensure that people who are catastrophically injured get the care that they need without having to go through an adversarial legal process.

QUESTION: To what extent do you welcome the Prime Minister's announcement today?

PHELPS: We think that the Prime Minister's announcement today is fantastic. To take national leadership on an issue of such urgency is a very important step and we look forward to being closely involved in the summit.

QUESTION: A lot of the strife that has occurred recently in New South Wales. The New South Wales Government has made some reforms on medical indemnity. Is New South Wales current best practice or do we need to move on from what's in place in New South Wales for the other states and territories?

PHELPS: What can be achieved out of this summit? The Federal Government and the State Governments all sitting down together and having a look at these reforms, seeing how effective they are and looking at a national approach, so we're not having a piecemeal state-by-state approach, that we're looking at the overall picture for the whole nation and making sure that the system works for everyone? Because, after all, we do have a national system of health insurance called Medicare and part of the cost of providing that system is looking at how we handle people who are injured in the process of being treated.

QUESTION: But has New South Wales been the most progressive state?

PHELPS: New South Wales has led the way in terms of tort law reform and I would certainly like to see the other state Health Ministers looking at the reforms in New South Wales and applying them in their states.

QUESTION: Does it need to go even further?

PHELPS: It needs to go further. We must have a national approach to medical indemnity. We can't have a bit by bit approach with one state government doing one thing, another state government doing another and nobody knowing where they stand. We have doctors who work across state borders, they need to have some consistency as well.

QUESTION: To what extent are the doctors going to come on board because the behaviour and the attitudes and the handling of accidents in hospitals is going to come under the spotlight? Where do you think you've got room to move on this? What will you be offering the government in return?

PHELPS: I think the important thing is that everybody works together to solve this problem. Part of that will be reviewing the risk management processes and doctors will welcome the chance to be able to - in any way possible - improve the quality of care provided in hospitals. Remembering, of course, it's not always a mistake by a doctor that causes a medical accident, it could be a problem with the system, it could be mis-communication, it might be technology or equipment that fails. It might be other medical or nursing staff where there's a problem either in communication or in the way that the system itself works. And so, if we can work together to find solutions to those problems within the system, to make sure that fewer accidents happen then once again everyone wins.

QUESTION: If the AMA could entirely have its way, what would it propose? What would be the magic solution for this whole problem?

PHELPS: Well, we need to see the medical indemnity cost for doctors working in public hospitals to be picked up by government, I think that that's an essential. I'm hoping to hear an announcement along those lines in the next 24-hours from the New South Wales Government. We are also looking to make sure that the people who are catastrophically injured, because of medical accidents, are looked after. At the moment people with catastrophic injuries have to go through a very lengthy and expensive and inefficient legal process to get any compensation for their ongoing care. Now, that leaves a great number of people without the care that they need. So we want a system that is socially just, that is efficient, that is less expensive than it is now and which ensures the ongoing provision of health services.

QUESTION: Are there any countries which have models such as that which you're referring to?

PHELPS: Australia has the opportunity to put in place a model that can be an example for the rest of the world and we have that opportunity now before us, and with taking a national approach and having the cooperation of the State Governments, the medical profession, the legal profession, and consumer groups, I think we have the chance to be an example for the rest of the world.

QUESTION: Will doctors also be looking at the management of their scheme for medical indemnifiers and the way they've managed their funds as well?

PHELPS: I think it's time to put all the cards on the table. One of those cards will be to look at the way that medical indemnity has been operating in Australia and to see where that can also be improved.

QUESTION: What are your concerns at the moment about the way they've been managed?

PHELPS: Well, I think that that's for another time and place, but the summit should definitely look at the problems that have resulted in calls, many of these have been created by the system itself. But I think we need to have a look at, for example, the prudential requirements of the medical indemnity funds and make sure that they meet certain requirements.

Ends

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