Fears of a return to the medical indemnity dark days


Proposed changes to the medical indemnity system could have a devastating impact on doctors and even push some out of practice, the AMA claims.

Since 2003, the federal government has subsidised doctors’ indemnity insurance premiums and financial assistance to medical defence organisations and practitioners for high-cost claims through its Indemnity Insurance Fund.

The system was put in place to stabilise the sector following the collapse of HIH Insurance and United Medical Insurance which drove up the cost of premiums, in some cases with dramatic consequences.

In December last year the government announced it would review of the system and also flagged plans to raise the threshold at which its contribution to high cost claims kicks in from $300,000 to $500,000 from July 1 2018, to save $36 million over two years, the AMA said at the time.

These moves were condemned by AMA president Dr Michael Gannon, who questioned why the government would take aim at a successful policy that had worked well for 15 years.

“A secure, steady medical indemnity sector is essential to our ability to practise, and to maintain our focus where it should be – on our patients,” Dr Gannon said.

“At the height of the indemnity crisis, many practitioners faced uncertainty about the future of their practice, and blowouts in the cost of insurance premiums that would have made their practice unviable.

“In extreme cases, some practitioners were paying more than one-third of their incomes in insurance premiums, and others left the profession or left high-risk areas like obstetrics.

Dr Gannon pointed to the UK where two of three major providers have exited the obstetrics sector, and the United States where certain high risk areas of medical practice have been deemed ‘uninsurable’.

“The IIF schemes are a public policy success. They do so much more than subsidise premiums – they provide stability and a safety net for private medical practice, which has been buffeted by the freeze on Medicare rebates, changes to private health insurance, funding constraints, and patchwork reform.”

Submissions to the review closed on October 13.

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