Doctors Get Federal Insurance
The Age
Saturday May 24, 2003
Canberra
Doctors will be protected from excessive negligence claims and soaring insurance premiums after they retire, under a Federal Government plan to solve a looming medical indemnity crisis.
Responding to warnings that doctors will retire en masse within weeks to beat July 1 changes, Prime Minister John Howard yesterday announced that the Government would cover any claim amounts exceeding a doctor's insurance cover - the so-called ``blue sky component".
Doctors will also be offered cheap insurance after they retire to protect them from claims with a long shelf-life.
``These extensions to the Government's comprehensive medical indemnity package will allow medical practitioners to continue to practise with increased certainty about their medical indemnity insurance cover," Mr Howard said.
New rules starting on July 1 will require medical insurance companies to cap the amount of cover offered to doctors, sparking widespread concern among high-risk specialists that they could be liable for millions of dollars.
Doctors were also worried that they would be forced to pay insurance premiums of up to $100,000 a year after retirement after the July 1 changes.
Australian Medical Association president Kerryn Phelps said that the Prime Minister's announcement had eliminated the threat of mass retirement.
``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," Dr Phelps said. ``They . . . will be more confident to stay on working for a few more years at least."
She said the Government had delivered on its end of the bargain to help solve Australia's long-running medical indemnity problems. ``It is now up to the states and territories and MDOs (medical defence organisations) 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," she said.
Revenue Minister Helen Coonan said the ``blue-sky" payments would be funded by a levy on insurance companies, involving no cost to taxpayers.
She said payouts exceeding the cap would be rare at any rate because doctors would be covered for claims of up to $20 million and legal reforms introduced by the states would limit scope for big claims.
``The highest ever award for damages in Australia was made in New South Wales for less than $15 million," Senator Coonan said. ``Recent reforms to the law of negligence . . . will have the effect of placing downward pressure on compensation payouts."
Under new laws put forward by the Bracks Government this week, medical experts must deem that a person has suffered permanent impairment of at least 6 per cent because of a physical injury, and at least 11 per cent for psychiatric problems, before a person can sue for pain and suffering.
Mr Howard said the Government would review the ``blue-sky" scheme after three years to see if it remained necessary following state legal reforms.
© 2003 The Age
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