The Guardian May 1, 2002

Health crisis. Public is best

by Andrew Jackson

"Potential catastrophe", said Australian Medical Association President 
Kerryn Phelps describing Monday's collapse of Australia's largest medical 
insurer, UMP. UMP is applying to the court for the appointment of a 
provisional liquidator next week. Pursuing its crazy "market forces" 
policies the Federal Government is looking for a way to pass the buck and 
impose extra costs on doctors and patients. Doctors may be forced to 
abandon bulk-billing as one consequence. Some doctors may shut down their 
practices if they are unable to find a new insurer.

"Essential health services are now at risk. Services will suffer, it will 
happen from today unless we get a very rapid and effective response from 
Federal Government", said Ms Phelps.

UMP provides medical indemnity insurance for over 32,000 doctors in 
Australia, including 90 per cent of those practising in NSW, and 100 per 
cent of those in rural and regional South Australia.

Ms Phelps' statement was backed up by New South Wales Health Minister Craig 
Knowles, who convened a meeting of Sydney's top neurosurgeons last Monday.

"Unless John Howard gives them some sort of ironclad guarantee about their 
insurance cover by the close of business today, they will be ceasing work 
in the private sector and will only be able to undertake emergency work in 
Sydney's public teaching hospitals", he said.

Doctors will continue to work in public hospitals because their medical 
indemnity is covered under each State Government's Treasury-managed funds 

Stephen Smith, Labor spokesperson for health said, "It's clear that in the 
aftermath of UMP going into provisional liquidation, the Government has no 
plan. 32,000 doctors are in crisis because they don't know that their 
insurance policy is worth the paper that it is written on".

Statements by Federal Assistant Treasurer Senator Helen Coonan indicate 
that the Federal Government has no real plan to meet the situation. She has 
made one statement after another which, on analysis, is little more than 
empty words that do not protect doctors or patients from future claims.

The Commonwealth Government has said it will work urgently with the 
provisional liquidator to prevent any disruption of medical services to the 
community. But what happens in the immediate future and what happens when 
present insurance policies come up for renewal around the end of June?

How are claims that may arise in the years ahead to be guaranteed? None of 
these questions have received a clear answer from the Federal Government.

On Tuesday morning this week, there were media reports of some doctors and 
dentists restricting which types of cases they would treat.

Although the Federal Government announced it would provide a $35 million 
guarantee to cover claims up to June 30 the medical profession remains 
highly sceptical and anxious about their position. (Ansett employees were 
also given "iron clad" guarantees which left many employees high and dry.)

The suggestion of a levy arose when Senator Coonan also said, "The 
government expects medical practitioners to play a prominent role in 
working through the current difficulties, which may include making a 
financial contribution as appropriate."It is likely that some doctors will 
pass on this additional cost should it be imposed, by putting up patient 

The Royal Australian College of General Practitioners made this clear in a 
statement which said they were "concerned that this will place an 
additional burden on practices which will eventually be borne by the 

Dr Tim Woodruff, President of the Doctors Reform Society, also confirmed 
this. He said: "Firstly, the decreased availability of some services like 
obstetrics, especially in rural and remote areas, will mean patients simply 
won't be treated", said Dr Woodruff

"Secondly, the increased premiums doctors have to pay across the board, 
will mean doctors will be looking to increase their charges. That will mean 
that doctors who currently bulk bill will feel increasing pressure to stop 
bulk billing."

"The government has watched bulk billing rates slowly decline since it came 
to office. It doesn't care. The result: further burdens patients as they 
struggle to be able to afford the many and increasing out-of-pocket 
expenses of basic medical care."

As the Federal Government refuses to increase the Medicare rebates paid for 
medical services, so the "gap" between what the patient coughs up at the 
doctor's surgery and the amount they get back from Medicare grows.

This will lead to more demands for private health insurers to cover the 
"gap", and many more patients turning to private insurance, which is what 
the Coalition has wanted since day one.

The Federal Government's lack of action on the issue can only be seen as 
part of its deliberate campaign to strangle Medicare to a slow and painful 

"Patients will suffer", said Dr Woodruff. "The Government will watch out of 
pocket expenses rise. And their aim of a two tiered health scheme in 
Australia where the rich can afford excellent health care and the rest must 
settle for second best, will move that little closer to reality."

In a statement to The Guardian, CPA General Secretary, Peter Symon 
said that the collapse of UMP, the sixth insurance company to go under in 
the last few years, shows again that capitalism is incapable of meeting the 
needs of the people, in this case, the health needs of the community.

"There is a stark comparison between the public health system which 
provides a universal service without feesand meets claims for doctor 
negligence and the private system so beloved of the Howard Government", Mr 
Symon said.

"The irresponsbile attitude of the Federal Government has been brought out 
dramatically in a statement just made by John Howard.

"He said: 'No we're not playing catch up at all, because we can't act in a 
way that forces the hand of a company when you've got potential claims of 
three or four of $500 million, you've got to be very careful, otherwise 
you'll be accused of meddling in the private business affairs of 

"There we have it", said Mr Symon. "Private companies are sacred and the 
health needs of the community are to be sacrificed to 'the private business 
affairs of companies'.

"Putting the blame on doctors, Peter Costello said: 'The doctors were 
responsible for setting their own premiums and meeting their own payouts 
and they've got themselves into financial trouble'.

"These statements clearly show the thinking and the callous, don't-care-a-
damn attitude of Government leaders", said Peter Symon.

"It is the private health system and, in particular, the private insurance 
companies that are failing and there is a desperate crisis that could bring 
calamity to many who require medical attention.

"The Government is already propping up the private health business system 
to the tune of billions of dollars a year, through the health insurance 
rebate and Medicare payments. The long-term solution does not lie in 
handing over more money to the private system to ensure it can function.

"Unless and until the provision of health services is re-established as a 
public service  as against profit-driven businesses  periodical crises 
will continue. The present competent public health system shows that public 
is best.

"The aim of the Government, however, is to destroy the public health system 
and hand the health of everyone over to the incompetent and hugely costly 
private profiteers, manipulators and speculators in community health", 
concluded Mr Symon.

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