Doctors' insurance bailout is a cop-out
by Anna Pha Media reports last week claimed that some hospitals had cancelled up to half of their scheduled operations. This was not the public hospital system, it was not due to a shortage of beds or staff. It was the private hospital system facing an unprecedented crisis as medical practitioners withdrew their services in fear of going bankrupt without adequate indemnity protection. Approximately 32,000 medical practitioners have indemnity coverage with United Medical Protection (UMP). Last Friday, May 3, a provisional liquidator was appointed to UMP. While the government is still hoping that UMP can be saved, the doctors are not so confident about its future or how they will receive protection from common law actions. Many doctors did continue working, relying on a verbal promise from the government to give them cover against incidents between April 29 until June 30. What happens after June 30 is still unknown. The collapse of UMP is said to be due to a depletion of capital reserves at a time when the insurance sector is facing increased demands. There are a number of other specialised mutual funds providing doctors with medical indemnity cover but these apparently feel inadequately capitalised to be able to step in and take over UMP's customers. The commercial insurers such as Axa and the Insurance Australia Group (formerly NRMA Insurance) are sitting on the sidelines demanding "reforms" before being willing to step into this area of insurance. They are demanding legislation to severely restrict the common law rights of victims of medical malpractice and negligence. They would like to restrict who can make claims, what they can claim for and how much they can claim. They want to make sure that medical indemnity insurance becomes highly profitable with little risk to their profits. The government can be expected to accede to their demands and respond with legislation. Since UMP's collapse, other insurers covering the medical profession have hiked up their premiums, in some cases by as much as 65 per cent. Obstetricians and neurosurgeons, in particular, are facing massive insurance bills in the six-figure range. The changes being demanded by the commercial insurance sector are similar to those the industry is demanding in other areas of insurance. Already we have seen the introduction of caps or ceilings on payouts to victims of accidents in a workplace. Governments have reduced access to common law for workers' compensation and also reduced payments for various categories of injury. The aim is to reduce the cost of insurance premiums for employers and to shore up the profits of the insurance sector. In the medical sphere the insurance sector is deliberately holding back and blackmailing the community and the government to bring about the changes it is demanding. The media are coming to their aid, playing up the crisis and the threat of the withdrawal of services of GPs as well as surgeons and other specialists. They conveniently omit to mention that it is the private health system which is in crisis. Services are continuing as normal in the public health system where doctors have coverage through state funds and do not need to pay for their own private indemnity cover. The present crisis is an indictment of the private health system. It is typical that at a time of crisis the private sector turns to the public purse for a bailout of hundreds of millions of dollars. It is yet another example that shows how much more efficient and reliable the public sector is. The private insurance sector is one of the most parasitic of all sectors of the economy. There are far better ways of dealing with incompetence, common negligence or malpractice by medical practitioners than huge payouts to victims through a private insurance system. Patients are in the long run paying a high price for that insurance through higher fees and also a hidden price in that the incompetence, negligence or malpractice of a doctor often goes unchallenged because of exorbitant legal fees. It would be far better to have a system where the performance of doctors is guaranteed by other means, such as retraining or even deregistration where necessary. A public health system not only offers full protection for the medical profession but it also offers more reliable services to the people. Treatment, rehabilitation and assistance to families should be a right provided by a government taking responsibility for its people. The health and well-being of people should not hinge on the bottom line of an insurance company. It should not be a source of yet another layer of profit for the private sector.