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Wednesday, 26 March 2003
Page: 10249


Senator HUTCHINS (5:20 PM) —The purpose of the Medical Indemnity (Prudential Supervision and Product Standards) Bill 2003 and the Medical Indemnity (Prudential Supervision and Product Standards) (Consequential Amendments) Bill 2002, as outlined in the explanatory memorandum, is `to ensure that health care professionals have access to medical indemnity cover that is provided by properly regulated insurers'. The government's failure to deal with the medical indemnity insurance crisis must be viewed in the context of its failure in other areas of the health care system. This government has overseen a steady decrease in the rate of bulk-billing. Fewer than 70 per cent of visits to general practitioners now are bulk-billed, yet the Minister for Health and Ageing has hardly admitted that it is a problem. This same government has twice introduced legislation to increase the cost of essential medicines. This place has twice rejected those proposed increases. The bills before us represent a belated attempt to deal with a crisis that has been public knowledge for nearly a year. More than that, medical practitioners themselves have been concerned by the increased costs of medical indemnity insurance for well over two years.

The public first became aware of the medical indemnity insurance crisis in April 2002, when United Medical Protection sought provisional liquidation. Today, almost one year on, the government is still introducing legislation to attempt to resolve the issues surrounding the collapse of UMP and the resulting failure of insurers to protect doctors from financial ruin. But the writing was on the wall for a considerable time before that. In July 2000, which is now a year and a half ago, the President of the AMA, Dr Kerryn Phelps, highlighted the fact that medical indemnity insurance was blowing out as a concern for the health industry. In November 2000, United Medical Protection announced that in the 1999-2000 financial year over $95 million had been paid to 1,035 claimants. A day later, the AMA and individual doctors publicly voiced their concern that the expected, and later realised, `call' by UMP to increase fees would inhibit their ability to continue practising medicine. By mid-2001 Dr Phelps said that specialists were being driven out of practice by rising costs in medical indemnity insurance.

The Australian Labor Party realised that something needed to be done. That is why the then opposition leader, Kim Beazley, and Jenny Macklin, the member for Jagajaga, held a press conference on 31 July 2001 to announce Labor's policy to address medical indemnity insurance. But it was not until 19 December 2001 that the Prime Minister called for a summit on the matter, which finally convened on 23 April 2002. Before the summit began, the minister for health said that the government's role was only to bring the relevant groups together. Perhaps it is that attitude that sees us debating policy which attempts to address a crisis that still has not been resolved. In fact, the government introduced medical indemnity insurance legislation into the Senate for the first time on 19 November last year—seven months after UMP went under. The government's handling of this matter has been at best sporadic and at worst disorganised. During 2002 it became clear that the Prime Minister, the Treasurer, the Assistant Treasurer and the minister for health did not agree on the manner in which the crisis could be averted, nor on who was to take the blame.

The most concerning element of the medical indemnity insurance crisis has been its particular effect on doctors in the bush. For a long time there has been concern surrounding the number of doctors in rural and regional areas, and the increase in medical indemnity insurance costs has only served to make the matter more pressing. There have been significant flow-on effects from the medical indemnity insurance crisis. We have seen bulk-billing rates in Australia drop through the floor. Anecdotal evidence would suggest that there is a link between increased insurance costs and the now snowballing decline in bulk-billing. Many GPs, particularly in regional and rural areas, do not make buckets of money and, as in any business, increased costs are inevitably passed on to the consumer. But health care and medical advice, unlike many other services, are essential services that all Australians should have equal access to.

The government's inability to deal with the medical indemnity insurance crisis has made health care less accessible, has placed an extra burden on the hospital system and has made doctors' professional futures uncertain. In Bathurst, a town of 32,000 people, there is only one doctor who offers full bulk-billing services. People who used to be able to visit their doctor and simply present their Medicare card now have to make a copayment, which is on average $12.78 per visit. It is no great stretch to see a link between increased insurance costs for doctors and the decline in bulk-billing services. A New South Wales health department survey found that only 28 per cent of GPs on the Central Coast of New South Wales intend to offer full bulk-billing services in less than six months time. The equitable provision of health care services should not be taken lightly. But that is precisely what the coalition government has done, firstly, by denying responsibility for the medical indemnity insurance crisis; secondly, by failing to introduce appropriate legislation in time to prevent the crisis from affecting Australian families; and, thirdly, by failing to consult the relevant stakeholders in time to ensure that any legislation does not cause the problems that may occur in places like Tasmania and Queensland.

This government has an unforgivable record on health care services. In addition to letting the medical indemnity insurance crisis get out of hand, it failed to control the rapid decrease in bulk-billing services and it has twice attempted to increase the cost of essential medicines by 30 per cent. Labor and the minor parties have ensured that the PBS remains accessible by making sure the government's legislation has been blocked. But governments are elected to govern, and it is wholly the responsibility of the government to fix the bulk-billing and medical indemnity insurance crises. The Australian Labor Party will not oppose these bills. We believe that medical defence organisations have justifiable concerns regarding these bills and that the most effective way of dealing with those concerns would be to refer the bills to the relevant Senate committee. However, due to the government's inactivity on the matter, there is quite simply not enough time to apply the rigorous analysis these bills require.

The medical indemnity insurance crisis has been public knowledge for nearly a year now. Anyone who follows the medical indemnity insurance industry has known the potential for the system to break down for over eighteen months. But today, due to the government's ignorance of the issue, the Senate is compelled to pass legislation which may not address the issues effectively. At the eleventh hour, the government has listened to the concerns of doctors on the matter of run-off cover and has decided to provide them with at least an element of what they need to go about their business without worrying about claims in their retirement.

These bills are long overdue. They may not be ideal and they may not be the result of open and effective consultation with the relevant stakeholders, but we need legislation to ensure that we do not see a repeat of the United Medical Protection collapse. I support the bills but condemn the actions of the government in failing to appropriately deal with the crisis. Australians rely on this government to legislate for unexpected eventualities. In this case, they have failed to do so and the Australian health care system has suffered the consequences.