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Tuesday, 25 November 2003
Page: 22752


Mr MURPHY (5:15 PM) —I rise this evening to support the Medical Indemnity (IBNR Indemnity) Contribution Amendment Bill 2003 and the Medical Indemnity Amendment Bill 2003. But I make the point at the outset that the threatened walkout of the doctors and the crisis negotiations with the AMA that followed have led the government to agree to a moratorium on the IBNR levy payments, an exceptional claims scheme and the creation of the Medical Indemnity Policy Review Panel to be chaired by the Minister for Health and Ageing. I understand that that panel will be reporting to the Prime Minister on 10 December, and it is expected that it will consult widely and look at what is financially sustainable and what is affordable to enable Australia's medical work force to provide care and continue to practise to its full potential and safeguard the interests of consumers and the community. We await the outcome of Mr Abbott's report with great interest, because this is a very serious matter.

I want to raise the fact that I was able to obtain a copy of the draft Bills Digest from the Department of the Parliamentary Library only this afternoon. Once again, this is not good enough. It is not the first time that I have spoken about being in this situation, because I did speak last month on the Migration Legislation Amendment (Migration Agents Integrity Measures) Bill 2003. Members will doubtlessly recall what I said on that occasion, so I will not go over it again. In the interest of not frustrating the democratic process, it is really unacceptable that all members of this House are not given a proper brief through the Bills Digest, which is the lifeblood of members' understanding of the complexities of the legislation that comes before the House on a day-to-day basis. The government is starting to become a serial offender in this regard, and I point to its failure on this occasion, with such an important piece of legislation, to properly brief all of us so that we can have a proper debate in the best interests of the nation. Although we have a moratorium in place at the moment there is bipartisan support for this bill because it is critical for our health system.

The draft Bills Digest that I saw only a few hours ago in my opinion refers correctly to the present medical indemnity insurance situation as a `crisis', for that is exactly what it is. In my view, the government is doing all it can to deny and obfuscate a growing list of appalling abuses and neglect of government responsibility in this area. It is all right for the government to be obsessed with foreign policy and to be grandstanding on that but, at the same time, we are witnessing Australia's most basic services falling to pieces because the government is in a state of denial, particularly in the critical portfolio of health. I point specifically to Medicare, and I notice that the previous speaker, the member for Cook—for whom I have a great deal of regard—was speaking rather positively about what the government is doing to preserve Medicare and bulk-billing. As you know, Mr Deputy Speaker Jenkins, from the wide-ranging debates and questions here in question time over the past few months, it is quite plain that the government is not really interested in preserving bulk-billing. We also have this other crisis, which is the subject of these bills we are dealing with tonight and which I want to focus on. As to the reason for this present crisis, the draft Bills Digest notes:

Historically, MDO's—

that is, medical defence organisations such as United Medical Protection/UMP, Australian Medical Insurance Limited/AMIL—

provided their members with `claims incurred' cover. Under a `claims incurred' policy, doctors were insured against injuries to patients brought about through conduct which took place during the term of the policy. The patient's claim could be notified to the MDO at any time; ie during the term of the policy or once the policy has lapsed (for example, five years after the policy has lapsed).

The upshot of this is that there is what is known as a tail of non-incurred claims that have a six-year window in which to be filed from the date of the incident medical procedure. UMP/AMIL accounted for some 60 per cent of indemnities for medical practitioners until they fell into provisional liquidation, hence the crisis. Mr Deputy Speaker, like HIH, Qantas, Ansett, OneTel and other spectacular corporate collapses, who do you think is the lender of last resort for this sort of flagrant and incompetent management? Who does the government propose should fix the problem? That is a rhetorical question. It is the taxpayer. As the Bills Digest notes, yet again, it is the public who must act as a:

... guarantor for claims arising out of medical procedures provided by doctors covered by UMP/AMIL.

The government decides in these bills that it is the taxpayer who is to pay for and indemnify UMP for their incurred but not reported claims.

In this debate we must ask serious questions as to how this situation came about. How is it that there could be such a flagrant abrogation of responsibility? How could the government permit such flawed medical indemnity policies to be drafted in such generous terms so as to permit claimants to claim for up to five years after the date of the purported flawed medical procedure? Why is it that we are only now coming to a mop-up operation with the crisis, and then only after the crisis has occurred?

For those in this House and the general public who do not understand the practical application of the medical indemnity crisis, I would like to read some correspondence that I have received. I would like to start with a letter dated 1 October 2003 from one of my constituents, a paediatric orthopaedic specialist surgeon practising at the Sydney Children's Hospital. That letter is addressed to the Minister for Health and Ageing, and a copy of the letter has been sent to me by the specialist. When I last spoke some weeks ago with this specialist he had not had a response from the minister. Well, I hope he has had one by now. But, in any case, if he has not, I would like that followed up, because the least the minister can do is reply to this specialist. He writes:

Dear Mr Abbott,

I am a paediatric orthopaedic surgeon at Sydney Children's Hospital, Randwick. As a direct result of the Federal Government IBNR tax, five of my colleagues are resigning from the hospital. This will leave me as the only remaining orthopaedic surgeon. Plainly, it will be impossible to provide adequate emergency cover for children with conditions such as life and limb threatening bone and joint infections, serious trauma and fractures. Further to this, I expect that essentially all elective orthopaedic surgery will be cancelled. Outpatient clinics will also have to be closed to new patients.

I understand that, at the Children's Hospital, Westmead, at least three of the five orthopaedic surgeons there have also tendered their resignations. In total, this equates to the loss of over 70% of the specialists in this discipline. The impact that this will have on the provision of services is profound.

The orthopaedic departments at both hospitals provide tertiary referral services to the State and beyond for a wide range of conditions. These include multiple and complex trauma, bone tumours, scoliosis and other spinal pathologies, various birth defects, congenital dislocation of the hip, cerebral palsy, spina bifida, limb deficiencies and many others. World class research and the education of medical students, junior doctors and surgeons in training are also carried out and most of this is unpaid. Those who work in this field do so for the technical challenges and the satisfaction and enjoyment that comes from treating children. Assuredly, it is not done for the money. It is certainly the least well recompensed area of orthopaedics. Indeed, there are no full time paediatric orthopaedic surgeons in private practice. All must subsidise their public paediatric practice by doing private adult orthopaedics.

With the exponential rise of medical indemnity costs, it has become increasingly difficult to sustain a viable paediatric practice. Included in this is the sting of a potential 21-year tail that paediatric patients may have before commencing legal action for medical negligence. The IBNR tax has been the final, and financially unsupportable, burden. My colleagues, one of whom has been in practice for over 30 years, feel that the only option is to leave children's orthopaedics and pursue other areas; in order to pay for the UMP call, the levy and the inevitably increasing costs of practicing medicine and also to minimise exposure to the greater legal perils of paediatrics.

If this situation is allowed to mature, then the nation will have lost an irreplaceable resource. There are few surgeons who work in this specialty, and given the current environment, no incentive for others to entertain a future in it. The collective experience, wisdom and until recently, goodwill of those who reluctantly leave, cannot be let slip. I urge you to work towards a solution.

That is just one of my constituents. I am happy to make a copy of that available, because I think the minister should reply to this specialist. I will not name the specialist.

Another one wrote a brief letter on 1 October 2003 to the Chief Executive Officer of the Western Sydney Area Health Service, not to the minister, but a copy was sent to me and a copy was sent to the minister. The letter reads:

I am hereby giving notice that as of midnight 31 October 2003, I will be cancelling my insurance cover with United Medical Protection. As a result of this, I will no longer be registered as a medical practitioner and will cease clinical practice for all public and private patients.

It is with much regret that I have made this decision. The attitude of the Federal Government to the ongoing indemnity crisis lacks insight into the needs of patients and the requirements of medical practice. In the current climate, the clinical care of patients is untenable.

Unless there are major reforms to the indemnity problem, I simply cannot continue to provide the services that I have been trained to perform for the community.

And another doctor in my electorate sent an email on 13 November 2003 of which a drop copy was sent to me. It reads:

Mr Abbott,

I am one of the doctors who paid the IBNR levy before you decided to withdraw the notices.

It is now over two months since I paid (4/9/03) and nearly a month since you sent me a letter saying we would be refunded.

Phone calls today to the number in your letter and to the HIC both produce the same response. They have no idea when this is going to occur.

I am paying interest on a loan that I would not otherwise have to be because of the levy and I would like it back sooner rather than later if you don't mind.

Can you please give me some indication when this will occur.


Mr Sidebottom —And?


Mr MURPHY —I am not aware, member for Braddon, that there has been a response to that one either. As I said, these are the practical applications of the medical indemnity crisis, hence the importance of the outcome of Mr Abbott's medical indemnity policy review panel in allaying the concerns of these specialists.



Mr MURPHY —I am not going to wind up, member for Herbert. You are a friend of mine.


Mr Hardgrave —The member for paradise.


Mr MURPHY —Yes, the member for paradise, as the minister says. I would like to take the opportunity to again bring to the attention of the House the basic principle of environmental management that I have spoken about in this House before, known as the precautionary principle, because it is relevant.


Mr Sidebottom —What about media ownership? I would prefer to hear about that.


Mr MURPHY —I know the member for Braddon would like me to speak about the Broadcasting Services Amendment (Media Ownership) Bill 2002 [No. 2]. I hope to make a contribution to democracy at the end of the week, if that bill comes back into the House, because I realise that it is a very important bill for the future of our democracy. We will get to that, member for Braddon, and no doubt I will make an invaluable and lasting contribution to the debate when that bill comes back.


Mr Sidebottom —You will.


The DEPUTY SPEAKER (Ms Gambaro)—I have to remind the member for Braddon that we are here for the medical indemnity bills. I ask the member for Lowe to come back to those bills.


Mr MURPHY —I am happy to come back to them. I want to say something about the precautionary principle in environmental law that I have spoken about previously, because it has application here. The principle is cited at section 6(2)(a) of the New South Wales Protection of the Environment Administration Act 1991, which states:

... if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by:

(i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and

(ii) an assessment of the risk-weighted consequences of various options ...

With medicine, as with other social, ecological and environmental concerns, policy must be directed towards prevention of harm rather than cure. It is always preferable to prevent harm or illness rather than to treat an ever increasing level of harm only after that harm has occurred. In this case, I support the shadow minister for health and member for Lalor, Julia Gillard, in condemning the government for doing too little on medical indemnity until it was too late. How often has this happened with this government? The medical indemnity blow-out was not something that could not be predicted. Actuaries and other experts should have predicted the medical indemnity cover necessary for claims. It is simply the case that this government allowed the situation to reach crisis point then collapse.

The precautionary principle compels action where there is non-negligible foreseeable harm. That is exactly the way in which we describe the situation with the medical indemnity crisis. This situation could have been avoided. Now doctors and other medical practitioners are burdened with a levy. That has resulted in potential mass walkouts by medical practitioners, who simply refuse to pay and refuse to be exposed to medical claims without the security of knowing whether they will be covered. This is the reason, I suspect, why the government is yet again ramming through this legislation, which we know is only a stopgap measure. The Minister for Health and Ageing does not want reasoned and damning debate on this topic, which will go down at the next election as one of the great policy failures of the government.

In her contribution, the shadow minister and member for Lalor highlighted the fact that the previous minister for health, Dr Wooldridge, by his own shameful admission did nothing about medical indemnity. That is why we are facing this crisis. Clearly, Senator Patterson could not handle the crisis. Now we have the new minister, Mr Abbott, handling it. We hope that he can get this back on track. We will await the outcome of his inquiry. Clearly, there is a need to increase the quality of patient care. Doctors are not perfect; they do make mistakes. There are preventable deaths occurring in hospitals, as previously highlighted by Professor Jeff Richardson, and we need to force an open disclosure policy to reduce litigation. It is no good sweeping under the carpet those tragic cases in hospitals. There is clearly a need to bring them out into the open. Maybe litigation would not occur, because family members would be happy to accept an apology or a clear explanation of some medical procedure that might not have gone as expected. Anyhow, the government is accountable. I am very interested to hear what the member for Herbert has to say—whether he gives an account of the stewardship and the watch of Dr Wooldridge, who made it quite plain that he did nothing in the whole six years that he was minister for health. He stands condemned for that. (Time expired)