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Tuesday, 25 November 2003
Page: 22770


Mr MOSSFIELD (6:43 PM) —I rise to speak on the Medical Indemnity Amendment Bill 2003 and the Medical Indemnity (IBNR Indemnity) Contribution Amendment Bill 2003. I want to thank the member for Ryan for allowing me to speak next, so I can fulfil another commitment. As other speakers have been saying, these bills have come about because of the sheer incompetence of the government. No wonder the Prime Minister was forced to sack the previous Minister for Health and Ageing, Senator Patterson.


Mr Adams —A bandaid solution.


Mr MOSSFIELD —That is right. It is the new minister saying to the medical profession, `Take two aspirins and call me after the next election.'


Mr Adams —Well said.


Mr MOSSFIELD —That is what it is really about. Make no mistake, this is a problem that has been on the horizon for a number of years. The dark clouds formed years ago and the storm hit when United Medical Protection collapsed with liabilities of some $460 million. That was 18 months ago, in April 2002, and since then, while the storm has raged, very little has been done. The first bandaid solution included the IBNR levy and that resulted in a large number of doctors resigning from our public hospitals. The hospital in Blacktown in my electorate was one where many doctors expressed their intention to resign.

Discovering that their cure was worse than the ailment, the government did a double backflip with pike and announced there would be an 18-month moratorium on the levy while they worked out a real solution. This bill is a short, 18-month stopgap measure. While it has ensured that most doctors resume duties, it does not address the long-term problems associated with medical indemnity. Dr Bill Glasson of the AMA described the proposed moratorium as an `olive branch with thorns'.

I believe that it is important to examine the time line of events that has led us to this point in the debacle. On 29 April 2002, UMP collapsed. A day later, there was a joint statement from the Assistant Treasurer, Senator Coonan, and the then President of the AMA, Kerryn Phelps, which incorporated the government's guarantee to cover claims between 29 April and 30 June—the first bandaid that gave doctors no long-term certainty. On 31 May came the second bandaid, when the Prime Minister announced that the guarantee would be extended until 31 December, again giving doctors no long-term solution or certainty. On 23 October 2002, the Prime Minister announced his third bandaid, again extending the guarantee to cover claims until 31 December 2003 and still not putting into place any permanent long-term solution. Further tinkering occurred a couple of times throughout this year, with nothing even remotely resembling a long-term solution that would give the industry any certainty. The government has tinkered around the edges and put stopgap measures in place but has not tackled the real problems or made the hard decisions that are necessary.

I would like to refer to some newspaper reports on this topic that demonstrate just how out of touch with reality this government is. An article on page 8 of the Australian Financial Review of Tuesday, 2 September reads:

... Mr Howard said the levy was an important part of the commonwealth rescue plan for doctors caught in the medical indemnity crisis.

He rejected suggestions that the extra cost would force doctors to quit.

Exactly a month later, on 2 October, we awoke to the headline screaming `Children's surgeons quit, more to follow' in the Sydney Morning Herald. The article begins:

Eighteen orthopedic surgeons and obstetricians have quit public hospitals ... in the past week because of the Government's medical indemnity charge. And doctors warned more would follow if the levy was not deferred.

Two days later, that number had risen to 72 specialists who had announced their intention to resign from New South Wales public hospitals. On 6 October the Daily Telegraph carried the banner headline `A “tidal wave” of doctors to resign'. This was followed up on 9 October with the headline `2000 doctors to walk out. System in meltdown'. So much for the Prime Minister's rejection of suggestions that the levy would not force doctors to resign. How out of touch with reality can one Prime Minister be? Another Sydney Morning Herald article, this time from 4 October, under the headline `Doctors vote with their feet', reads:

Abbott told ABC Radio he accepted the problem was acute.

He said:

It does need to be resolved quickly ...

The Minister for Health and Ageing admits the problem needs to be resolved quickly, but this has been brewing since the collapse of UMP in April last year. The minister said it needs to be resolved quickly, but the government has had 18 months to resolve it.

I would like to go back to an article by Brian Robins in the Sydney Morning Herald on 4 May 2002 regarding the collapse of UMP. It states:

This week, under intense pressure as the private health system ground to a halt, the Federal Government stitched together a package to keep doctors operating until mid-year, but this doesn't resolve the problem for United's doctors.

It was a bandaid then, there was another bandaid six months later, and there is yet another bandaid with these bills. If a doctor were to allow a gaping wound to fester for 18 months and only put a couple of bandaids on it I am sure his medical indemnity insurance premiums would rocket as a result.

The government has dropped the ball on this issue. When UMP collapsed it should have been looking for long-term solutions, not short quick fixes. We have watched this government fumble the health portfolio since the day it was elected. The Prime Minister has in the past made no bones about the fact that he wants to destroy Medicare. It is all there on the public record about what a rort Medicare is in the PM's view and how he has always wanted to rip the guts out of it. We have watched as the states have been starved of money to run our public hospitals under increasingly meagre Commonwealth-state health agreements. The private health insurance rebate has become a financial monster that subsidised the private health insurance companies to the tune of $2.3 billion last year while ordinary Australian families are paying more and more for their premiums. In the health portfolio it has simply been one disaster after another, culminating in Senator Patterson's recent sacking—even the Prime Minister could not protect her any longer.

The action—or, should I say, inaction—of the government on this issue of medical indemnity has brought the public hospital system to the brink of collapse. As with all things health related, the government's policy will result in Australian families paying more and more for basic services. It is not just the Labor Party saying that; it is also the Assistant Treasurer, Senator Coonan, saying that. I quote from an article in the AustralianFinancial Review on 12 September, under the heading `Gloves off as surgeons object to levy'. In part the story reads:

... Assistant Treasurer Helen Coonan had confirmed the Australian Medical Association's warnings that the IBNR levy would make essential health care more expensive for many Australians ...

Peter Woodruff, the Vice-President of the Royal Australasian College of Surgeons, in the same article said:

We want a stop to the Band-Aid solutions which are going to cost the government, surgeons and ultimately patients a lot of money without fixing the long-term problem ...

All the government is doing is plugging holes in what appears to be the sinking ships of medical indemnity organisations.

We need a sustainable solution in which doctors can have certainty about their medical indemnity.

Unfortunately this bill is yet another bandaid that Dr Woodruff warned against. Nobody can deny that this is a very complex and complicated issue. The finger of blame for the current crisis can be pointed in a number of directions. We can blame UMP for not including the incurred but not reported liabilities in their accounting and not charging doctors appropriate premiums to cover that liability. We can blame the ambulance-chasing lawyers who have been advertising `no win, no fees' and thereby generating more litigation. We can blame judges and juries for awarding ever increasing payouts for damages to claimants. We can blame the state governments for being slow to reform tort law. Some even say we can blame American television for their plethora of legal shows where there is always a good outcome for anybody who sues. And of course we can blame the federal government for sitting on their hands while the system crumbles around them.

It is a complicated set of problems, but that is precisely why the federal government must take a lead in seeking a solution and should have done so a long time ago. If this problem is not resolved adequately, the health of ordinary Australians will suffer. David Little, who is an orthopaedic surgeon at Westmead Hospital, wrote a piece for the Sydney Morning Herald on 9 October under the heading `Left untreated, the indemnity system will cause more suffering'. It is a very interesting piece in which he points out many of the problems from his viewpoint, which is, after all, at the coalface. One quote in the article caught my attention. I believe it goes to the core of the argument. Dr Little says:

The way to reduce your risk is by not doing risky procedures.

It is not just the skyrocketing premiums that are driving doctors out of the hospital system. Dr Little goes on to expand on that statement:

Patient safety is at the heart of this crisis. As medicine advances, more risky things can be attempted. I perform leg lengthening operations for children born with a deformity. The complication rate is well documented to be more than 100 per cent, because many patients often get more than one complication. Most complications are reversible, although a small number suffer from permanent nerve, muscle or joint damage. The only way to reduce these risks is to deny the patient the procedure. Every child denied such intervention will continue to limp and then get arthritis in later life. I have much less risk of being sued if I ignore their plight than if I intervene.

That is a very important statement. It is a tough call. We have all heard the urban legends of doctors who stop at roadside accidents to help, only to be sued later, or, worse still, do not stop for fear of being sued. This is not the sort of society we should be aiming to produce. That is why the issue of medical indemnity must be solved.

Dr Little also makes some other very interesting points in his article explaining the mass resignations from our hospitals. He writes:

The Government's introduction of the IBNR levy was clearly designed to support the indemnity industry, not to support the provision of health services. Such scant regard for the real issues has led doctors to act.

He finishes his article by again calling on the federal government to resolve the matter in a cooperative manner. He writes:

Inaction has led to widening havoc, and only committed and co-operative efforts of state and federal governments and the medical profession can fix this. The loss of trust between the parties must somehow be repaired first.

This is the nub of the problem. A quick fix, delaying any real action until after the next election, will not suffice. I would like to turn my comments to a couple of letters that I have received from local doctors. The first is from Dr Norman Blumenthal, an obstetrician and gynaecologist who is not a member of UMP and therefore is not subject to the IBNR levy. He is, however, concerned for his colleagues. Having received this letter from Dr Blumenthal, I had a meeting with him in which he expanded on his concerns. He said in his letter:

To add fuel to the fire, there has now been an IBNR levy imposed by the Government which is virtually the last straw to break the camel's back. It is an unfair levy imposed retrospectively on doctors, without them having the ability to retrospectively recoup these expenses from the patients or from medicare.

I have worked in the Blacktown area for about 20 years and can tell you that after having spoken to a number of my colleagues, there is a real threat to the medical community and there will be significant early retirements, not only from general practice but also from specialist practice. There are also fewer doctors coming through the training system because less and less people want to be involved with such a poor medical system.

That gives you some indication of the situation. As I said, Dr Blumenthal was not a member of the UMP, but as doctors around him resigned or retired he faced an increasing workload and the added stress that accompanied that.

The second letter, which in fact is addressed to the Prime Minister, is from Dr John Fox. I believe it has been sent to most members of this House. He practices in Castle Hill, a suburb adjacent to my electorate. He would be in the member for Mitchell's electorate. Dr Fox has trained and worked in the United States and sees the experiences there being repeated here in Australia. In part of his letter he says:

I can assure you with absolute authority that in the US because of indemnity anxiety, all of the doctors practise defensive medicine.

By definition, defensive medicine means that if a patient comes in with a little bit of an ache or a pain, the doctors will order blood tests, x-rays, ultrasounds all on the basis of practising protective “defensive medicine” and not because it is “good medicine”. Patients get a battery of medical tests just to make sure that the general practitioner or the emergency room physician or the specialist is not missing some extremely unlikely diagnosis. Patients love the attention, but these tests cost someone.

There you have it. Dr Fox goes on to say:

That is part of the reason why medicine costs the US Government budget approximately 13% of its gross national product and that is nearly twice the GNP ratio in this country and I can tell you with authority that the spending of more money does not necessarily translate into better medicine.

Dr Fox, like Dr Blumenthal, was not a member of UMP and therefore was not directly affected by having to pay the IBNR levy—which goes to show the depth of feeling across the medical profession regarding the indemnity crisis. So you have Dr Little saying that it would be easier not to treat a patient and to reduce the risk that way, and Dr Fox going in the other direction and saying that expensive and unnecessary tests to cover every conceivable yet unlikely circumstance blow out the costs even more. Whichever way it goes, it is a bad outcome. We need to fix this problem, not simply put another bandaid on it. I am pleased that the Labor Party have seen fit to support these bills, but we call on the Howard government to show some true leadership for once and to implement some long-term and sustainable solutions to this particular medical problem.