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Thursday, 25 August 1994
Page: 379

Senator CROWLEY —Yesterday, Senator Sandy MacDonald asked me a question concerning medical indemnity insurance. I seek leave to incorporate this answer in Hansard.

  Leave granted.

  The document read as follows—

  The Government is aware of the increasing cost of medical indemnity particularly in relation to some specialities and GPs who practise obstetrics. These increases have related directly to a move by Medical Defence Organisations (MDOs) away from a single common contribution rate (mutuality) towards a specialty type of risk rating, at the same time as MDOs have attempted to improve the level of funding of past liabilities. These liabilities occurred in the late 1970s and early 1980s when the frequency and size of claims did increase dramatically but contributions were not adjusted to meet this liability.

  Data do not show a significant decline in the number of specialist obstetricians in recent years as medical defence premiums have increased. However, there has been a continuation of the long term reduction in the number of GPs providing birthing services. In the period from 1988 to 1992, during which time there was a dramatic rise in the cost of indemnity, there was a decline of 732 in the number of practitioners delivering babies in the private sector—687 of these were GPs. This trend is of particular concern for rural areas where access to specialist obstetricians is limited.

  A report to be completed shortly by the Birthing Issues Sub-Committee of the Review of Professional Indemnity Arrangements for Health Care Professionals will identify options to address these issues.

  One option to stabilise the cost of medical indemnity could be the re-introduction of the principle of mutuality, while maintaining a measure of individual risk rating.

  The Review of Professional Indemnity Arrangements for Health Care Professionals released an Interim report in March 1994. The Report discussed options for compensating patients who experience adverse outcomes to health care, including capping damages under some headings. Consultations are under way on the recommendations and issues raised in the Report and the Government will consider its response when the results of consultations are known.