Doctors, Damages And Who's To Pay

Sydney Morning Herald

Wednesday August 13, 2003

The community may be prepared to accept an end to white-water rafting or abseiling if public liability insurance becomes too costly. But an end to childbirth would not seem to be an option no matter how many obstetricians quit because of expensive professional indemnity insurance. Risky sports are one thing, essential medical procedures quite another. That is why governments cannot extricate themselves from the ongoing mess that is medical indemnity insurance. That is why the taxpayer cannot avoid picking up part of the cost. The question is how best to spend the public's money.

The Federal Government is committed to subsidising premiums, and claims to contain the cost of professional indemnity insurance. That commitment already totals hundreds of million of dollars, not even counting the tax deductibility of premiums. It is likely to rise as increased premiums spread among high-risk specialities.

Yet it seems it is not enough. Some doctors usually, but not exclusively, those earning high incomes still face annual premiums approaching $100,000. And they still worry they might not be adequately covered for damages claims years, even decades, ahead. Of Australia's 700 obstetricians, 45 quit in 2001. This is about double the number expected, given the usual rate of retirement. Experienced doctors are reportedly leaving other high-risk specialties such as neurosurgery. Young doctors are wary of entering them. This bodes ill for speciality areas where high degrees of skill and experience are essential. It is also an unhappy situation for people in rural and remote areas of Australia who are the first to suffer when services dwindle.

The solution to this imbroglio, which has been coming for more than a decade, is complex. It involves rationalising insurance arrangements, ensuring better governance of insurance companies, improving hospital standards, raising clinical standards and lifting communication skills of doctors. (After all, most people who sue do so to find out what happened, not to seek money.) But most important, it involves changes to the compensation regime.

At present, whether those suffering serious injuries receive compensation or not depends more on luck than on logic. Some receive closely capped payments through state compensation schemes. Some get nothing, relying on family, friends and community. A few win multimillion-dollar payouts through courts payouts which raise premiums and distort perceptions. It is only these people who make the news. There is a need for a fairer system.

Most of the catastrophically injured are not victims of medical negligence, which accounts for just 11 per cent of such cases, but rather of traffic accidents and other misfortunes. There is a strong humanitarian argument for a no-fault scheme to care for them. The NSW Government supports such a scheme, as do doctors. The Australian Medical Association wants taxpayer funding, arguing it would lead to a drop in doctors' indemnity premiums. Perhaps, though it might as easily mean higher profits for insurers. How such a no-fault scheme should be funded is certainly a matter for debate, but the principle is not.