Doctors and Patients King Hit by 52% Medical Insurance Cost Hike – 12 December 2001

NSW doctors have been hit by a cost increase of around 52% in their medical insurance costs for 2002. This will see medical fees rocket as doctors struggle to remain financially viable, Mr Stephen Milgate, Executive Director of the Australian Doctors’ Fund said in Sydney today.

The increases are a combination of escalating litigation against medical practitioners (most pronounced in NSW), and the aftermath of insurance cost hikes following the September 11 tragedy which is predicted to drain the worldwide insurance pools of up to $US60 billion.

“It means NSW orthopaedic surgeons will be paying $85,000 per annum once GST and stamp duty is added to their new base liability premiums of $74,900 per annum. Neurosurgeons and Obstetricians are in the same boat despite having their premiums capped by State legislation. Hand surgeons have the biggest rises (80%) but all doctors have experienced rises of 52% or greater including GP’s, many of whom will be forced to end bulk billing to remain viable,” Mr Milgate said.

Chairman of the Australian Doctors’ Fund, Dr Bruce Shepherd said, “Many doctors may choose to leave NSW and go interstate where insurance premiums are lower. Doctors working in the public hospital system will find it hard to continue as their costs will be far greater than their remuneration.”

Mr Milgate said, “There has been no attempt to compensate NSW VMO’s for cost increases over the last 5 years let alone this massive price rise. Any future pay rise for VMO’s will have to be substantial to catch up.”

The NSW Government’s response to previous price hikes which saw one-off calls on doctors, equivalent to one year’s premium, was to pass the Health Care Liability Act 2001. The Act makes doctors’ insurance compulsory. In addition, the NSW Government has promised to pick up public hospital claims in excess of $1 million payouts, but this is not retrospective and will not have any impact on cost hikes.

“Sadly, this Act will not significantly reduce future premiums and the requirement by the NSW Government that only its approved medical defence insurers will have a licence to operate in NSW means that NSW doctors are likely to have only one medical defence insurer to choose from.”

“Litigation against doctors has been a gravy train for some legal professionals but the gravy is rapidly drying up. There are estimates that between 40%-60% of payouts to plaintiffs is chewed up by legal costs.”

“If medical fees are to remain affordable then specific legislation which confines medical litigation to areas of real negligence rather than imperfect outcomes must be passed in all States,” said Mr Milgate.