NR Rally - Speech by Stephen Milgate

NR Rally – Speech by Stephen Milgate – 28 July 2003

• UMP members are not guilty!!!
• The unfunded liabilities of UMP which are said to be in excess of $400 million are not the fault of UMP members.
• UMP members have paid everything that has been asked of them.
• UMP members have paid more in medical indemnity premiums than their colleagues in other medical indemnity funds.
• Despite this, they have been told that what they have paid is not enough.
• Doctors in other States who have paid less have covered their IBNRs. UMP has not.
• UMP has been turned upside down and inside out by financial regulators.
• UMP has been scrutinised by more bean counters than any other insurance company in the history of Australia “with a possible exception of HIH”.
• No Directors have been found to have broken the law.
• No employees have been found to have broken the Law.
• There is no evidence of misappropriated funds.
• UMP’s financial reporting was done by Chartered Accountants and Auditors in accordance with the accounting law.
• For years, governments turned a blind eye to Tort Law Reform and the abuse of the laws of negligence despite the pleadings of doctors through their medical organisations, including UMP.
• Nothing was done and medical indemnity funds were forced to jack up premiums in a desperate attempt to survive.
• Annual increases in indemnity premium costs in the order of 90%, 44% and 38% became common.
• Finally, in desperation, government acted.
• We’ve all heard of the chaos created following changes demanded by the Urgent Issues Group, and the “claims spike”, both of which followed government intervention.
• Now UMP members have been told they should have paid more in previous years.
• We have heard comments that the “doctors should have managed their own insurance company better”.
• They should have put more money aside for future liabilities.
• These sentiments are well entrenched in sections of the Federal Health Bureaucracy. Federal Governments, of all political persuasions, over many years have urged doctors to charge fees consistent with the Medicare rebate (the Medicare Benefits Schedule).
• The Federal Health Department uses terms such as “schedule fees and schedule fee observance”, which it monitors regularly.
• Private Health Funds want doctors to join no-gap schemes and some punish patients with lower rebates and bigger gaps if the doctor doesn’t charge the “health fund fee”.
• Meanwhile, Government third party funding agencies refuse to index their rebates at rates that reflect changes in real costs.
• They expect compensable patients to be cross-subsidised by non-compensable patients.
• GP’s are encouraged to bulk bill patients.
• In the past I have seen newspaper advertisements naming doctors that didn’t bulk bill in an attempt to embarrass them and hold them up for public ridicule.
• If the Chairman of the board of UMP had called a meeting of doctors and instructed them to increase fees so they could pay more in medical indemnity premiums, he would have been liable for a personal fine of up to $250,000 and UMP would have been liable for a fine of up to $10 million for breaching the Trade Practices Act.
• If the Chairman of UMP had put out a fee schedule for members to use, which would have enabled them to pay more in medical indemnity premiums, he would have been breaking the law.
• UMP members are now being asked to pay up to $400 million into a fund managed by the Federal Health Department – the IBNR Levy.
• Who will control the administrative costs of this IBNR fund incurred by a department not answerable to those who pay this levy?
• Access Economics has revealed that the Federal Health Department administration costs in this year’s budget have increased by 17%. This is the biggest single increase in any area of health spending in this year’s budget.
• Are these people qualified to manage your money?
• How much of it will be paid out in claims?
• How much of it will be spent on a growing bureaucracy?
• The details of the IBNR levy are well known to most of you. We can give you more information today if you need an update.
• You face the immediate prospect of an IBNR levy of up to 50% of your 1 July 2000 subscription rate. It will be payable in the 2003-2004 financial year.
• Without immediate reductions in your UMP premiums going forward (and remembering your 20% existing levy will not expire until December 2005), you face the prospect in this financial year of a further 20% increase in total medical indemnity costs in addition to any other increases in the pipeline.
• The question is – Is this affordable? Is it justified?
• If this cost cannot be absorbed, it will be passed directly on to patients and there will be more uncertainty and disruption to the supply of medical services.
• This is contrary to the intention of the Federal Government’s Rescue Package, which is designed to reduce uncertainty and to keep medical services affordable by keeping medical indemnity affordable.
• The UMP IBNR levy, because it comes at a time when total costs have not declined, could undo much of the good work in Tort Law Reform and other measures designed to reduce uncertainty and promote confidence in the future of Australian medicine.
• We should not forget our older doctors, many of whom keep contributing past the usual retirement age.
• Australia needs to give greater recognition to the value and the contribution of its senior doctors.
• Senior doctors must be encouraged to stay in the medical workforce. They provide the wisdom and experience that younger colleagues and patients so desperately need.
• Younger doctors must be encouraged to keep investing their time and skill in the medical profession. They are increasingly seeing a better future elsewhere. A profession without conscientious younger doctors is a dying profession.
• UMP members are innocent. But today they are faced with having to pay many thousands of dollars as if they were guilty. Surely, there must be a fairer system.