Doctor’s fees must rise in NSW & QLD to cover 10 year medical indemnity levy – 22 August 2003

Doctors will meet again on Sunday, 24 August 2003, at the Hilton, Sydney Airport, at 9.00 am to discuss the Federal Government’s decision to impose a levy over 10 years on members of United Medical Protection (UMP), Australia’s largest medical indemnity fund.

The meeting will be chaired by Dr Bruce Shepherd, chairman of the Australian Doctors’ Fund. Speakers will include the Federal President of the AMA, Dr Bill Glasson.

“The decision of the Federal Government to proceed with an extra levy on doctors who are members of UMP will have an immediate effect on doctors’ fees in NSW and Qld”, the Executive Director of the Australian Doctors’ Fund, Mr Stephen Milgate said in Sydney today.

As from this month most doctors in NSW and a good number in Qld will be getting extra bills from the Federal Government through the Health Insurance Commission ranging from $1,000-$25,000 p.a. This is on top of their existing rising medical indemnity premiums and will see general surgeons paying almost $80,000 per year in total.

The levy is being imposed as part of a rescue package to establish a fund to meet future unfunded liabilities of UMP, currently in provisional liquidation.

“These extra charges will come on top of the normal future premium increases and stamp duty costs as well as a previous levy which is not due to expire until 2005”, Mr Milgate said.

At a meeting on 20 July 2003 in Sydney doctors passed a unanimous motion calling on the Federal Government not to proceed with the IBNR levy. There were some concessions but the decision was taken by government to proceed to impose a levy of 50% of the 2001 premium for 10 years. This will mean that a general surgeon could pay around $190,000 extra over the next 10 years on top of all other medical indemnity costs and future increases.

The levy charges for 2003 have been calculated by the NSW AMA as follows:

50% of 2000-2001 premium in 1st year (levy to run for 10 years) Estimated total indemnity costs for 03-04
Non-procedural GP $1,800 $7,200
Obstetrician $35,000 (* $8,100) $146,000
Orthopaedic Surgeon $23,000 $88,000
Plastic surgeon $23,000 $88,000
General surgeon $19,000 $78,000
Anaesthetist $8,000 $37,000
Psychiatrists $4,000 $15,300
Paediatricians $4,000 $15,300

Source: NSW Doctor August 2003 p.7 – How can we carry on? Laurie Pincott
NB: these figures are based on middle income bands and could be higher or lower in some cases * government claims a subsidy will reduce this levy to $8,100 on average for metropolitan obstetricians

“This levy which will impose a significant extra cost burden on doctors is coming at a time when there is no future reduction in medical indemnity premiums in sight despite all the hard work being done on Tort Law Reform”, Mr Milgate said.