Laurie Ferguson (Reid, Australian Labor Party, Shadow Minister for Consumer Affairs) Share this | Link to this | Hansard source

I rise to speak regarding another amendment to the medical indemnity legislation, that legislation implemented by this incompetent government in response to the 2002-03 crisis in medical indemnity insurance. The government’s piecemeal and inept approach to this crisis is reflected in the need for ongoing attention to the legislative stopgaps put in place by the Howard government in 2002-03. The Medical Indemnity Legislation Amendment Bill 2006 amends the Medical Indemnity Act 2002, and the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003.

These amendments, like many more before them, correct flaws in the medical indemnity legislation implemented by the Howard government in response to the 2002 indemnity crisis and the flaws and errors revealed through its administration and operation of the various schemes implemented since the crisis started. The bill addresses elements of the Run-Off Cover Scheme, ROCS, following concerns raised by medical indemnity insurers and medical practitioners. In April 2002, United Medical Protection Limited, UMP, and its wholly-owned subsidiary, Australian Medical Insurance Limited, AMIL, who together provided indemnities to approximately 60 per cent of Australian doctors, went into provisional liquidation. As a result, the entire medical indemnity regime in Australia was undermined.

In response to this crisis the government rolled out a series of measures to alleviate the upward pressure on insurance premiums and the unsustainable operating environment that existed for some medical indemnity providers. The measures included the Run-Off Cover Indemnity Scheme, the High Cost Claims Scheme, the Exceptional Claims Scheme, the Medical Indemnity Premium Subsidy Scheme and the Incurred But Not Reported Indemnity Scheme, IBNR.

The Run-Off Cover Scheme began in July 2004 and was designed to provide insurance for doctors who had left private practice, at no cost to them but funded through a levy on medical indemnity insurers. The intention was that medical indemnity insurers would provide cover to doctors who are eligible for ROCS on the same basis as the cover that was provided to them in the workforce and the government would reimburse medical indemnity insurers for the cost of any eligible claims incurred. The principal changes that this bill implements relate to doctors who, for various reasons, may have had gaps in their medical indemnity cover during their careers. Many of them would have subsequently addressed this situation by purchasing retroactive cover for those periods. However, under the present legislation they would not be covered under ROCS for incidents that occurred during these uncovered periods even if these claims were covered under their last contract of insurance.

Also, in discussions with medical indemnity insurers it became clear that they would not always be able to determine whether a doctor had purchased appropriate medical indemnity insurance cover at the time of the incident due to movement of doctors between insurers. This bill addresses this flaw by removing the requirement for a doctor to have had medical indemnity cover at the time of an incident for it to be covered by ROCS. This amendment will mean that the terms and conditions of cover provided under ROCS will be equivalent to those of the doctor’s last pre-retirement contract. The aim of this bill is to eliminate any uncertainty for doctors about their eligibility for ROCS which may arise out of the limitations of historical records of indemnity cover. However, given the government’s track record on managing this suite of programs and its related legislation, it would come as no surprise if this change had further flow-on effects. For example, some medical insurers fear that doctors may be underinsured for periods in which a claim is made under this altered arrangement.

The bill also makes other changes to the Run-Off Cover Scheme, including: increasing the number of days a medical indemnity insurer has to report if a doctor becomes eligible for ROCS or ceases to be eligible for ROCS to 61 days; clarifying when the government should pay medical indemnity insurers for claims under ROCS; and changes to retroactive cover. It is not my intention to outline more of the government’s corrections to its flawed bills but I would like to highlight their mismanagement of this process.

The bill amends legislation implemented to address the crisis which first reared its head in November 2001, when Australia’s main medical defence organisation, or MDO, UMP/AMIL, failed to fund $460 million worth of ‘incurred but not reported’ claims. In the following month, UMP increased its premiums on average by 52 per cent. However, for obstetricians and neurosurgeons this was as high as 123 per cent.

In February 2002 AMIL also faced pressure by APRA to raise additional capital to meet minimum capital requirements, and APRA gave AMIL until 30 June 2002 to raise over $30 million to meet these requirements. The government intervened on 28 March 2002 and provided a short-term guarantee of up to $35 million to enable AMIL to meet its minimum capital requirements. In April 2002 UMP unsuccessfully sought further assistance from the government to enable its directors to get personal liability insurance. On 29 April of that year UMP/AMIL filed for a provisional liquidator, which was appointed on 3 May 2002, whose main objectives were to determine the company’s solvency and ability to continue trading. During this time, the Prime Minister made a commitment to ensure that, in the event of provisional liquidation, members were covered while a long-term solution was developed. On 29 April 2002 the Minister for Revenue and Assistant Treasurer announced that the government would guarantee claims arising from any procedures from 29 April to 30 June 2002 by doctors covered by UMP, legislate this guarantee and assist in determining the long-term viability of UMP.

The AMA was unsatisfied with the government’s guarantees and, as a result, the government faced closures of wards and postponement of surgery as specialists sought greater certainty. Letters from both the Assistant Treasurer and the then minister for health, and action by the Royal College of GPs and the AMA, then led to acceptance of this guarantee. It was finally approved by the courts in June 2002. This included approval of the extension of the guarantee from 30 June 2002 to 31 December of that year.

In addition, the government also agreed to assume responsibility for the IBNR claims where the incident giving rise to the claim occurred before 30 June 2003. To recoup these funds the government imposed a levy on members of the MDOs. The mechanics of the levy received strong criticism from doctors and, in response, the government announced a number of changes to the scheme which exempted doctors employed by public hospitals, all doctors 65 years of age and over and doctors who might retire early due to disability or permanent injury.

With the high cost of medical indemnity plaguing the sector, the government also implemented a medical indemnity premium subsidy scheme to subsidise premiums for obstetricians, procedural GPs, neurosurgeons and GP registrars undertaking procedural training. This was extended in 2004 to recognise indemnity costs relative to incomes. In addition to the IBNR levy and the MIPSS, the government implemented the High Cost Claims Scheme to further reduce pressure on the MDOs. Under the scheme, 50 per cent of insurance payouts over half a million dollars are reimbursed to medical indemnity providers.

In May 2004, measures related to run-over costs were also implemented to provide run-off insurance cover for medical practitioners who had retired, left practice due to disability or maternity leave and the legal representatives of deceased medical practitioners. This filled the gap which arose when the government committed to ‘claims made’ cover only. In the event that a claim was made against a retired doctor, he or she would not be insured under the new arrangements.

From the inception of the crisis the government’s handling of this matter has resembled a bad scene from a Carry On movie. The government’s response has been littered with failed legislative attempts, reviews, countless budget measures and revenue clawbacks. On the legislative side of this Carry On-like mismanagement, the medical indemnity legislative package designed to address the crisis contains eight bills which have been before the House 16 times. Two of these bills relate to taxation matters which form part of the cost recovery measures. This count does not include consequential amendments to the human services act, the Australian Prudential Regulation Authority Act and tax act amendments. If we added these acts we would have more than 19 pieces of legislation involved in this package.

The budget side of the government’s mismanagement tells a similar story. Since the crisis’s inception, the Howard government has budgeted $363 million through 23 separate budget measures since 2002-03. However, in what constitutes further evidence of the government’s blatant mismanagement of the crisis, the actual costs of the response at June 2005 were $283 million. This underspend occurred as a result of the government’s need to claw back revenue from UMP under the incurred but not reported United Medical Protection support payments following the competitive neutrality review which found that the Howard government’s package of assistance had helped UMP restore its financial position much sooner than expected and that this assistance had delivered a competitive advantage to the insurer.

Total revenue under the scheme, dating back to the 2003-04 budget year, was originally estimated to be $129 million, but, following these competitive neutrality changes, revenue was subsequently reduced to $63.5 million. This means that the government relinquished $65.5 million of revenue as a result of its failure to take into account competitive neutrality implications of its support package to UMP. Since Graham Rogers’s report into this matter, UMP has been required to repay $35.4 million in competitive advantage payments.

These countless measures, legislative amendments and budget estimate revisions paint a vivid picture of the Howard government’s bungled attempts at managing this crisis. Did this crisis need to occur for action to take place? I would argue that this bungled approach reflects the negligence of the Howard government in not seeing the signs and managing the risks which were emerging for many years prior to the 2002-03 crisis. Anyone would have thought, given the Howard government’s response to this crisis, that this situation arose overnight. However, in reality there were a number of indicators, emerging over many years, which suggested trouble was brewing in the insurance and indemnity sector.

There was of course, in 2001, the collapse of HIH. HIH was Australia’s second largest insurer and had won a large share of the market for certain classes of liability insurance, particularly public liability, through an aggressive strategy of cut-price premiums. Its demise caused premium rises to accelerate.

This corporate collapse was soon followed by the tragic events of September 11 in the United States, which forced the insurance industry to revise its underwriting practices. Insurance against terrorism disappeared and premiums were increased to recover the estimated $US25 billion to $US30 billion, at least, in September 11 claims. These price increases were passed from reinsurers through Australian insurers to policyholders. Meanwhile, medical indemnity prices for medical practitioners had been increasing for some years.

Additionally, important structural problems lurked beneath the price rises. The Tito report, a comprehensive review of medical insurance and compensation conducted in 1991, stated:

While there have been significant indemnity subscription increases, these are rather indicators that financial adjustments and changes are occurring in the MDO industry, that the subscription rates prior to these increases were probably too low to properly fund liabilities, and that the major cause of increases has been the move away from the previously universal principle of mutuality.

The rest of the story of this crisis is well known. In 2002 UMP and its wholly owned subsidiary, Australian Medical Insurance Ltd, went into provisional liquidation. This was the largest medical insurer in Australia. It provided coverage to approximately 60 per cent of medical practitioners nationally and 90 per cent in New South Wales. Its capital reserves had foundered in the face of unprecedented large insurance payouts, a $30 million loss arising from the collapse of HIH, which was one of UMP’s reinsurers, a claims spike ahead of the introduction of the new Health Care Liability Act and higher capital requirements imposed by APRA. The failure of its management to properly price products must also be acknowledged.

Faced with the imminent collapse of an indemnity giant, the Howard government was finally forced to act. Back in 1991, the then Labor government established the Tito review of compensation and professional indemnity arrangements for healthcare professionals, headed by senior bureaucrat Fiona Tito. The report was handed to the then minister for health, Dr Carmen Lawrence, in January 1996—barely a fortnight before Paul Keating called an election.

The Tito report provided a careful analysis of the arrangements in existence to provide for patients injured through negligence or misadventure. The report identified an array of major problems including, among others, that public data was not available on adverse events and negligence actions, many treatments had an inadequate evidence base and were not sufficiently outcome focused, neither health professionals nor healthcare consumers had access to adequate information on the risks and benefits of treatment options, patients did not have adequate access to their own healthcare records, and the system was plagued by poor communication, particularly if an adverse event had occurred.

The medical indemnity crisis has been a long time coming, and developed in the context of a broader crisis in public liability and other forms of professional indemnity insurance. However, beyond the issues facing the insurance and reinsurance markets of the last decade or so, there are a number of health sector specific issues which are often far from this debate. As the Tito report found, there was—and still is, given the lack of action—a positive relationship between how we run our healthcare system, the quality of care delivered and the systems used to deliver the quality care.

It all sounds so obvious, but you would not know it having followed the misadventures of the Howard government in this particular area. It is now 10 years since the preliminary findings of the Quality in Australian Health Care Study were presented to the federal government and published in the Medical Journal of Australia. That study estimated that 18,000 patients die each year in Australia from medical mistakes and another 50,000 suffer permanent disability. Each year in Australia there are about 6½ million hospital admissions and at least 10 per cent of these involve an adverse event. Half of the adverse events are connected with an operation, 13 per cent with diagnostic errors, 11 per cent with pharmaceuticals and two per cent with anaesthesia. Although most mistakes are not serious, one in 20 is fatal. About half the mistakes are preventable.

We do know that problems due to medications cause some 70,000 hospital admissions a year and were estimated to cost $350 million in 1999. Analysis of data from the Quality in Australian Health Care Study estimated that 43 per cent of adverse drug events associated with hospital admissions could be prevented. The data suggests that the cost of all medical errors is over $1 billion annually and could be as high as $2 billion. We know that more money is spent in Australia fixing injuries caused by medical mistakes than on treating the victims of road accidents. An analysis of adverse events published in 1999 in the Medical Journal of Australia showed that human error is the cause of more than 70 per cent of these events. The key categories of human error are failure in technical performance, failure to make decisions and/or act on available information, failure to investigate or consult, and lack of care or failure to attend.

Delays in diagnosis and treatment contributed to 20 per cent of adverse events. Increasingly, mistakes are occurring not in routine procedures but in complex diagnostic or technical tasks in which the term ‘error’ may be a misleading over-simplification. Human error is inevitable, even for the best trained healthcare provider. However, all that can be done must be done to reduce the level of human error in the healthcare sector.

The general approach needs there to be less focus on individuals—the majority of errors do not result from individual recklessness—and more attention on basic flaws in the way the healthcare system is organised. Systems must be developed to better protect patients from the inevitability of human error and to protect healthcare workers from unnecessary risks.

To do this, it is necessary to look at the factors in the healthcare system that may interfere with cognitive or technical performance, such as poor communication, insufficient use of information technology, sleep deprivation, lack of appropriate supervision, and even the nature of a culture that portrays mistakes as failures. There is certainly a place for high-tech reporting systems, but many solutions can be quite simple, even obvious—such as frequent hand washing by doctors and nurses and better staff allocation.

We must work towards a national standards framework of self-reporting and open disclosure that encourages medical practitioners to systematically monitor and improve their own professional behaviour and the behaviour of those they supervise. Reviews of mortality and adverse events should be open and frank, with no place for a head-in-the-sand approach and blame shifting.

Addressing quality and safety should involve not just hospital staff but also healthcare professionals in the community, patients and their families and carers. It must also include policy makers and administrators at the federal, state and local levels. The best reason for addressing issues related to safety and quality is that, when something goes dreadfully wrong, many people suffer and there are long-term consequences for all. Therefore, as well as adopting a proactive approach to reducing errors and claims, it is this impact on patients, their families and communities which dictates the need to address these issues of quality and safety.

In conclusion, the medical indemnity legislative package designed to address the crisis contains eight acts which have been before the House, as I said, 16 times. The Howard government has budgeted $363 million in assistance through 23 separate budget measures to address the crisis. I would not exactly call this an efficient approach to policy development.

Labor calls for clarity as to how this mishmash of schemes and levies is being managed and clarity as to who is leading this approach. Is it the Treasury or the department of health, the minister for health or Treasury ministers? We demand better representation of all aspects of the sector involved, beyond the medico-centric approach which the government’s path has taken us down. We demand a guarantee from the Howard government that, by taking this bandaid ‘fixes-benefits’ approach, we have not created a precedent which other medical and health professionals will also seek to exploit.

This bungled approach reflects a decade of neglect in addressing the emerging policy issues in medical indemnity. Nevertheless, given the Howard government’s disinterest in broader healthcare reform, perhaps we should not be so surprised at seeing another mediocre policy outcome from the Howard government.

Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

It is my pleasure to add further support for the amendments contained in the Medical Indemnity Legislation Amendment Bill 2006, which seek to amend the Medical Indemnity Act 2002 and the Medical Indemnity (Prudential Supervision and Product Standards) Act 2003. I will refer to a bit of history. This is something that, as the previous speaker said, has been going on for some time. However, contrary to the previous speaker’s assertions, I am very thankful that this government was able to listen and was in a fiscal position to be able to act. That is the difference between the coalition and the opposition—we have fiscal responsibility and a financial capacity so that, when an emergency issue breaks out, we have the resources and the will to be able to resolve such issues as they arise.

On several occasions I have spoken in the House on the issue of medical indemnity. It has always been of considerable importance in my electorate. I am a very fortunate member in that I have a very active medical workforce in my electorate, and I certainly give thanks to that workforce. But we did have a major issue when we saw the collapse of UMP, which threatened our vital health services right across the Riverina, as our specialist professionals were faced with enormously swelling insurance premiums and the possibility of practising without legal protection—an area that I am sure none of us as members want to see our professionals engaged in.

In response, the government ensured swift action to enable and assist our healthcare professionals to be comforted that they would have access to a medical indemnity cover that was provided by regulated insurance and, more importantly, was underpinned and underwritten by this government. Some 18 months before United Medical Protection did collapse, I recognised, through the very good work of an obstetrics practitioner in my electorate, Dr John Curry, that there would be a problem. There were continuing calls on the profession to provide further premiums and further underwriting of UMP. He visited me and advised me that he felt that there was an impending disaster with UMP. He advised me that he felt that there would be a collapse of this company. Their calls were getting greater and the professionals were not able to match the requirements from the company.

He raised my awareness of this matter. We travelled over to Canberra on numerous occasions. We addressed our backbenchers and, in our committee activities, I held many meetings in this House for backbenchers where Dr Curry was able to sit down and highlight the issues that were facing particularly obstetrics cover and to suggest that, unless somebody actually stepped in and did work on our tort law reform—and that was a state issue—to particularly raise the issue of the 21-year statute of limitations and the way in which the rulings of the court were giving extreme payments in compensation to affected people, there would be a serious problem. Of course, we do not deny people compensation, but the obstetrician certainly does have a difficult road to walk in that the statute of limitations does exist for 21 years and when you are looking at studying obstetrics you have to decide whether that is a road that you want to travel or whether you will just go into gynaecology.

Then another crisis emerged in the state hospital system whereby there was no indemnity and no cover for our practitioners, professionals and GPs alike to be able to practise in the state hospital system. I was very involved in the process of trying to resolve this issue with the then New South Wales state minister, Craig Knowles. The state government was a long time coming to the party—I think our practitioners ceased their cover on New Year’s Eve—and it was almost at the death knell on New Year’s Eve that Minister Knowles came in with an agreement to cover any practitioner who was going to provide services in a public hospital. It was an anguished time for all, not just for the professionals but moreover for the constituents right across the Riverina who were in a state of flux and uncertainty as to how their services were going to be delivered and how their operations were going to take place, particularly if they did not have private health coverage. We were able to resolve that, and it certainly was appreciated by my medical specialists because it enabled them to be able to offer the service for which they had trained for all those years and that they had undertaken an oath to provide.

The UMP crisis very quickly saw the exodus of specialists who had decided to retire or who were thinking of retiring in that three- to five-year bracket after the UMP downfall. They were insecure about what was going to happen in their family lives and to the assets they had built up over long periods of work, commitment and dedication to regional and rural electorates. So an enormous effort had to be put in by successive health ministers. The problem really did escalate and affected obstetrics. Obstetricians have one private outlet in the Riverina—Calvary Private Hospital—and they decided that because of the additional premium they had to pay to practise private obstetrics they would remove their services from Calvary maternity services.

We had about 600 to 700 deliveries per annum in the Calvary maternity hospital and about 700 to 800 in the Wagga Wagga Base Hospital, which is a regional base hospital. It was very obvious that the base hospital was not set up to deliver all the babies right across the Riverina, so the state system did not want the Calvary services withdrawn, because they were not able to adequately cope. We were faced with an emerging issue that may have seen normal, healthy pregnant mothers being airlifted to a Sydney or other city or metropolitan hospitals to give birth in a normal, very healthy way, and that generated a major march. About 2,000 members of the community—mums and dads with babies in prams and strollers, and grandparents—marched up the streets of Wagga Wagga to demonstrate that they needed the facility at Calvary maternity hospital to continue. The call was that we in the government should resolve the issue—and we did. The Minister for Health and Ageing, Tony Abbott, came in, as he always does—he is certainly the best friend the Riverina residents have ever had in health—and resolved the issue. It was a significant and great benefit to the people of the Riverina.

We then introduced a levy system, but some anomalies started to develop within that system. I pay tribute to the former health minister, Kay Patterson, and, more particularly, to Tony Abbott, who, as I said, is the best friend the Riverina people have ever had in health. He started to undertake the discussions that needed to take place in order to resolve a very complicated and longstanding system that was left to languish for many years before this government came into power in 1996. It certainly did not happen overnight. It was a problem that had languished for many, many years.

I turn now to one of the issues we saw emerging with new entrants coming into the system. For example, one of my professionals, a surgeon, David Littlejohn, was a new entrant to the system, and it seemed as though he was going to have to pick up the tail and pay for all the previous issues of the people who came before him. I was very keen to resolve that. Young surgeons were coming in to practise in the Riverina, and they had committed to stay in the Riverina and raise their children there, yet it looked as though they were going to have to pay for all the past issues of other surgeons. That meant that practising in the regions was not a viable option, and it forced them to move to a city area where the critical mass and turnover are greater and the ability to earn revenue is increased and you can pay for the call upon you. Of course, Tony Abbott came in and resolved that issue for us.

It has been a moving feast for ministers, because every day there has been a new and extremely significant flaw or issue they have had to deal with and try to resolve. Quite rightly, the Australian public were beside themselves, because they thought there was every chance that they would lose their services, and that had a major impact financially, socially and emotionally. We saw that people moved out of obstetrics and into the field of gynaecology in order to reduce their premiums. Because there was no certainty in obstetrics, young clinicians who were looking to practise in that field started to reassess whether they would do that or go on to another craft or another field.

What we have done is really underpin a health service that, in essence, with this government’s support and assistance—particularly with the minister’s assistance—has become better and better at delivering services that the Australian people need. We have had issues with orthopaedics and anaesthetists. We certainly had issues with anaesthetists, which the minister had to step in and resolve. This minister has had more call upon him to be able to utilise common sense and reason to get to the bottom of long and ongoing issues in medical services. He has finally been able to resolve many of those issues so that he can assist us to deliver the expectations of our regions. I am particularly interested in the regions.

The government’s original package of medical indemnity legislation in 2002 addressed the affordability of medical indemnity for doctors and the industry’s long-term viability in a period of upheaval. Thanks to these changes, our medical practitioners in private practice have been able to obtain affordable medical indemnity insurance cover and insurers have been protected against more extreme claims. However, those who have left the medical workforce, including our retirees and those on maternity leave, who are often faced with significant ongoing costs for run-off cover for incidents which occurred during their careers but had not been reported at the time, have now been able to be protected and have their issue revolved.

The ROC scheme began on 1 July 2004. It is a logical extension of the medical indemnity package designed to provide secure insurance for doctors who have left their private practice. The intention was that medical indemnity insurers would provide cover on the same basis as doctors who were still in the workforce. But, in the former case, the government would reimburse the cost of claims to insurers. Coming back to the fiscal responsibility and financial management of this government, that can only happen when you have across-the-board, good financial management and there is money in the bank. Many times this government has been criticised for the surplus that its good fiscal policy and financial management engenders. But that is why you need surpluses: when emergencies come into the system, they have to be resolved and there is money there to resolve them rather than running into deficit like the New South Wales Labor government is at the moment, where our health services are absolutely atrocious and appalling. If they had managed their financials much better then they would be providing better services to the people of the Riverina, which is honestly getting a service that is secondary to the city people with respect to public health services that are run by the New South Wales state Labor government.

What we have now is this ROCS cover, which will simplify the administration of the scheme. Many insurers and medical practitioners raised concerns. Some of the provisions of the bill extend beyond ROCS. Apart from those clarifying abbreviations, these include a relaxation of penalty provisions in relation to compulsory offers of retroactive cover and the fact that doctors who accept such an offer no longer have to respond in writing but those who refuse will. This will ensure that no doctor misses out on retroactive cover by accident. We are very aware of exactly what the predicaments are and the concerns and conditions are for these practitioners.

This bill demonstrates the ongoing commitment of the government to the medical indemnity industry, doctors and their patients and to ensuring that medical indemnity insurance continues to operate viably, fairly and efficiently for the benefit of the industry, the doctors, the patients and, No. 1, the taxpayers.

I would like to pay particular tribute to those doctors and professionals in my electorate, particularly doctors such as Gerard Carroll, John Currie, Henry Hicks, David Stewart and David Littlejohn, Richard Harrison and others, who have come to me with the concerns of the local professionals. They have been willing to sit around the table, not just to bring the problems to the member but to try to bring some sensible suggestions as to how the government might resolve these issues. Their assistance in being able to deliver some sensible outline has been very much appreciated.

I would like to take the opportunity to pay tribute to the fabulous medical workforce and those professionals in my electorate of Riverina. Their commitment to the people across the Riverina is absolutely unconditional. How fortunate we are to have these young professional men and women who have undertaken to deliver our health services and to set up practice in a regional area to provide rural people with the same level of health services as one might get in the city. In fact, I would go so far as to say that we are probably providing better health services through those very dedicated professionals.

I would like to close by thanking the Minister for Health and Ageing, the Hon. Tony Abbott, for whom I have the absolutely highest regard, particularly in this area. This was a difficult area to resolve. It was an emotionally charged area, with more good ideas coming forward than ever before—but they were short in practical application. The minister was able to surf his way through all of the issues, sideline the things that were just emotive hype, cut to the chase to get to the real crux of the problem and then provide the assistance that was required in order to resolve it. So I think that the minister should be supported in this bill.

Pat Farmer (Macarthur, Liberal Party, Parliamentary Secretary to the Minister for Education, Science and Training) Share this | Link to this | Hansard source

In summing up the second reading debate on the Medical Indemnity Legislation Amendment Bill 2005 I first of all thank the member for Riverina for her very good contribution to the speeches made about this bill here today. She pointed out a very important point, and that is that we can only amend things for the future and make a good system even better through good fiscal policy—and that has been achieved by the Howard government placing itself in a position where it can support the doctors and support changes to this bill as far as indemnity is concerned.

I would also like to thank the members opposite for speaking on this bill. I note that there is no opposition to this bill and that there has been total support. It is sensible that this is so because it is a bill that will make a difference to a lot of people’s lives—in particular the patients and the doctors who are involved.

The bill is intended to increase the level of certainty around the provision of run-off cover for doctors who have left the medical workforce, and to simplify the administration of the scheme, following concerns raised by the medical indemnity insurers and medical practitioners. The principal change concerns doctors who, for various reasons, may have left gaps in their medical indemnity cover during their careers.

The legislation before us here today will make the system simpler to administer for the medical indemnity insurers and eliminate any uncertainty for doctors about their eligibility for ROCS—the Run-off Cover Scheme—which may arise out of the limitations of historical records of indemnity cover. This shows that the government is continually monitoring and updating the medical system to improve outcomes for all Australians. This legislation further refines the government’s medical indemnity package, which demonstrates the government’s continued commitment to the viability of the medical indemnity insurance for doctors and patients. The government has continued to work closely with doctors and insurers to insure the ongoing effectiveness of medical indemnity schemes.

These changes enable the Run-off Cover Scheme to provide cover for doctors equivalent to that provided under the last policy a doctor had before becoming eligible. This provides more certainty for doctors than the previous requirement that they have cover at the time of the incident, and simplifies the administration of the scheme by aligning it with the current industry practice.

These refinements will help insurers to work more effectively with the government in implementing the medical indemnity reforms. This is good news for doctors and certainly good news for their patients, and it is a great example of how the Howard government’s commitment is making a good medical system even better.

Question agreed to.

Bill read a second time.

Message from the Governor-General recommending appropriation announced.

Ordered that this bill be reported to the House without amendment.