The Commonwealth Government is conducting a First Principles Review of the medical indemnity schemes. The Government released a consultation paper calling for submissions by 13 October 2017.
Avant has made a submission strongly supporting the
continuation of these schemes. The schemes were introduced in the early 2000s
following the medical indemnity crisis and have helped to bring stability to
the indemnity system and premiums. Any reduction in medical indemnity schemes would have
the potential to impact how medical indemnity works and, in particular, what
premiums doctors pay.
In the early 2000s the Government introduced a suite of
reforms that brought stability to the medical indemnity sector which was in
crisis following the collapse of HIH and UMP. These included tort law reforms
and a series of schemes designed to maintain and provide premium affordability
Many of the schemes represent a societal support to doctors
and their patients. The schemes help ensure that patients are compensated in the
event of medical negligence and help manage financial volatility.
While some doctors lived and breathed the crisis and were
instrumental in bringing about a stable system, many others may not have the
same visibility of the schemes; a brief summary is below.
Government insurance schemes
Exceptional Claims Scheme (ECS)
The ECS is the Government's scheme to cover doctors for 100% of the cost of private practice claims that are above the limit of their medical indemnity contracts of insurance, so that doctors are not personally liable for very high claims. The scheme is fully funded by the Government. Doctors are not required to make a contribution.
Premium Support Scheme (PSS)
The PSS assists eligible doctors to meet the costs of their medical indemnity insurance where a doctor's gross medical indemnity costs exceed a percentage of their gross private medical income.
High Cost Claims Scheme (HCCS)
The HCCS reimburses medical indemnity insurers 50% of the insurance payout over $300,000 up to the limit of the practitioner's cover, for claims notified on or after 1 January 2004. From 1 July 2018 the threshold increases from $300,000 to $500,000.
Run-off Cover Scheme (ROCS)
The ROCS provides secure insurance for doctors who have left private practice. It ensures that eligible doctors have medical indemnity cover for incidents that might have occurred during their careers but had not been notified to insurers. The ongoing cost of ROCS will be met over time by a ROCS support payment paid by insurers.
Significant impact if
schemes were reduced
Indemnity schemes reduce the cost of medical indemnity
premiums, which in turn reduce costs for healthcare payers. Removing or
reducing the support provided by these schemes would lead to increased
healthcare costs, which would in turn have to be met by patients.
Medical indemnity has historically been volatile in
Australia and overseas, and this remains an ongoing risk. Introducing
uncertainty into this sector is counterproductive and if the schemes were
removed, it is not clear how the system would respond in the event of another
period of crisis.
schemes serving patients well
Avant’s position is that the medical indemnity schemes have
served the Australian community well. Doctors have been able to access medical
indemnity cover and there has been stability in premiums, which have both
helped to maintain patient access.
Submissions are now closed, thank you to all our members who provided feedback.
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