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Tuesday, 30 April, 2002, 09:59 GMT 10:59 UK
Australian doctors down tools
Woman in early stages of childbirth
High-risk areas such as obstetrics are affected
test hello test
By Andrew Webster
In Melbourne
Australia's health system is in chaos, with many doctors closing their doors and surgeons cancelling operations, after the country's largest medical insurer announced it was calling in the liquidators.

Australia's biggest medical insurer
UMP covers about 32,000 doctors - 60% of the national total
It estimates it has more than A$450m in claims yet to be settled, which it cannot meet
The typical annual premium for a neurosurgeon or obstetrician is A$100,000
The Australian Medical Association (AMA) says the country's health system faces a potential catastrophe unless the government acts to protect doctors insured with industry giant United Medical Protection (UMP).

Australian GPs and specialists cannot practise without medical indemnity insurance, although treatment in public hospitals is covered by state governments.

UMP covers about 60% of Australia's doctors, mainly in the states of News South Wales and Queensland.

Australian Prime Minister John Howard has responded to the crisis by announcing the government will provide doctors with an "iron-clad guarantee" for all negligence claims arising from treatment until 30 June.

Mixed message

But doctors remain confused because of doubts over whether the current administration can commit future governments to honour its promises - litigation often only arises many years after the original treatment.

The Royal Australasian College of Surgeons of Surgeons on Tuesday advised its members not to work until the situation was clarified.

But the GPs' umbrella organisation, the Royal Australian College of General Practitioners, said it accepted Mr Howard's guarantee and there was no reason for its members to "down tools".

AMA president Kerryn Phelps said it was impossible to give general advice to doctors.

"The government has to act swiftly to put in legislation to guarantee their guarantee," she said.

That assurance seemed to have been delivered after a meeting late on Tuesday evening between ministers and the AMA - representatives said they now accepted the government's guarantee.

Operations cancelled

Surgeons in some major New South Wales hospitals - where UMP insures 90% of doctors - on Tuesday called a halt to all private work except for emergency procedures. And obstetricians in Queensland have also been withdrawing their services.

The prime minister has blamed the insurance crisis on the 'litigious mentality of the Australian community'

The nature of their work makes obstetricians and neurosurgeons particularly vulnerable to being sued - many say they fear they will soon be driven out of business. Annual insurance premiums for surgeons are typically around A$100,000 (37,000).

The government says its action should provide a breathing space for practitioners to arrange alternative cover while long-term solutions are explored.

But there are serious doubts as to whether other, much smaller medical indemnity insurers, have the capacity to take UMP's 32,000 customers.

Australia's medical negligence bills have soared in recent years as courts have awarded multi-million dollar damages. In one case a 22-year-old woman won A$15m (5.5m) for severe disabilities caused at birth by a botched forceps delivery.

UMP estimates it has more than A$450m (165m) of future claims it cannot meet, although some observers say that figure could be much higher. If UMP goes bust it is unclear what will happen to these claims.

The prime minister has blamed the insurance crisis on the "litigious mentality of the Australian community". He has said states should consider measures to curtail claims.

He told the Channel Nine network: "We can't have an unlimited right to sue, yet complain if doctors are not available because they can't afford the premiums."

Other measures being suggested include:

  • A special nationwide levy on doctors - opposed by the medical profession and discounted on Tuesday by Mr Howard.

  • Higher, more realistic insurance premiums, which will most likely be passed on to patients in the form of higher charges.

  • A national fund to pay for care of catastrophically injured patients.

  • Tax breaks to encourage plaintiffs to take staggered payments rather than lump-sum awards.

Opposition politicians and health professionals say the insurance crisis has been looming for some time but the government has failed to take adequate action.

Acting Labor opposition leader Jenny Macklin said: "The government has known for months and months about this problem and done nothing about it."

The BBC's Dominic Hughes
"UMP great problem was that it didn't increase its premiums and now finds it doesn't have the back-up to meet claims."
See also:

09 Mar 01 | Asia-Pacific
Organ scandal hits Australia
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