Aussie MDs' malpractice coverage in turmoil

Less than a week after stating that it would not help the ailing United Medical Protection (UMP), the Australian government announced interim plans to prop up the country's largest medical malpractice insurer.

UMP, which provides malpractice insurance for more than 60% of the country's doctors, was on the verge of collapse after a jump in the number of claims.

It needed an immediate cash infusion of Aus$30 million when its Board of Directors applied to place the company under provisional liquidation in April. That move immediately put coverage for thousands of physicians into insurance limbo.

Following a massive withdrawal of services by specialists and some very public cries of outrage from the Australian Medical Association (AMA) and the New South Wales minister of health, the federal government reversed its earlier decision.

The deal guaranteed coverage for claims made against UMP-insured doctors between Apr. 29 (when the state liquidator's assistance was requested) and June 30.

The new plan does not address the contentious issue of claims still before the courts or claims that may be brought in the future. Nor does it address the spiralling size of malpractice settlements being awarded by Australian courts — one 23-year-old woman was recently awarded Aus$15 million for events that occurred when she was born.

AMA President Kerryn Phillips says that the government's guarantee provides some short-term certainty for the country's 30 000 doctors, but says the crisis is only “on pause.”

Both the AMA and the Royal Australasian College of Surgeons (RACS) plan to continue lobbying the government.

The joint statement by the government and AMA makes clear that the collapse of UMP may be inevitable, and if this happens other insurers will have to be found. The government has appointed a liquidator and task force to look at the company's future and the issue of sustainable malpractice insurance.

Commercial insurers have been approached by the government and have indicated a willingness to enter the market if they can be assured they are responsible only for claims made as a result of incidents occurring after their entry. They also want coverage limits set and want state and territorial governments to make changes to tort law to reduce costs.

Alternatives have been offered. RACS President Kingsley Faulkner suggests that doctors fund and run their own collective, as is done with the Canadian Medical Protective Association. “We believe there should be an establishment of a common insurance pool administered by the government, with the premiums coming from the doctors,” he says. — Jennifer Crump, Smooth Rock Falls, Ont.