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BMJ. May 11, 2002; 324(7346): 1118.
PMCID: PMC1172160

Australia's public hospitals are under pressure as doctors transfer patients because of insurance crisis

Australia's surgeons and doctors have cautiously returned to work as the fallout from the collapse of the nation's largest medical defence organisation continued to unsettle both the profession and patients.

Operations were postponed as some doctors suspended services for private patients after United Medical Protection, which covers 90% of practitioners in New South Wales, called in a provisional liquidator.

Public hospitals face increased workloads as surgeons and GPs start transferring private patients to public beds to avoid being liable for malpractice claims, even after the federal government tried to assure them they were safe.

"That will put public hospitals under pressure, but this is the only way some people feel safe despite the government guarantee," said Dr Ken Mackey of the Rural Doctors Association.

The federal government has pledged to underwrite the company until 30 June, but the medical profession has faced doubts and delays over whether the assurances, which were made in the media, were safe in law.

"If they treat their patients as public patients, then that puts the legal situation beyond doubt," said the national president of the Royal Australasian College of Surgeons, Kingsley Faulkner.

Last Sunday 100 orthopaedic specialists in Sydney voted unanimously to continue treatment and signalled an easing of concerns about the government's guarantee. Neurosurgeons had already agreed to go back to work. But future insurance needs remain uncertain.

"June 30 is only two months' time, but we must have major reforms in the pipeline," said Dr Faulkner. "We need to know whether existing medical defence organisations can take on board enough of those with United Medical Protection, or whether United can be resurrected."

There are fears the 32 000 members of United Medical Protection, which represented 60% of doctors around the country, may have to pay an additional levy to cover an estimated A$450m (£165m; $243m; €265m) worth of unreported claims.

The Australian Medical Association's president, Dr Kerryn Phelps, warned: "The medical indemnity crisis is on pause—it is far from over."

She said there should be no call on members for extra premiums. "That would spark a major crisis, because doctors can't afford to pay them. Neurosurgeons and obstetricians can't afford an extra A$100 000. They would either stop work or have to massively jack up fees."

Federal health minister Kay Patterson said the guarantee provided breathing space to find out more about the financial condition of United Medical Protection and assist in a smooth transition to future insurance cover.

Prime minister John Howard has called for reforms in the insurance industry and said that insurance claimants should lower their sights and curb expectations of huge cash payouts.

"We cannot go on imagining that you can sue at the drop of a hat, yet complain if doctors are not readily available because they cannot afford to pay the increasing premiums," he said.    


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