Health care and income protection for all

Health care and income protection for all

The collapse is just one indication of a broader insurance crisis faced by the medical industry, most noticeable in climbing premiums for doctors.

In 2001 a doctor not carrying out seriously risky procedures was required to pay around $1000 a year to an insurance company in order to be covered if sued by a patient for negligence. Costs for doctors involved in delivering babies or major surgery paid more than $10,000.

Since then, however, these costs have increased dramatically: the base rate is $2500, and delivering babies would cost a doctor at least $100,000 in insurance.

While some specific factors — including the NSW government decision to cap pay-outs, which resulted in victims rushing into court before the new laws would take effect — helped the demise of UMP, the pressure on the industry is substantially caused by a decade-long rise in insurance pay-outs.

Most of the large pay-outs have been for children suffering injury at birth or problems associated with neurosurgery, which is the most difficult of surgical areas.

The government’s approach of capping pay-outs is disgraceful. Without these large sums of money, many victims of medical procedures gone wrong would not be able to pay their life-long medical bills.

But the current system is creating a farcical situation. In Florida there are no longer any obstetricians willing to be involved in the birth of children — forcing women with complicated pregnancies interstate. Obstetricians in the NSW South Coast last year refused to deliver babies in public hospitals until the state government agreed to help them pay their premiums.

Independent midwives are facing a tripling of indemnity insurance, and some states are facing a possible end to home-birthing services altogether.

These problems are caused by the current litigation-focused system, where patients can only get compensation, and thus money to pay medical bills and to live on if they cannot work, by suing the medical practitioner. To cover themselves against enormous pay-outs, health professionals must pay large sums to insurance agencies.

Most of the time, lawyers and insurance companies benefit out of the system, but both patients and doctors lose.

Patients are reliant upon “blaming” someone for their injury in order to get income protection. If the medical practitioner wasn’t at fault — they get nothing. There is a built in disincentive to appear healthy, as this may be used as evidence by the insurance company to cut of financial support.

Doctors practice defensively, and have an interest in covering up or seeking to minimise errors, to avoid litigation.

Patients and medical practitioners would be better off under a “no-fault” system, that did not link medical practitioner error to compensation pay-outs. Necessary treatment and income support for all injured patients should be guaranteed by the government, free education should be continuously offered to health professionals and health provision should be monitored and improved on a system-wide basis, with discipline of doctors used when necessary.

In New Zealand, midwives are state-employed on a no-fault system. A US private hospital adopting a no-fault approach — when a patient is hurt during a procedure, treatment is completed free — showed improved patient care and lower costs.

While in Australia, public-hospital doctors are insured by the government, the public health system is being eroded while the government, in effect, subsidises the private health insurance industry. This will get worse if the government does privatise the government-owned health insurance company, Medibank Private.

If the government stopped such subsidies, the savings could be used to expand public health services, creating salaried positions for health workers based in hospitals and in the community, as well as ensuring income protection for anyone unable to work due to health-care-related injury.

From Green Left Weekly, May 8, 2002.
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