Wednesday, 16 October 2019
Medical and Midwife Indemnity Legislation Amendment Bill 2019; Second Reading
I was reminded when preparing to speak today of the number of people in my electorate who have contacted me over recent years with a great passion for midwifery—midwives, who were looking at ways to improve indemnity for themselves and create more choice for mothers; and mothers, who were looking for homebirths or stronger relationships with midwives.
The area that we're talking about today, the indemnity of medical professionals, is one which has had bipartisan support for a long period of time. I'm going to talk a little bit about the history of medical indemnity, particularly since about the year 2000. I'm aware that the former health minister is sitting at the table down the front, so if a small piece of balled-up paper heads in my direction and you see it fly and hit me, it's because I've got something slightly wrong—or terribly wrong! I'm sure she'll correct me. Way back before 2010, there were no obligations for nurses or midwives to have professional indemnity insurance as a condition of their registration or practice. Indemnity insurance arrangements varied significantly. Midwives who were employed in public and private sectors were indemnified under their employer's insurance policies, usually as part of their employment relationships. Prior to 2001, midwives could purchase their own private indemnity insurance through membership of industrial and professional organisations, such as the Australian Nursing Federation and the Royal College of Nursing Australia. But in 2000-01 professional indemnity insurance coverage was withdrawn from midwives engaged in private practice, and this decision was considered to be in response to the perceived medical indemnity crisis of the late 1990s. Between 2001 and 2010, insurers did not offer professional indemnity insurance to midwives in private practice at all. Commonwealth medical indemnity laws, intended to ensure the affordability of professional indemnity cover across Australia, did not extend to midwives.
In 2002 Australia's largest medical indemnity insurer was placed in provisional liquidation. This liquidation would've left 60 per cent of medical providers without cover, meaning their patients may not have been compensated for medical negligence. In response, the Howard government established what is now known as the Indemnity Insurance Fund. The IIF is made up of seven separate schemes to promote stability in the medical indemnity insurance market and ensure affordable cover for private doctors and midwives. The Howard government's intention was to phase out the scheme over time as the medical indemnity insurance market was normalised. There were reviews in 2014 and 2016, and the government committed to the first principles review in the 2016 MYEFO, which also included savings of $36 million. But the review reported in 2018 and recommended that, in spite of John Howard's view that this would be phased out over time, it should actually be maintained. But, as I said earlier, midwives in private practice were not covered by that scheme.
In June 2008 the Rudd government undertook a national review of maternity services in Australia. The report, Improving maternity services in Australia: the report of the Maternity Services Review, was released in February 2009. It examined a range of issues, including the safety and quality of maternity services; women's access to a range of models of care; inequality of outcomes and access; information and support for women and their families; and financing arrangements. The review noted that there were a number of financial restraints on private service delivery by midwives, which acted as a barrier to increasing the range of models of maternity care available in Australia and therefore limited women's choice. Such constraints included the lack of access to professional indemnity insurance. The review examined the reasons for this, noting:
It is difficult for insurers to come up with a suitable premium for midwives because the provision of birthing services by privately practising midwives is perceived to be a high-risk activity. No adequate and reliable data is available to develop an accurate risk profile for privately practising midwives who provide birthing services. Accordingly, midwives operating privately in Australia who wish to provide the full range of maternity services are currently not able to do so with the protection of professional indemnity cover.
The review also found that, as a consequence, midwives providing support for birthing privately were doing so at their own financial risk, or, depending on the midwife's financial circumstances, the risk was being transferred to the client, who would have no recourse to compensation. It further found that a lack of professional indemnity cover was a barrier to the development of collaborative models of maternity care involving privately practising midwives. The report noted that the planned introduction of the health profession's National Registration and Accreditation Scheme would pose problems for privately practising midwives, who would not obtain the professional indemnity insurance required for registration under state and territory laws. It recommended that, while a risk profile for midwife professional indemnity insurance premiums is being developed, consideration be given to Commonwealth support to ensure that suitable professional indemnity insurance is available for appropriately qualified and skilled midwives operating in collaborative team-based models. Consideration would include both the period and the quantum of funding.
In response to the Maternity Services Review, the government announced a $120.5 million package of maternity measures in the 2009-10 budget. The measures included giving access to Medicare Benefits Schedule and Pharmaceutical Benefits Scheme benefits for certain services provided by midwives for the first time, as well as providing government supported professional indemnity insurance for midwives.
The laws that were introduced enabled the Commonwealth to meet part of the cost of large settlements or awards paid by eligible insurers that indemnify eligible midwives, including meeting the amounts by which such payments exceed the insurance contact limits, and to provide ongoing insurance for eligible midwives who have ceased private practice—remembering, of course, that claims can be made for past medical services, so the liability of a midwife does not cease when the midwife ceases to practice.
The Commonwealth has also moved to contract with an insurer to provide an affordable professional indemnity insurance product to certain midwives, and in May 2010 announced that this would be provided by Medical Insurance Group Australia. That insurance has been available through MIGA since 2010. However, as discussed previously and by previous speakers, this insurance did not cover the planned delivery of babies in the home.
Now we come to this bill, the Medical and Midwife Indemnity Legislation Amendment Bill 2019—which is a good bill and Labor supports it. This bill goes some way to addressing some problems in the current environment. The requirement that all indemnity insurers must provide cover to all providers who need it is particularly useful. At present, this universal cover obligation only applies to the four insurers who have contracts with the Commonwealth. So that's really a very good thing.
I would like to thank all the doctors, midwives, pharmacists and others who contributed to the review process under the current government and the outcomes that have been achieved, but there are still some gaps that this bill does not address. It does not address two major issues in midwifery indemnity insurance: firstly, the lack of choice in midwifery cover. There's only one provider for indemnity insurance for midwives, which means that there is no competition in the market—but it is great that there is one. Again, this is due to work done on both sides of the aisle in a bipartisan manner. Without the histrionics and fist-waving that sometimes surrounds policy areas, this one has been quietly worked on by both sides of government for a long time, and much of the work that has been done is really good. But there are always gaps and there are always ways to make improvements. The lack of competition isn't an easy one for any government to fix, but it is one that government should play a role in and have attention to fixing. I look forward to both sides of the House working to find solutions to that.
The other issue is that there is still no indemnity insurance at all for homebirths. While there's an exemption for holding that insurance, it is set to expire at the end of 2019, which creates massive uncertainty for midwives in relation to homebirths. And, again, it prevents some of those collaborative models that we might see grow if there were better protection for mothers and practitioners.
Labor's concern about these issues is consistent with our longstanding support for midwives. It is important to remember that the last Labor government added midwives to the National Registration and Accreditation Scheme and ensured that the regulation was on par with other medical professions, as of course it should be. We also gave midwives access to a range of Medicare and PBS items for the first time.
Those two weaknesses that I mentioned in the current law also create a third one, which is a lack of midwives. We are seeing around the country some major midwifery services closing because of a lack of midwives. Without certainty, without indemnity and without the protections that other healthcare professionals enjoy we will not see the growth in this sector that we should see. That would be a shame, because choice for mothers, alternative models and new approaches are welcome as long as they are undertaken with the appropriate safety protections in place.
This is a good bill, and I'm pleased to have spoken on it. It will do a number of good things. It will require all indemnity insurers to provide cover to all providers who need it. It will increase the maximum risk loading for providers with poor records to 200 per cent of average premiums and allow insurers to refuse cover in exceptional circumstances. It will establish a separate high-cost claim scheme for all allied health providers, including midwives. At present, there is a separate scheme for midwives but some pharmacists are inadvertently covered by the medical scheme. It will streamline the legislation that covers the schemes and it will require an actuarial assessment of the medical indemnity market to be tabled in parliament by February 2001. The bill's major provisions will take effect on 1 July 2020, following the tabling of detailed regulations on which the government is currently consulting widely.
I don't have anything more to add except to remark once again that it is good to see the quality of work that can be done in this House when governments and oppositions do not run at each other chest forward; when we work quietly through our committees and through consultation processes to get good results. There is still a way to go, but this is a step in the right direction.