Andrew Laming (Bowman, Liberal Party) Share this | Hansard source

Another strong supporter of these amendments for midwives—and it follows two decades of law reform both at the Commonwealth level, in indemnity, and through state tort law reforms for what was an escalating crisis 20 years ago. I found myself flying over the Gulf of Carpentaria when one of the largest medical indemnifiers collapsed in 2001. We landed, with the health minister, and we picked the phone up and discovered that we had an indemnity crisis that had been predicted by doctors. Government at the time had been slow to respond, mostly because there was some shifting of blame as to whether state or Commonwealth law reform was required. It was recognised that New South Wales was probably the worst jurisdiction in the world for medical litigation. That tort law reform in that state came far too late and was very much something that the rest of the nation was waiting for.

There's a bit of a story behind that for midwives. While we've seen plenty of lip service for midwives, it was during the Labor administration that there was insufficient evidence to protect homebirth midwives, and legislation that was passed put those midwives at significant risk. This side of the chamber fought very hard, in opposition, to ensure that that coverage occurred and that there was a victory. But today's not a day for pointing out what the other side of politics may or may not have done. That was done a little bit earlier, by an earlier speaker, a former president of the ACTU. In essence, Australia has a very good record of having made changes to medical indemnity for both doctors and nurses, and today is about fixing up some minor anomalies in the legislation. It was always intended to cover midwives and now will, as a result of the passage of this bill tonight.

But I want to spend a little bit of time just to make very clear the history of reforms, back in 2001 through to 2004, involving Kay Paterson, Helen Coonan and of course Prime Minister John Howard. The reason it's important is that those very same models not only have stood the test of time but now are being applied to midwives in this country. Australia had these unique challenges, which I'd like to run through very briefly, because doctors two decades ago faced the same concerns that midwives would today about inadequate coverage—a concern that obviously the insurers of doctors two decades did not capture, under AHPRA; they were basically mutuals, making their own rules, setting their own premia and reluctant to increase those premia, because they wanted to make sure they kept their customers. There was a time there to set up a medico-legal committee to make some of those tougher decisions.

Australia was witnessing, in the nineties, an increase in medical litigation. We could see the problem coming. It was like a train coming down the tracks. Prior to that, at the time of my graduation and in the late eighties, it wasn't a big issue for doctors; it wasn't seen as a major concern. But the failure to appropriately price in the changes to premia created an emerging gulf. So, the collapse of United was obviously expected to occur at one stage or another. The HIH collapse that came a couple of years later further compounded it because of the reinsurance model that involved other insurers.

A claims-incurred basis represented about three-quarters of the challenge here and hadn't been reported. So, Australia had to set up an exceptional-claims scheme, a high-cost claims scheme, an incurred-but-not-reported scheme and a run-off-cover scheme. And, as has been pointed out by a previous member on my side who's also a medical specialist, there was this invidious situation whereby, as you were winding down your practice, you simply couldn't earn enough money to pay your own indemnity cover. That is a big problem, because many of the cases that come before an insurer could be well after you've retired. This 'tail' that we talk about in indemnity is utterly important to cover as well.

At the time, there was an indemnity review. I remember the work of Kay Paterson in particular. I remember the work of the chief of staff and the senior advisers in this space, getting advice from the doctors as much as from insurance experts in Helen Coonan's area about how to design a solution. At the time, as I recall, UMP was insuring about 90 per cent of New South Wales doctors. This explosion in claims was a massive concern, and there was frustration that New South Wales wasn't taking the tort law response seriously enough to put some caps on these claims, which were increasingly viewed within the community as utterly ridiculous.

The IBNRs were contributing to this crisis. We could see that there was a devastating effect on medical confidence and the willingness to even continue practices. There was a case with UNP where, when they asked—to survive—their members to pay a year of premia in advance to keep some liquidity in their system, many members simply refused to pay and walked, which further compounded the situation. This is a classic example where the only solution is for government to move in and fix what effectively is a genuine failure in the market. Things took a turn for the worse, as I said, when we also lost HIH. As an early provider myself around the year 2004, it was so encouraging to know that, after a certain threshold, a certain percentage of your annual income, any further premia were covered—80 per cent of them—by the government. These same mechanisms will be there for midwives.

Of course, midwives operate in an even more fraught environment. Not all of them are employed in the public sector. Many do work in the Aboriginal community controlled sector. To them, I say: this legislation is for you. We want to make it possible that, in this large and dispersed nation, if you are in the care of an Aboriginal community controlled service and choose to have your baby on country, we can provide the most highly trained midwives with full confidence that they will have their medical indemnity up to date and effective. That's important, and it should be available to all endorsed midwives, irrespective of their employment status—and that is very important as well.

In conclusion, there were always, I think, very, very good intentions with this legislation. A very small anomaly has been identified that does get closed with this legislation. But, for every reason, both sides of this chamber can say to the nation that these laws provide the coverage that midwives deserve.

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