Doctors’ insurance – Unhealthy mess born of bad business

If the current difficulties between the British-based Medical Defence Union (MDU) and the Department of Health are not resolved, it is the patients of this country who will ultimately suffer most.

They will essentially be hostages, while the health industry bureaucrats squabble amongst themselves.

No Government has been prepared to tackle the spiralling cost of insurance coverage, as a direct result of the epidemic of compensation claims being fuelled by our growing compo culture.

The latest problem came to a head after the Department of Health introduced a new method of insuring consultants at the beginning of February.

The MDU complained that the changes led to a serious drop in its business, with the result that it is no longer willing to fund the liabilities of up to 600 doctors that it insured in previous years.

To provide cover for those doctors, it would be necessary to charge premiums that would essentially be prohibitive, unless the Government provided some form of subsidy.

MDU chief executive Dr Michael Saunders argues that his organisation never saw itself as a conventional insurance company and it has only provided cover in a discretionary way; in which doctors had the right to ask for assistance, as well as the right to have that request considered, but are not automatically guaranteed cover in each and every situation.

The MDU has indicated that there is a question mark over the underwriting of compensation claims of a non-medical nature.

The MDU refused to indemnify Dr James Barry, who was sued by 39 patients for indecent and sexual assault.

He sued the MDU, but lost the case in the High Court in March of this year.

During the late 1990s, the MDU boasted of its financial prowess and, as late as the turn of the millennium, the organisation was bragging that it was in its strongest position for half a century.

Dr Saunders now admits that the MDU failed to appreciate the rise in the cost of settlement claims in the area of obstetrics and it is trying to get the Government to assume its liabilities.

This is public money and the Department of Health has quite rightly refused to assume those liabilities. It sees this crisis as a ploy to get the Exchequer, not only to underwrite part of the cost of insurance but also to assume liability for outstanding claims, which could see the Government assuming liability for as much as €400 million worth of claims.

Although that figure is disputed by the MDU, there is a very real possibility that the final amount could be even greater still if the State assumed liability.

The Irish Hospital Consultants Association contends that the MDU is engaged in a deliberate strategy to get out of the Irish market and renege on its obligation to Irish hospital consultants.

The Irish Medical Organisation has called on the department and the MDU to appoint an international insurance arbitrator as a matter of urgency, to assist in resolving the dispute.

Whatever the merits of the various arguments, there can be little doubt that the whole insurance issue was never put on a proper business footing.

It is an unhealthy mess.