The Medical Defence Union has defended its decision to move to a transitional indemnity product whilst the Department of Health finalises the details of its state-backed scheme.
In a response to a DH communication saying its new ‘half-price’ indemnity offer will leave GPs liable to future costs, the indemnity provider said its Transitional Benefits scheme was ‘launched not a moment to soon’.
The MDU said it decided upon the new product, which was criticised for not including run-off cover during the period up until the DH scheme is implemented, ‘because GPs simply cannot afford to pay any more for indemnity’.
The MDU said it was ‘able to reassure its GP members’ that its new product meets GMC requirements for indemnity cover and that members who remain with the MDU will ‘remain as secure as members of any other MDO’.
The organisation also said it had been ‘very clear and transparent in all the information we have provided to members’ who are coming onto the new scheme, and that members who stay with the MDU until they retire will not have to pay a separate fee for transitional run-off cover.
The statement said the defence organisation is of the opinion that unaffordable GP indemnity ‘is not a problem of their making and we don’t think GPs should foot the bill’.
According to the MDU, the options were to continue with the ‘occurence’ model of indemnity cover (operated to date, and still used by other MDOs) or to move to a transitional product based on the Government’s promise that it will cover the cost of indemnity for GPs in future.
But it said that in order to stay with the occurrence type of cover it would have to incorporate into subscription fees the impact of the Government’s decision to reduce the discount rate in a manner that will significantly increase the cost of claims payouts – a price increase GPs cannot afford.
The MDU’s statement said that it ‘had to take action to ensure that our GP members could afford indemnity and that claims would be correctly funded pending the introduction of a state-backed scheme’.
It concluded: ‘The MDU’s transitional benefits provide an excellent basis now from which to deliver a solution to the problem posed by the Lord Chancellor’s decision on the discount rate and the current uncertainty over the introduction of a state-backed indemnity scheme for GPs.’