State-Backed Indemnity: Beyond the point of no return

Speeding Towards A Cliff Edge At 100mph With No Brakes; Is State Indemnity Beyond The Point Of No-Return? Tristan Lennox-Gentle, Director of MIAB explores this question further for Members.

Imagine the scenario, you can drive a car perfectly well, in fact you have been driving accident-free for 20 years. Then one day your best friend passes you the keys to their thirty ton lorry and asks you if you want to take it for a spin. Taking them up on the offer, you decide that the best way to enjoy the experience is to drive as fast as you can towards the sun, looking up and squinting, you see a cliff edge approaching. Not fully understanding the difference in stopping distances between cars and lorries, you wait to apply the brakes as if in a car, but the brakes don’t respond! The cliff looms closer. You think “surely this can only end one way and it won’t be pretty.”

Seems an implausible situation, right? However, in the context of state-backed indemnity this appears to be an analogy that could best fit the general mood of GPs and practices up and down the country. The government have run secondary care indemnity with some success for well over 20 years now, but through necessity of price and attrition of staff, they responded to pressure by proposing indemnity for the primary care sector. A bold announcement was made by Jeremy Hunt, the then Health Secretary, and to great fanfare the wheels of government whirred in to motion. Nearly two years on, the Government maintains its stance that state indemnity will launch as planned to the primary care masses in April 2019, alleviating once and for all the financial millstone that indemnity costs represent to a GP.

Of course, there is a bold hope that in spite of the Government’s relative inexperience in primary care indemnity, the scheme will meet the expectations and requirements of primary care clinicians. Perhaps it is a misapprehension that mastering secondary care indemnity is the same as mastering primary care? Akin to the opening analogy, driving a car is not the same as driving a lorry; they may both have wheels and an engine, but they require different skills to handle them competently.

Nonetheless, an almost-immediate response by the MDU saw the launch of their transitional benefits; an interim scheme at a much lower cost than before, so confident was the feeling of the Government making good on their intentions.

As we hurtle towards launch, the government remains confident that everything will come together, and on time. However the stakeholders in this equation could not be more polarised than they are right now. GPs want a fully funded scheme with new money, Secretary of State for Health and Social Care, Matt Hancock has hinted to Pulse recently that no new funding will be made available for indemnity and previous press releases from the Department of Health and Social Care have also posturised this as the favoured outcome.

In addition, defence organisations have yet to agree the terms of a ‘transfer in’ of past liabilities; in the case of state indemnity, claims arising from work undertaken pre-1st April 2019. Aspects of cover such as fitness to practice, coroner’s court attendance and private work remain excluded and in extremis clinicians may be forced to maintain separate policies in run-off, at additional cost, due to transitional arrangements and claims made contracts not being considered by a state-backed scheme.

On this basis, those expecting certainty may find that they need to maintain transitional cover arrangements, even after the state backed scheme launches. Those on claims made contracts of insurance, including distressed GPs and allied healthcare professionals, will also need to keep an eye on developments to avoid being left uninsured for past works.

Rather than being an efficient cover-all, the state-backed scheme appears to require more thought, consideration and negotiation to placate as many parties as possible and to avoid a clinician requiring a range of separate indemnities.

While it is desirable to launch a state-backed scheme, could it be considered foolhardy to do so without the support of the majority of GPs? A glance over industry forums notes a high degree of both expectation and trepidation as April draws nearer. Some have commented on the ramifications of making changes to the core contract; that GPs would retire, walk out or simply hand back the contract. Others have claimed that Peter is being robbed to pay Paul. Could it be that a state-backed solution would actually damage GP numbers rather than enhance them? On the basis of general feeling, it appears so, but only time will tell.
The government should be encouraged to listen to its most valuable resource; its people, as their support to the scheme and its success is critical. If absolutely necessary, would it be prudent to extend the state-backed scheme consultation to permit further engagement and planning? While the demand for an alternative to the current indemnity options is clearly high, it could be considered prudent to launch only once there is a clear consensus among the majority, and in the worst case is no deal better than a bad deal? Would stakeholders prefer honesty; that it is not possible to reconcile divisions between involved parties and that the approach should instead be to regulate defence organisations?
Without action, will the 1st April be D-Day for many GPs? Once the detail is known and numbers are crunched, will state-backed indemnity prove to be the cost effective solution it is intended to be or will it compromise practices’ finances further? With so little detail known about the scheme, it begs the question “before we get too close to the cliff edge, is it time to slam on the brakes?”

Our approved supplier, MIAB, can assist members with advice about new indemnity products as well as their range of other insurance products – visit their supplier page for more information.

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