ANNUAL REPORT 2015

Dear Member,

‘Greetings’ from MDM.

For year 2016 there will be no increase in the annual subscription rates.

Messrs P. S. Ranjan & Co. has withdrawn from the panel of MDM’s solicitors effective 1^st July 2015. A notice to this effect was sent to each member by snail mail and email. We understand not every member received it. Enclosed is a copy of that notice.

MDM Bhd always had a panel of at least two legal firms on its panel to enable members to have a choice. We have appointed Messrs Fernandez & Selvarajah of Petaling Jaya as the second legal firm.

The local litigation scenario is getting acute. This has been escalating through the years since MDM Bhd’s inception. In 2004, the court award for a brain damaged child was RM 800,000 plus interest, and legal costs of RM200,000/-, and the court award for a quadriplegic young man was RM 1 million plus interest and legal costs of Rm 200,000. The court awards increased in year 2007, 2008 and 2012. This year 2015, a court awarded RM 4.9 million for a brain damaged child!

Hence a foreign based medical defence organisation (M.D.O) has ceased taking membership of obstetrician on occurrence based and it is offering membership on claim based. Effective 2015 MDM has ceased taking obstetrician members.

Why is the litigation rate escalating? There are many reasons. In the last few decades there has been a tremendous “mushrooming” of private medical centres and private medical schools. Both these institutions are business orientated. The bottom line is profit. Because of the quality of medical care provided by the centres and the doctors do not meet the expectations of the patients for the ‘exorbitant’ fees charged or their insurance cover has been exhausted, they sue to seek financial gains. They are more likely to succeed today because the litigation scenario has changed. Experienced medical litigation lawyers find it more lucrative to act for patients than for doctors. With the adoption of “Rogers Whitaker’’ doctors must be more vigilant in taking INFORMED CONSENT to explain the risks of a procedure.

The statute period is six years for all doctors except the obstetricians. The obstetrician who delivers a brain damaged child can be sued 25 years after the incident! Even at six years statue no insurance company is prepared to provide occurrence based cover. Since its inception MDM Bhd has raised its subscription on six occasions to ensure members are fully funded when they have a claim.

In the 21^st century providing occurrence based cover is definitely untenable. An M.D.O. when inadequately funded to defend the claims will have to make “call’’ on its members! We do not want this to occur.

Insurance companies are keen to provide claim based cover. There are advantages and disadvantages in this category of indemnity. The advantages are many. Firstly, the premium will be cheaper than your M.D.O’s subscription. There will be tremendous savings. One can choose how much premium one wants to pay for the sum insured. This will definitely benefit the low risk specialists.

This disadvantage is that a doctor has to continue to buy indemnity for six years after the retirement with the exception of obstetricians. The latter have to have indemnity for 25 years!

Another disadvantage is the ‘non-claims’ (seeking advice on medical reports, receiving letter of demand, handling difficult patients) will not be provided.

MDM has been around for 14 years and we have been successful so far. The scenario is changing and it cannot function with the current subscription rates. The members will be burdened with a massive increase in subscriptions if we are to continue as occurrence- based, with the current court awards.

MDM Bhd is exploring how to continue providing indemnity to its members on a sound financial basis. We will keep members informed in due course.

`Happy New Year’.

Medical Defence Malaysia Berhad

Tan Sri Dato' Abu Bakar Suleiman
Chairman
Medical Defence Malaysia Berhad