Australian bariatric surgery under threat due to soaring insurance costs

An alarming number of Australian bariatric surgeons are considering shutting their clinics because of skyrocketing insurance costs and growing malpractice claims. A survey by the University of Notre Dame Australia, Flinders University and the Australian and New Zealand Metabolic and Obesity Surgical Society found 37 per cent of bariatric surgeons were considering quitting the practice because of soaring indemnity insurance premiums.

The survey found professional indemnity insurance premiums had risen by 35 per cent in the past year, with an average annual cost of about AUS$70,000. Some surgeons were paying up to AUS$500,000 per year. Notre Dame researcher and bariatric surgeon, Associate Professor Nicholas Williams, a co-author of the study, explained insurance costs were driving surgeons out of the industry and reducing access to a life-saving treatment. This was particularly the case in rural and regional areas and Indigenous communities, where rates of clinically severe obesity were higher and specialists were harder to access.

Nicholas Williams (Credit: University of Notre Dame Australia)

“Obesity is probably the most important public health issue of our time. New medications such as Ozempic will be a big part of the future landscape of obesity care, but surgery is still the gold standard because the medications are expensive, they are hard to access and they need to be taken lifelong, which is often not appreciated,” Williams said.

In Australia, 97 per cent of bariatric surgery operations are performed in the private sector, and private surgeons must have professional indemnity insurance (PII) to practice.

To gain an understanding of PII rates for metabolic bariatric surgeons and trends around malpractice claims in Australia, a cross-sectional online survey was developed by the Medicolegal Subcommittee and Board of the Australian and New Zealand Metabolic and Obesity Surgical Society (ANZMOSS). This survey was distributed via email to all Australian-based surgical members of ANZMOSS in October 2023. A follow-up email was sent a month later to non-respondents.

The response rate to the survey was 52% (115/222). The mean reported annual cost (all costs in Australian dollars) of PII in 2022/23 was $51,748 ± $34,687 (range $4000–$230,000). The mean annual cost of PII in 2023/24 was $69,933 ± $60,181 (range $5500–$500,000). This represented an annual increase of 35%.

There was a total of 142 claims. Forty-one percent (47/115) of surgeons reported at least one metabolic bariatric-related malpractice claim in their career (range 1–20). Only 3/142 (2%) of claims came to trial. There were no documented cases where a court found for the plaintiff when professional negligence had been alleged against the surgeon. Seventy-two percent (34/47) of surgeons involved in claims were defendants where the expert on the standard of care was not a currently practicing metabolic bariatric surgeon.

The premium support scheme (PSS) provides a government subsidy to assist doctors with the cost of their PII. To be eligible for PSS, a doctor must have gross indemnity costs that are more than 7.5% of their gross private medical income. Sixty-two percent (71/115) of respondents were aware of the PSS to assist with the cost of PII. Forty-one percent (47/115) qualified for the PSS, as their indemnity insurance was more than 7.5% of gross private medical income.

Ten percent (11/115) of respondent surgeons' insurers forced a change to how they delivered metabolic bariatric care. Three out of one hundred and fifteen (3%) respondents had already ceased performing metabolic bariatric surgery due to the cost of PII. Thirty-seven percent (43/115) were considering ceasing metabolic bariatric surgery due to the financial burden of PII.

Inexperienced surgeons who are just starting out in their metabolic bariatric career have been subjected to a 43% increase with a history of claims unlikely. The study’s authors said this significant upfront financial burden will act as a disincentive for surgeons wanting to enter the subspecialty of metabolic bariatric surgery.

The authors also found that PII rates increase when the metabolic bariatric surgeon is working solo, with or without a multidisciplinary team. This implies that medical defence organisations are taking into consideration how surgeons manage their clinic when determining levels of PII.

The prevalence of clinically severe obesity is greater in the rural community in Australia and as a result, rural metabolic bariatric surgical services are invaluable. The rural metabolic bariatric surgeon is subject to a greater amount of PII and has seen a greater increase in the last 12 months compared with city colleagues. The outcome will be closure of existing clinics, leading to further access issues for those patients most in need.

“Obesity disproportionately affects lower socio-economic groups, regional and remote communities and Indigenous populations,” Williams added. “These are the patients with the greatest need for access to obesity care, and if surgeries are not available publicly then we at least need them to be available as cost effectively and as widely as possible in the private sector.”

MDOs have reported a doubling in civil claims frequency for metabolic bariatric surgeons with upward pressure on premiums as a result. The authors believe the reason for this increase is the ‘no win, no fee’ legal approach. This system has merits as it enables patients with reduced means to access legal redress if needed. Nevertheless, it does encourage the pursuit of claims that are often frivolous and without merit. The tendency for MDOs to settle rather than defend unwarranted claims leads to further claims and on it continues.

Williams said he believed law reform was needed to discourage opportunistic litigation and fix what he described as a “broken” medical negligence system.

The authors said that potential solutions include state-based tort reform with caps on damages and contingency fees. A closed claims registry should be established with contributions from all MDOs as this would give surgeons a better understanding of the causes of malpractice claims, with subsequent quality improvement possible.

The findings were reported in the paper, ‘Professional indemnity insurance rates for metabolic bariatric surgeons in Australia: survey results’, ANZ Journal of Surgery. To access this paper, please click here