Summ mary An nnual R Report 2011/1 12 Me edical Indemnity Protection S Society Ltd an nd its subsidia aries (Limiited by Guarantee and Shares) ABN N 64 007 067 281
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Member benefits As a member organisation, MIPS is committed to providing a range of benefits to members to meet their needs in accordance with the MIPS constitution. MIPS Protections
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MIPS Members’ Medical Indemnity Insurance Policy
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MIPS Members’ Practice Entity Policy*
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MIPS Members’ Group Personal Accident Policy*
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Medico-legal advice (24/7 advice helpline)
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Risk management workshops & advice
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Medico-legal seminars and training
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Online risk management modules
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Range of Club MIPS member benefits
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MIPS review and MIPS student review
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* These membership benefits do not apply to Student Membership Categories
Medico-legal advice and claims assistance One of the many facets of MIPS that makes MIPS different is that all MIPS medico-legal advisors and claims file managers are experienced, senior, medical or dental practitioners. All MIPS medico-legal advisors and claims file managers have substantial experience in clinical practice and this expertise is brought to the fore in the advice and assistance they provide to members in need. Their professional specialties include: general practice, obstetrics / gynaecology, anaesthetics, orthopaedic surgery, general surgery, internal medicine, pain management, general dentistry, endodontics and prosthodontics. During the 2011/12 membership year, MIPS received just under 4,000 new contacts from members seeking advice, solace, assistance and support. Approximately 85% of these contacts related to non-liability matters such as advice on matters or incidents deemed not likely to give rise to a claim. Claims trends remain unchanged. The most significant claims by patients still relate to a failure and/or delay in diagnosis (principally breast and skin cancer) and delays in referral for investigation of suspicious bowel symptomatology. What makes the latter difficult to defend is if there is a failure to undertake a basic rectal examination at the time of presentation and delay or lack of priority in the referral for subsequent specialist investigation. The extent of access to MIPS comprehensive and flexible membership benefits is determined by the membership category selected by a member. MIPS continues to expand the benefits it provides members in anticipation of and/or response to developing needs while keeping associated paperwork to a necessary minimum. An on-going adverse trend is the number of claims arising from patients seen with presenting symptoms of cardiac origin where some basic diagnostic investigations are performed but a diagnosis is not made. Often in these cases, the ECG is unremarkable and troponin is in the normal range giving practitioners false confidence that other differential diagnoses should be explored. Unfortunately, in many cases the patient subsequently dies within days or weeks from ischaemic heart failure.
MIPS Summary M Annual Reportt 2011/12
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MIPS M C Chairm man’s report r t I am a pleased to reporrt that the MIPS Gro oup has co ompleted another ssuccessfull year further stren ngthening g the secu urity that M MIPS offerrs memberrs with a $$35 million n addition n to members s’ surplus increasin ng Membe r’s equity to $185 million. m In broad b terms, tthe continued strong financial performancce of the Grou up is due to; • • • •
Sig gnificantly bettter than expec cted claims exxpense. This re eflects better than t predictedd claims experrience of our me embers in relattion to the yea ar just ended a and prior yearrs reported cla aims Ab better than bud dgeted investm ment result de espite on-going difficult and volatile investtment market conditions Co ontinuing grow wth in member numbers On n-going attentio on to cost con ntrol.
The e 2011/12 yea ar results have e further advanced MIPS ob bjective of bein ng the pre-eminent “doctorss for doctors” medical m defen nce org ganisation in A Australia. MIPS S membership p is designed tto meet the ne eeds of memb bers and offerss a range of member m benefiits suc ch as medical indemnity inssurance, risk education e and 24 hour medico legal assistance provideed by health prrofessionals. Full dettails are conta ained in the me embership benefits handboo ok. MIP PS staff active ely advocate fo or the interestts of memberss’ by participatting on various s committees and working parties, p and th hey con ntribute submiissions to governments and d other professsional bodies to t further mem mbers’ interestts. MIP PS staff have also been acttive in preparin ng MIPS Insurrance for the introduction off a revised Ausstralian Prude ential Regulation Autthority (APRA A) prudential framework for Life L and Gene eral Insurers (L LAGIC). The LAGIC L reportinng regime bec comes effectivve from m 1 January 2 2013 and MIPS believes MIPS Insurance e is well preparred for its intro oduction. Folllowing a numb ber of new apppointments las st year the com mposition of the Board has rremained unch hanged during g the 2011/12 year. I thank my feellow MIPS dirrectors for the eir ass sistance and contributions ovver the year to o ensure we con ntinue to meet the objectivess of MIPS’ Constitution. I sh hould also like to congratulatte Mr Barry Gilbert, Chairman of MIPS M Insuranc ce, and his felllow directors for f their effective gov vernance of MIPS Insurancee during the ye ear. My thanks also go to the MIPS S Heads of Div visions and the eir nge stafff for their efforts and for succcessfully deliivering the ran of high h quality services to our m members.
R William W L Tu urner Cha airman
MIPS Managing Director and MIPS Insurance Chief Executives Officer's report I am pleased to report that the financial results for the MIPS Group to 30 June 2012 have further strengthened MIPS. They include: • • • •
$35 million increase in members’ surplus (net assets) to $185 million $68 million increase in total members’ assets to $395 million 5% increase in member numbers additional strengthening of MIPS Insurance solvency
The most significant factors contributing to the result were: •
• • •
Significantly better than expected claims expense. The better than anticipated claims experience of our members was seen particularly in relation to prior year claims where we were able to finalise a number of significant matters for much less than their reserved amount A better than budgeted investment result despite challenging and volatile investment conditions. The 2011/12 result continues MIPS track record of achieving a positive investment result each year Continuing growth in member numbers Sustained focus on containing the cost of operations.
MIPS exists to support its members and membership subscriptions are calculated from the ground up each year to ensure MIPS can continue to provide members with very high levels of security on an on-going stable and sustainable basis. Towards the end of the 2011/12 year MIPS considered the better than expected claims experience and anticipated increased levels of solvency, when setting MIPS 2012/13 membership subscription reference rates. Members will be aware that membership subscriptions are individually determined and reflect factors such as the exposure each member has to claims arising from their current and past practise including geographic locations of that practise. Reinsurance arrangements were further enhanced for 2011/12 and 2012/13. This further reduces the possible exposure of the MIPS Group to the effects of claims - especially infrequent but high value medical indemnity claims - and therefore decreases the potential for volatility in MIPS Group financial results. Through such mitigation MIPS is even better placed to provide high levels of financial security and stability for members. MIPS maintains a prudent claims reserving policy and has again chosen to reserve medical indemnity liabilities at a higher level of sufficiency than that required under the prudential standards of the Australian Prudential Regulation Authority. This decision by MIPS Insurance provides MIPS members with further confidence that their medical indemnity provider will be well capitalised over the long period required to finalise medical indemnity claims. MIPS exists to: • • • •
support and protect the character and interests of legally qualified health care practitioners and of persons legally entitled to practice medicine, surgery or a related health care discipline support and protect the character and interests of Members promote honourable and to discourage irregular practice consider, originate, promote and support, or oppose legislative or other measures affecting Members.
These objectives are documented in the MIPS Constitution and form the focus for what we do. During the year, in accordance with those Constitutional objectives, MIPS moved to protect members through decreasing the potential for adverse patient outcomes in respect of Naltrexone implants, non-TGA registered products and female genital surgery.
MIPS Summary M Annual Reportt 2011/12
MIP PS membersh hip is designed d to meet the needs of mem mbers. MIPS offers o a range of membershiip benefits suc ch as insurancce cov vers, risk educcation servicess, 24 hour medico legal asssistance (from expert clinicia an peers) as w well as a numb ber of other ben nefits. MIPS a also operates as a buying group g for mem mbers in respec ct of the medic cal indemnity,, practice entitty and persona al acc cident insuran nce master pollicies it purcha ases. Further d details of thes se and other membership m beenefits can be e found in the MIP PS Membersh hip Benefits bo ooklet includin ng product discclosure statem ments at mips.com.au. Gro owth Ov verall MIPS exxperienced an increase in to otal membersh hip (including students) s of ap pproximately 55.2% to bring total me embership num mbers as at 30 0 June 2012 to o over 34,000 . MIPS obligattions are to cu urrent memberrs. Therefore membership app plications are considered on n the basis of whether acce eptance will be enefit the mem mbership as a w at reason MIPS whole. For tha carrefully examines new memb ber application ns with a view that any new member shou uld bring no grreater risk exp posure than th he ave erage of curre ent MIPS mem mbers in the ap pplicants craft group. Representation and Advocacy PS continued its role of advvocacy in respect of matterss that affect me embers. Durin ng the year, M MIPS participatted in a numbe er MIP of working w partie es and committtees, including g: • • • •
Na ational E-Healtth Transition Authority A (NeH HTA) Op pen Disclosure e Advisory Gro oup Several Insurancce Council working parties i ncluding the Medical M Indem mnity Working Group and AP PRA liaison / AGIC working group g LA ational Injury In nsurance Sche eme discussio ons Na
MIP PS also contriibuted to a num mber of submissions, which h ensured thatt its views on matters m that m may affect mem mbers were hea ard. The mostt significant of the submissio ons during the e year were: • • • •
Wrritten and oral submissions to t the Senate Committee Review R of the Professional P S Services Revie ew (PSR) Scheme Re eview of the He ealth Services s (Conciliation and Review) Act Public Consultattion of the Med dical Board in respect of fun nding of extern nal doctors’ heealth programmes h Practitioner Regulation Ag gency (AHPRA A) in respect of o their consulltation on the definition d of Australian Health actice pra
MIP PS was also in nvolved in a number n of com mmunications w with governme ent in respect of the future oof Premium Su upport and Hig gh Cost Claims med dical indemnity schemes. Regulation PS manageme ent have been n involved in working w with MIP AP PRA at every sstage in the de evelopment of the revised pru udential framework for Life and a General In nsurers. The LAGIC reporting regime becom mes effective from 1 Januarry 201 13 and has the e potential to adversely affe ect costs throu ugh rev vised capital re equirements. We believe we w are well pre epared for the introduction of o the LAGIC refinements r an nd antticipate that th here will be minimal impact to t MIPS Ins surance capita al requirements on introduction. In summary, s MIP PS has continu ued to act in th he best interessts of its i members a and the 30 Jun ne 2012 MIPS Group resultss hav ve enhanced m materially the financial secu urity of MIPS a and furtther advanced d MIPS’ comm mitment to bein ng the preem minent “doctorss for doctors” medical m defen nce organisatio on in Australia. A
Drr. A Troy Bro owning Ma anaging Directtor and Chief Executive E Officer
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Medical Indemnity Protection Society Ltd and its subsidiaries Statement of comprehensive income For the year ended 30 June 2012 Group
Society
2012 $’000
2011 $’000
2012 $’000
2011 $’000
61,216
57,167
67,382
60,476
6,062
14,787
-
-
Investment result
14,755
14,978
5,229
3,757
Total income
82,033
86,932
72,611
64,233
(12,055)
(46,856)
-
-
(2,927)
(2,873)
(40,825)
(39,669)
Other operating expenses
(13,141)
(12,800)
(13,228)
(12,867)
Outwards reinsurance premium expense
(13,480)
(5,713)
-
-
2,656
2,107
2,502
1,916
(1,769)
(1,849)
-
-
(40,716)
(67,984)
(51,551)
(50,620)
Profit before income tax
41,317
18,948
21,060
13,613
Income tax (expense)/benefit
(6,243)
(1,697)
(220)
(141)
Profit for the year
35,074
17,251
20,840
13,472
(696)
614
(696)
614
209
(184)
209
(184)
(487)
430
(487)
430
34,587
17,681
20,353
13,902
Operating income Reinsurance and other recoveries revenue
Claims expense Master policy expenses
Indemnification benefit/(expenses) Insurance levy Total expenses
Net fair value gains on available for sale financial assets Income tax on items of other comprehensive income Other comprehensive income, net of tax Total comprehensive income for the year
MIPS Summary M Annual Reportt 2011/12
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Medical In ndemnity y Protecttion Sociiety Ltd and a its subsidiarries on Sttatement of financcial positio As at 30 June 2 2012 Group G
Society
2012 $’00 00
20111 $’0000
20 012 $’0 000
2011 $’000
Cash and cash eq quivalents
51,55 52
34,9992
37,6 660
15,,074
Receivables
23,45 55
7,6775
29,9 900
8,,819
Investments
192,24 43
180,2222
54,7 749
55,,555
6,24 49
8,8227
9
2,,153
26,97 74
3,9 12
32,8 846
10,,540
300,47 73
235,6228
155,1 164
92,,141
Investments
56,86 67
56,5 12
17,9 988
15,,774
Reinsurance and other recoveries receivable
35,92 24
32,8887
2,4 473
3,,516
53 39
6991
465 4
588
-
-
6,5 508
6,,508
1,67 74
1,3226
-
-
95,00 04
91,4 16
27,4 434
26,,386
395,47 77
327,0444
182,5 598
118,,527
31,17 78
5,3556
36,8 808
2,,937
4,00 08
2991
-
-
Outstanding claim ms liability
18,72 26
17,9 10
-
-
Oth her liabilities
50,15 53
34,3 14
50,1 153
34,,314
67 77
2,5990
677 6
2,,590
104,74 42
60,4661
87,6 638
39,,841
95,63 32
102,3665
-
-
9,74 47
13,4449
3,2 244
7,,155
-
-
385 3
553
Tottal non-curren nt liabilities
105,37 79
115,8 14
3,6 629
7,,708
Tottal liabilities
210,12 21
176,2775
91,2 267
47,,549
Nett assets
185,35 56
150,7669
91,3 331
70,,978
10 00
1000
100 1
100
1,15 51
1,6338
1,1 151
1,,638
Rettained profits
184,10 05
149,0331
90,0 080
69,,240
Tottal equity
185,35 56
150,7669
91,3 331
70,,978
Current assets
Reinsurance and other recoveries receivable her assets Oth Tottal current ass sets Non-current assets
Pla ant and equipm ment Investments in su ubsidiaries Defferred tax asse et Tottal non-curren nt assets Tottal assets Current liabilities s Pay yables Current tax liabilitties
Pro ovisions Tottal current liab bilities Non-current liab bilities Outstanding claim ms liability Pro ovisions Defferred tax liabillities
Equity Sha are capital Investment revalu uation reserve
Summary Annual Report 2011/12 Medical Indemnity Protection Society Ltd ABN 64 007 067 281 AFS Licence 301912
1800 061 113 | mips.com.au