Legislative Council Tuesday 21 May, 2018

Ms FORREST question to the LEADER of the GOVERNMENT in the LEGISLATIVE COUNCIL Mrs HISCUTT

With regard to demands on the Tasmanian Risk Management Fund, Last year’s Budget paper Number 1 stated: 

The expected overall increase in contributions for 2018-19 is mainly due to increases in both workers’ compensation and medical liability contributions.

The significant increase in workers’ compensation contributions is primarily as a result of higher claim costs in recent years, higher staff costs and a deterioration in the funding level of this risk category. The contribution for medical liability has increased moderately reflecting higher projected claim costs and incidence rates for both large and small claims in 2018-19.

Projections in the TRMF show estimated medical liability rising from $118.5m in 2018 to $140.8m in 2022. 

1. Please provide details of claims that fall under this category for the last five years, number of claims and quantum (by range if appropriate) for these claims.

2. What is the expected claim profile for the TRMF for medical liability claims for the next four years;

3. What is the expected claim profile for the TRMF for workers compensation claims for the next four years; and

4. What is the likely budget impact of increased sick leave, including ‘stress’ leave, for staff working in ED’s around the State? 

ANSWER:

Question 1

The following data relates to medical liability as at 30 June 2018 and the payments noted reflect total payments made in each financial year.

In 2013-2014, there were 18 claims reported. A total of 12 incidents were incurred. Total payments for the year were $2.6 million.

In 2014-2015, there were 25 claims reported. A total of 19 incidents were incurred. Total payments for the year were $4.3 million.

In 2015-2016, there were 20 claims reported. A total of 18 incidents were incurred. Total payments for the year were $5.7 million.

In 2016-2017, there were 22 claims reported. A total of nine incidents were incurred. Total payments for the year were $3.8 million.

In 2017-2018, there were 23 claims reported. A total of two incidents were incurred. Total payments for the year were $3.8 million.

Question 2

The profile for medical liability claims is assessed annually by the Tasmanian Risk Management Fund’s Actuary when determining the medical liability contribution from agencies for the next financial year. 

In estimating the cost of claims the Actuary develops a claims profile for small claims and large claims based on claim numbers and average claim size per year. The Actuary also takes into account additional factors such as inflation, discounting, legal expenses, claims administration expenses and GST recoveries when calculating the cost of claims.

The projections for out-years are assessed annually and adjusted in line with the assumptions and methodologies used in determining the contribution for the upcoming financial year. The projections are based on an average of potential outcomes. The Actuary includes an allowance for large claims that occur on an infrequent basis resulting in the projections being higher than the actual costs in most years. 

Table 7.8 of Budget Paper No 1 will provide projections for medical liabilities in the Fund over the next four years. This information will be publicly released when the Budget papers are tabled on 23 May.

Question 3

The profile for workers compensation claims is assessed annually by the Tasmanian Risk Management Fund’s Actuary when determining the workers compensation contribution for the upcoming financial year. 

In estimating the cost of claims the Actuary develops a claims profile based on claim numbers and average claim size per year. The Actuary also takes into account additional factors such as inflation, discounting, under excess payments, legal expenses, claims administration expenses and GST recoveries when calculating the cost of claims.

The projections for out-years are assessed annually and adjusted in line with the assumptions and methodologies used in determining the contribution for the upcoming financial year. Actual costs may be materially different from the amounts projected.

Table 7.8 of Budget Paper No 1 will provide projections for workers compensation liabilities in the Fund over the next four years. 

17 May 2019