Dr William So Wai-ki decided four years ago that he would give up the red tape of public hospital work to deliver babies in private practice. It was a choice that came with a price tag. Last month, Dr So's insurance charges doubled overnight. Private obstetricians are at the top of the indemnity sliding scale, their premiums vastly outstripping those of public doctors. At $192,165 for the year, the rate also eclipses those faced by doctors in less risky areas of private medical care, such as family practitioners, who foot premiums of $20,455. Both figures were, however, close to 100 per cent rises in the rates offered by the Medical Protection Society (MPS), a non-profit British-based 'mutual society' that provides medico-legal support to doctors. With about 8,000 member practitioners in Hong Kong, MPS has found itself busy of late. Doctors are not only being sued more often, but for larger amounts. The potency of these legal claims is beginning to take a toll. While seen to be on the low side five to six years ago, damages ordered by the courts or settled between litigants for medical negligence are quickly catching up with the rest of the world, according to MPS. Payouts in Hong Kong have increased 500 per cent since 1999, the majority being settled out of court and thus not publicised. While the pace of litigation has been less dramatic, there are still more than 200 ongoing or potential claims against MPS doctors in Hong Kong. One in five involves up to $1 million in possible payouts, with more than a dozen cases topping $10 million. With nothing to suggest that the frequency or veracity of claims will subside, premiums look set to continue upward. Doctors are expecting another 100 per cent increase next year. 'The rate it's going, in two years' time it could well be $800,000,' says Dr So. 'In no time it's going to go up to $1 million.' This has triggered concern in the profession that for some doctors, delivering babies in private practice may no longer make fiscal sense in the long term. Some may opt to switch to another practice area or take early retirement as premiums begin to bite into the bottom line. 'And at the end of the day, the government is saying we should deliver more babies,' Dr So says. In the worst-case scenario, doctors are warning that some of the 180-odd practitioners in private obstetrics may eventually be priced out of business. 'They may get fed up and give up delivering babies,' says Dr Henry Yeung Chiu-fat, president of the Hong Kong Doctors' Union. 'Some are going to retire. For young obstetricians, they don't know if they can earn enough.' As the birth rate in Hong Kong continues to fall, the ramifications of fewer deliveries and higher premiums may inevitably be felt by consumers, with costs likely to edge up. Although they are not raising their fees yet, doctors believe the prognosis is not good. 'Among the profession, different doctors have different tactics for dealing with the situation,' says Dr Tse Hung-hing, Hong Kong Medical Association representative on the topic. 'Some doctors decided that since there is no law that you should have this individual insurance, I cannot exclude that some will not subscribe to it.' The other option is to practise 'defensive medicine' to avoid potential negligence - in other words, a number of costly tests, all of which may not be necessary. There are also few alternatives to MPS. Insurance companies are wary of taking on doctors as clients, as lawsuits can, for example, be lodged up to 21 years after the birth of a child, if negligence at birth is being alleged. It leaves a yawning period of uncertainty. Although the doctors' union has struck a deal with an insurer to cover its members - those who work in general practice - the limit is capped at $7.5 million per claim each year. For those in high-risk areas, no takers have emerged. 'They [insurers] are not willing to take us, because they can't calculate the risk,' says Dr Tse. The profession is lobbying the government to put a cap on damages, a move adopted by some states in the US, where compensation took on absurd proportions. It has also been introduced in Australia, although while doctors' liability is capped, there is no limit on what the court can order in damages. It is up to the government to foot the bill for any excess. A controversial proposal, capping has thus far won little support in government. With vehement opposition from consumer and patient groups, it is seen as being too politically unpalatable for the current environment. Nor is there much support from outside the profession. 'It's unfair to the patients,' says Patients' Rights Association spokesman Tim Pang Hung-cheong. 'For every patient suffering medical negligence, they suffer a lot. In Hong Kong's civil law system, these damages are being calculated in a very objective way.' Depending on how the issue unravels, in the long term it could leave the government in a tricky position, given its desire to wean consumers off the overburdened public health care system. Much will hinge on the degree to which costs get passed on to patients. 'Although the government is saying it's not horrendous yet, I think it's coming,' says former legislator and ex-Hospital Authority chairman Dr Leong Che-hung. 'I'm saying this ... because unless and until one gets prepared, we may be holding on to a hot potato.' Others such as Dr Tim Hegan, however, feel the situation still has a long way to go before it hits doomsday proportions. As international operations manager of MPS, Dr Hegan admits the premium rises in Hong Kong have been on the large side. They are, however, still up to 50 per cent lower than in other jurisdictions. 'It's just the shock of it. The percentage increase is high, but it's not any higher than other countries.' An obstetrician in Britain, for example, pays a premium of about #30,000 ($443,929). And doctors in Hong Kong are traditionally higher paid than their British counterparts. Given the historically lower premium, the increase is thus not unusual. 'There's nothing startling happening - all that's happening is that Hong Kong is catching up with the rest of the world,' Dr Hegan says. While 50 per cent of claims will eventually go away completely, the legal costs of striking settlements and going to court - although just 3 per cent make it that far - are comparatively high, putting further pressure on the premiums. It has created a situation where Hong Kong is paying out more in damages than it is taking in from its doctors in premiums. As Dr Hegan stresses: 'A lot of doctors don't realise what they are paying in for now is the future.' Dr So is also quick to add perspective. 'When you look at it from the perspective of a patient who has suffered, then certainly, some degree of compensation is justified.' With obstetricians in private practice earning up to $4 million a year, the premium represents 10 per cent of gross income. 'Again, it's not that easy to argue against rising premiums.'