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Taking a history, making a diagnosis, and prescribing some reforms: the Minister marks 40 years of Medicare

Introduction by Croakey: On the 40th anniversary of Medicare today, it is important to remember and learn from history, in order to help drive future reforms.

Below you can join Health and Aged Care Minister Mark Butler in a drive through history while gazing into his map for the future. It is his speech delivered this morning at Deakin University’s conference on ‘Medicare: a 40-year health check’.

Meanwhile, the Croakey team invites you to join us for a special #CroakeyLIVE webinar on Monday, 5 February to plan a year-long journalism project, #Medicare40Years.


Mark Butler writes:

Former Prime Minister Gough Whitlam was a man with a mission. Many missions, obviously. But one maybe stood out above all others: the creation of a universal national healthcare system.

From 1967 onwards, after being inspired by two brilliant health policy experts, John Deeble and Dick Scotton, he stumped the country, making the best case he could for his proposed scheme.

It’s said a grubby, well thumbed copy of Scotton and Deeble’s blueprint, the New Testament of his crusade, never left his briefcase.

Whitlam was motivated by a moral imperative as old as social democracy itself: healthcare free of cost to all.

He was also incensed by the sheer irrationality of the existing Menzies-era health insurance system – though ‘system’ is probably the wrong word. Mess was more accurate.

One of the many stories he used to tell on this never-ending barnstorming policy tour involved his ComCar drivers, George Bevitt and Bob Millard. Gough had discovered that they both paid twice as much as he did for family health cover, despite the fact he earned four to five times what they did.

This wasn’t by accident, but by design.

They paid twice as much precisely because they earned four to five times less – because that’s what the politically driven mish mash of tax concessions and subsidies that substituted for a ‘system’ had created.

How many millions of Australians, he worried, found themselves in the same situation as his ComCar drivers?

Worse, Gough wondered, how many millions had no health cover at all?

In Gough’s mind it was a public policy obscenity that simply had to be righted.

In 1969, having made Medibank front and centre of Labor’s platform, he took Labor to within a whisker of winning government: a seven percent swing and just four seats shy of a majority.

Three years later, Medibank helped take him all the way to government. And the rest is history.

Beginnings of universal health insurance

Universal health insurance was born. But despite Gough’s indisputable mandate for it, it did not have an easy delivery.

Opposition was fierce, as it had been when the Attlee Government tried to introduce the National Health Service after the Second World War, and after Ben Chifley tried to do something similar here.

The usual suspects were involved, led by an alliance between the Liberal Party and the doctors’ associations.

There’s no party without Punch, as they say, and true to form then Queensland Premier Joh Bjelke Petersen was soon comparing Medibank to the biblical flood, the eruption of Vesuvius, and the sinking of the Titanic.

It’s a good thing he wasn’t given to overstatement.

Spurred on by the AMA and the General Practitioners Society, the incoming Fraser Government dismantled Medibank with a program of cuts and neglect.

Fraser changed the scheme so often, that it became incomprehensibly complex and out of reach to millions.

Relegating a scheme that had once provided health cover to all … to little more than a safety net for the very poorest among us.

In the world of Australian health policy, it was a history that didn’t repeat, so much as echo.

The Pharmaceutical Benefits Scheme too had had to fight off the same unholy alliance of conservative politicians and the British Medical Association before it became law in 1948.

It’s a fight that Labor has been having for decades.

Public policy feat

The Medicare we know today came from a simple four-word pledge in Bob Hawke’s 1983 election speech: “Labor will restore Medibank.”

Remarkably, it was in place just ten months after that historic election victory. When you think about it, that’s an amazing public policy feat.

A telling reminder to all public policy makers today of the benefits of simplicity, clarity and reforming intent.

Today the Australian people overwhelmingly support Medicare.

And with good reason.

In fact, the same reasons they supported it when it was first introduced in 1984.

I have with me today a copy of the letter from the pack of information Prime Minister Bob Hawke sent to every Australian to mark Medicare’s creation.

It says: “Medicare is not only a cheaper and simpler system, it’s also a fairer system. It’s cheaper for Australians and it’s cheaper for Australia. A system which will lower our inflation rate by reducing the cost of living of most Australians.”

As the past recedes from memory, it’s easy to forget why Medicare was needed.

Universal healthcare had been one of the great dreams of social reformers right around the world in the Twentieth Century, including here.

The state of healthcare available to people of little means was a global moral scandal.

What could better express the promise of a better society than the idea that every person, rich, poor or in-between, can receive potentially lifesaving medical care based on the principle of need and need alone?

Whether you were a messianic Prime Minister or just his humble driver, you deserved equal treatment.

Medicare’s animating impulse was therefore moral.

But the need for it was practical.

Before Medicare, two million Australians had no health cover at all.

That’s the equivalent of one in seven people who lived with the daily risk and worry that healthcare might see them lose the house or bankrupt them altogether.

They were low-income earners, including families with children, who earned just above the threshold for a concession card and government healthcare, but couldn’t afford private health cover.

Three out of five families without cover pre-Medicare said they just simply couldn’t afford it.

What’s worse, an additional half a million Australians were eligible for a concession card and government funded healthcare, but the system was so complex and cumbersome that they were instead paying for private medical and hospital cover.

In a stroke, Medicare did away with the unbelievably complex, inequitable and irrational state and federal mish-mash of subsidies and tax deductions, which made healthcare a source of financial and emotional anxiety for so many people.

Anxiety – because by not having health cover, those two million people rolled the dice, every day. Taking calculated risks with their lives every day.

Saying to their partners, “Look, I think it’s just a cough. Just indigestion. Only a headache. I don’t think it’s serious. It’s probably not. It’ll go away.”

It’s important to remember that illness back then for such people could mean losing their house to repossession and declaring bankruptcy.

Indeed, before Medicare, personal medical bills were the leading cause of bankruptcies.

The leading cause!

After Medicare, medical reasons were removed from the list of possible bankruptcy reasons, because it simply ceased to be an issue.

That’s how real and consequential the lack of universal health insurance was. Working class or middle class, it didn’t matter. All had to throw the dice.

This alerts us to something absolutely crucial to understanding Medicare’s continuing popularity.

Medicare was not and never has been a welfare system for people without means.

It’s a system that benefits every single one of us, no matter where we live or how much or how little we earn.

Medicare grew

And it’s no wonder Medicare took off, like a rocket.

By the date of its introduction on 1 February 1984 – as I said, just ten short months after the 1983 election – 92 percent of the population had signed up for Medicare.

Six and a half million of those iconic green and gold cards had been issued.

Doctors’ groups were still opposed to much of the scheme, but especially to its beating heart: bulk billing.

Proving that history repeats, first time as tragedy, second time as farce, the AMA instructed all doctors not to bulk bill patients, sending letters, running ads, and threatening a national strike in public hospitals. All to no avail.

Nothing succeeds like an idea whose time has come and Medicare proved to be a remarkable success, with steadily rising bulk billing rates providing fee-free GP consultations to Australians who needed them, backed by free treatment in public hospitals.

In the first full financial year that Medicare operated, 45 percent of Medicare services were bulk billed.

Four years later, that had increased to 55 percent.

A Health Insurance Commission survey at that time found community support for Medicare was at 71 percent, with just 12 percent saying it should be abolished.

It was widely popular, but the conservative side of politics had yet to get the memo.

Some for a long time.

The father of the modern Liberal Party, John Howard, was so opposed to public health insurance that he opposed both Medibank and Medicare.

As Opposition Leader in 1986 he said Medicare was “enormously expensive”, “hopelessly inefficient”, and “a sham”, and promised to “pull Medicare apart”.

He called bulk billing an “absolute rort”, and in 1986 openly promised to abolish it.

As Prime Minister in 1996, despite claiming Medicare was safe, John Howard began a program of cuts and neglect that would try to destroy it with a flank attack that hit its beating heart, bulk billing.

By February 2004, as Medicare turned 20, bulk billing had fallen off a cliff.

From 80 percent in 1996, the rate of bulk billing for GP visits had fallen to just 67 percent. Four-fifths to two-thirds.

And in 2007, it fell to another Labor Government to save Medicare and restart Medicare’s beating heart again.

By 2013, Labor had restored bulk billing to hit a new record high, with 82 percent of visits to the GP bulk billed.

Later that year, Peter Dutton became Health Minister.

Cuts and neglect

He looked at the record high bulk billing rate that he had inherited from Labor … and famously lamented that there were – in his words – “too many free Medicare services”.

So Peter Dutton began a program of cuts and neglect to deal with that, trying to do away with bulk billing altogether, by introducing a tax on every visit of every person to a GP.

And when Labor and the Parliament blocked that, Peter Dutton and the Coalition froze the Medicare rebate for six long years, ripping literally billions out of our primary care system.

He also tried to jack up the price of medicines, by up to $5 a script.

Is it any wonder, really, that Australia’s doctors voted Peter Dutton the worst Health Minister in the Medicare era?

What followed was a program of calculated neglect.

Recommendations from medicines experts were ignored.

Strategies were announced with no funding to deliver them.

My Health Record stagnated, its implementation bungled and its software full of bugs.

And on the rare occasion that a Liberal Health Minister was prepared to deviate from neglect … they were usually blocked by their party room.

Like when my predecessor Greg Hunt, to his great credit, introduced regulations to ban the import of vapes and e-cigarettes just as that market was beginning.

He was rolled by his own party room in a matter of days and his import ban had to be junked, and we’ve seen what has happened since.

Another reform not implemented, at the cost of the future health of potentially millions of young Australians.

Peter Dutton’s freeze on the Medicare rebate would stand for six long years.

And by the time of the 2022, election general practice was in its most parlous condition in 40 years.

Public confidence fell

The Morrison Government claimed that bulk billing was at nearly 90 percent – but this was a clear misrepresentation, boosted artificially by the inclusion of temporary COVID measures.

The reality was that by 2022 it had never been harder and never more expensive to see a doctor … bulk billing was in sharp decline and public confidence in our public health system had fallen a full 10 percentage points.

The signs of distress were everywhere.

Between 2018 and 2022 the proportion of adult concession cardholders that had every visit to the GP bulk billed had fallen by a full five percentage points.

Pensioners, people on disability support, Australians on income support, people caring for a sick or disabled loved one, families on the lowest incomes.

The people with the greatest need for healthcare and the least capacity to pay.

Exactly the kind of people that any politician with a heart would want to represent.

And exactly the kind of people that any doctor worth their salt would want to bulk bill.

But because of Peter Dutton’s freeze to the Medicare rebate, it just wasn’t happening.

We are determined to change that!

Minister Butler delivering this presentation.

Strengthening Medicare

In the May 2023 Budget, the Albanese Government delivered an historic $6.1 billion package to strengthen Medicare, including the largest ever investment in bulk billing.

The tripling of the bulk billing incentive for more than 11 million Australians took effect on 1 November – and it has been, in the words of the Royal Australian College of GPs – a “game changer”.

Five million children under 16 and seven million adult concession cardholders now find it easier to see a bulk billing doctor.

These patients account for around three out of five visits to the GP, and in some communities much more than that, meaning a very significant increase to gener