Medicare: Taking a history, making a diagnosis, and prescribing some reforms

Feb 5, 2024
Minister for Health Mark Butler at a press conference at Parliament House in Canberra, Monday, January 29, 2024. Image:AAP/Mick Tsikas

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.

Introduction by Croakey: On the 40th anniversary of Medicare, 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 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!

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 general practice income.

For a doctor in a major city, the Medicare payments they now get to bulk bill these patients for a standard consult have increased by 34 percent.

For a doctor in regional and rural Australia Medicare payments for that sort of consult have increased by around 50 percent.

In the Hunter, Doctor Yasas Samarasinghe said it is a “lifeline”.

And in the Northern Rivers of New South Wales, another doctor, Ken Stockley, told us: “It is going to encourage those that have recently changed to private billing to go back to bulk billing.”

Even in these early days, just a couple of months into the new incentives, that is exactly what we are seeing across the country … clinics everywhere making that shift.

Today, I can announce that across the country, the GP bulk billing rate has risen by 2.1 percentage points in the first two months since we tripled the bulk billing incentive on 1 November.

77.7 percent of all visits to a GP were bulk billed in December.

That’s an estimated 360,000 additional trips to the GP that were bulk billed in November and December, that weren’t in October.

Hundreds of thousands more bulk billed visits, saving Australians $15 million in gap fees, in those two months alone.

People in rural and regional Australia have particularly benefitted, with 200,000 of those additional bulk billed visits outside of our major cities.

What’s particularly encouraging is that some of the largest increases have been in parts of the country that have struggled for years – or even decades – with low rates of bulk billing.

Tasmanians have seen the biggest increase in bulk billing in all of Australia. A massive 5.7 percentage point increase in the GP bulk billing rate in just two months.

72 percent of visits to the GP were bulk billed in December in Tasmania, with an estimated 20,000 more bulk billed visits saving Tasmanians 1 million dollars in gap fees.

In the Hunter in NSW, a 3.4 percentage point increase has saved residents there $450,000 in gap fees.

Benefits for their health and their hip pocket.

A new era

To mark the 40th anniversary of Medicare, I want to say that the era of calculated neglect of our great universal health system is now over.

A new era of strengthening has taken its place.

As I have mentioned, Bob Hawke created Medicare with just four simple words in 1983, “Labor will restore Medibank”.

I have four words simple words too: “Labor will strengthen Medicare.”

The work has already begun to return our cherished Medicare to its rightful place as one of the world’s most envied public health systems.

The Strengthening Medicare Taskforce’s recommendations are being speedily implemented.

As well as the $6.1 billion we have injected to strengthen Medicare and save bulk billing, we have reformed the Pharmaceutical Benefits Scheme, cutting the maximum co-payment, reducing the PBS safety net threshold, and delivering 60-day prescriptions for six million Australians with a chronic health condition.

To address the growth of more complex and chronic health conditions, we have created a new Medicare rebate – for consults that go longer than 60 minutes.

Workforce incentive payments have been increased by up to 30 percent and indexed, to allow doctors to build bigger and stronger multidisciplinary teams, including practice nurses and allied health professionals in the delivery of quality primary care.

And we’re encouraging the entire workforce to work to their full potential: whether it’s nurses, pharmacists or allied health professionals.

In a global health workforce shortage we need everyone working to the top of their scope.

Future directions

As part of bringing Medicare into the 21st century, we also want to see the My Health Record system used to its full potential, with patients in control of their own information and all clinicians uploading to the My Health Record. No matter where a patient accesses services, data on their health history should follow them.

And we are going to make MyMedicare the base upon which we build a stronger and more personalised universal healthcare system – with high quality care from teams of medical experts tailored to the needs of each individual patient, starting with priority groups.

This is working too. As of a fortnight ago, more than 5,500 practices and more than 710,499 patients had registered to MyMedicare, which is designed to scale up and take on greater functionality over time.

The first of two MyMedicare blended funding packages will become available in the middle of this year.

One will be targeted at the nearly 10 thousand patients who present to hospital more than ten times per year.

And the second at the nearly 200 thousand Australians in residential aged care, with incentives for doctors to provide regular visits and care planning for people in their aged care facilities.

My Health Record and MyMedicare will together take Medicare into the future.

But modernising Medicare isn’t just about large-scale, headline-grabbing reforms alone.

The complex nature of modern healthcare means it must involve a myriad of smaller improvements that are potentially life-changing and life-saving for many people, delivering care faster and more efficiently.

A great example is our $47.8 million Chronic Wound Care Initiative, which will provide fully subsidised wound consumable products for people aged 65 and over and for First Nations people 50 and over, who have chronic wound conditions and diabetes.

It will deliver wound consumable products to general practices and to people’s homes, free of charge, improve chronic wound management training for health care professionals working in primary care, and include an important public awareness campaign.

A faster service, with less bureaucracy, delivering care more efficiently, freeing up resources to be spent on things like illness prevention.

This illustrates the direction in which Medicare will increasingly go.

We have also initiated a review to investigate ways to more equitably distribute doctors and other health professionals around the country.

Medicare can’t be universal when it is hundreds of kilometres and many hours of travel away.

Then there are our cheaper medicines reforms: delivering the largest cut to the maximum co-payment in the 75 year history of the PBS and saving Australians 240 million dollars on their medicines last year alone.

With more savings to come this year.

Another 100 medicines will soon be available on a 60-day prescription, saving time and money for Australians with an ongoing health condition.

This is not just good for the hip pocket, it is also good health policy.

A 30-day script made a lot of sense when chronic conditions were less common and more patients would usually attend their pharmacy with a short illness seeking a one-off course of medicine.

A 30-day script makes less sense today, when half the patients have a chronic condition, and many of them are on the same medicine, not just for years, but often for decades at the same dose, or even for the remainder of their life.

We can’t strengthen Medicare for the 21st century without also strengthening the PBS.

Cheaper medicines and more free Medicare services – exactly the kind of targeted cost of living relief that Labor Governments are known for – cost of living relief that brings inflation down.


So as we celebrate the 40 year anniversary of Medicare – a nation shaping reform – we must always remember that universal healthcare is not now – and never has been – a given in this country.

It has been fought for. By Labor. And by visionary health policy experts, doctors, nurses and others, for decades.

With high court challenges and referenda.

In the face of sometimes savage assaults from lobby groups and vested interests.

And always struggling against the cuts and neglect of those who for irrational reasons just won’t accept it.

As we continue to take the hard choices to strengthen Medicare for the future, I fully expect that some will oppose them, just like the Liberal Party opposed
… Chifley’s PBS in the 40s
… Whitlam’s Medibank in the 70s
… Hawke’s Medicare in the 80s
… or our 60-day prescriptions in 2023.

Our nation owes a deep debt to Deeble, Scotton, Whitlam and Hawke, to former Social Services Minister Bill Hayden, to later Health Minister Neal Blewett, and the countless others who over many decades fought so hard to make the Medicare we enjoy today a reality.

Their legacy is immense and will never be forgotten.

Today on this day of celebration we salute them all.

Medicare and its beating heart, bulk billing, are here to stay. We’ve enjoyed them for the past forty years, and I’ve got my vote on them being here for another forty as well.

Coakey Editor:


Original article published in Croakey on 1st February, 2024


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