There is a way to restore Bill Hayden’s vision of universal healthcare in Australia

The recent death of Bill Hayden is cause for contemplation of his most significant legacy to this country.

As social security minister in the Whitlam government, Hayden worked with two young health economists, John Deeble and Dick Scotton, to develop Medibank. He battled the Australian Medical Association, private hospitals, private health insurance funds, the non-Labor states and the Coalition-controlled Senate to do so. It was Australia’s first universal healthcare program, providing access to hospital and primary healthcare for all of the population.

Medibank was closed down by the Fraser government but revived as Medicare in 1984 by then-prime minister Bob Hawke and his health minister Neil Blewett. It has become embedded as the underpinning of Australia’s health system, and despite repeated attempts to undermine it by conservative governments, retains popular status for the Australian community.

As part of negotiations to establish Medicare, the states agreed to make access to hospital care free in exchange for a Commonwealth commitment to meet 50% of the reasonable cost. That commitment has eroded over time. Former prime minister Kevin Rudd negotiated to guarantee 40% of hospital costs as part of his hospital and healthcare reform agenda, but even that was abandoned by the Abbott government.

It is in primary healthcare, however, that most of the pressure on Medicare has been felt.

Universal access to healthcare requires that it be available for everyone, irrespective of their financial means. This is no longer the case, as real bulk-billing rates have collapsed and fees to see a general practitioner have risen. People with easily treatable conditions are discouraged from seeking healthcare by cost and find their way, much sicker, to hospital emergency departments. Emergency departments are being swamped by avoidable presentations — either people who should be attending a GP or who would not require emergency treatment had they done so.

Initiatives to address the crisis such as urgent care centres help, but they do not address the problem at source. The most recent changes Introduced by the Commonwealth government to support bulk-billing increase the subsidy for bulk-billing. They are welcome, but unlikely to be effective. Carrots without sticks are seldom effective in bringing about changes in institutional behaviour

The current crisis in primary healthcare is a result of intentional behaviour by conservative governments to undermine and ultimately destroy Medicare. The combination of freezing Medicare rebates and deregulating doctors’ fees have had the predictable result of making bulk-billing unsustainable for providers and putting primary healthcare beyond people of modest means. 

There is an alternative and one that would have appealed to Hayden: reset the Medicare rebate at a level that gives GPs a reasonable and sustainable income and index this. Then cap the fees that GPs can charge at the new rebate level. While we are at it, we should cap specialist consulting fees that are out of control.

There would be a hit to the budget but the economic impact and ultimate fiscal impact of improving access to primary care and reducing demand on expensive emergency care would be very significant. Opponents will claim that this is “conscription of doctors” and so unconstitutional, a claim that is made any time there is an attempt to properly manage healthcare, but it is a claim that has never been tested in court. If the claim was successful, it could be worked around.

I see few alternatives that might restore Hayden’s vision of Medicare as truly universal healthcare. 

Does Medicare need resuscitation? Let us know by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.