For almost 40 years, Medicare has been the foundation of Australia's health care system.
The universal insurance scheme means, at least in theory, that an Australian's finances should not dictate their ability to access primary care.
But the scheme is under immense stress – GPs can be hard to find, bulk billing rates are falling and there are long waits at public hospitals.
Add to this our ageing population, along with a big rise in chronic diseases, and the future does not look bright.
Since taking the health portfolio last year, Mark Butler has said numerous times that Medicare is in the "worst shape it's been in its 40-year history".
So, is he correct?
'Negotiate with a doctor'
In the mid-20th century, Australia had a dramatically different health care system.
"It was very ad hoc. It was basically left to the medical profession and the private sector," health policy analyst Jennifer Doggett tells ABC RN's Rear Vision.
Take GPs, for example.
"People going to a GP would need to pay upfront – whatever the GP asked … Doctors spent a lot of time chasing bad debts," Doggett says.
Echoing today's US health care system, vulnerable Australians often couldn't access a doctor.
"They would have to go and seek help from a charity, or they would have to try and negotiate with a doctor to treat them for free, or sometimes [offer] payment in kind," Doggett says.
"There was a motley array of what we would now call private health insurance funds … [which were] in general, small, poorly regulated 'friendly societies', but there was very little security for consumers."
This is what Gough Whitlam sought to change.
Medicare's predecessor: Medibank
When Whitlam was elected in 1972, one of the Labor prime minister's main goals was to extend health care to everyone. His proposal was called Medibank.
"[Medibank] was developed by health economists and it was very much a health financing system – it restricted itself to health insurance," Doggett says, as opposed to a national health care system like the UK's National Health Service.
The federal government would collect money via taxation and then pay it out as rebates for medical services.
Doggett says it was organised around key principles of "equity, efficiency, universality", that "people would be able to access [care] on the basis of need, not the ability to pay".
Stephen Duckett, an honorary professor at the University of Melbourne's School of Population and Global Health, adds: "On the hospital side, the promise of Medibank was that everybody would have access to public hospitals … and the states were subsidised for that".
But the idea was met with fierce opposition from some within the Labor Party, the Liberal Party and the medical profession, including the Australian Medical Association (AMA).
As part of the fight, the AMA set up a "Freedom Fund" to help resist the "socialisation of medicine" and got a former Miss Australia to push their campaign.
Medibank only became law after the double dissolution election of 1974, during a joint parliament sitting, and began in 1975.
It also helped create SBS, with its early radio stations established to help "inform Australians from non-English speaking backgrounds about Medibank".
But very soon after, Whitlam's time in office came to an abrupt end.
An ardent critic
On 11 November 1975, the Whitlam government was dismissed. Liberal Malcolm Fraser took power and won a landslide election soon after.
He was an ardent critic of Medibank.
"[Fraser] promised to maintain it and he maintained it for a while, but he kept changing it," says James Gillespie, an associate professor at the Menzies Centre for Health Policy and Economics at the University of Sydney.
"There were six different versions of Medibank in as many years, and at the end of it, [the Coalition] just abolished it."
The birth of Medicare
In 1983, the Fraser government lost power to Labor's Bob Hawke.
The Hawke government brought back Whitlam's idea in 1984 but under a new name: Medicare. The scheme was reintroduced as part of the Accord negotiated with the trade union movement.
"It was very widely accepted by the public. It was very popular right from the start," Duckett says.
"[But] there was a proportion of the medical profession that fought a rearguard action for a long period of time. And they were supported by the Liberal Party."
Safety net?
While in opposition, Liberal John Howard was no fan of Medicare. He called it "one of the great failures of the Hawke government" and repeatedly warned of growing costs to the federal budget.
But Howard's tone gradually changed. He won the 1996 election promising to retain Medicare and also to introduce a private health insurance rebate.
Duckett says Medicare was in relatively good shape around this time – but private hospitals and private health insurance had seen a reduction in demand.
"The Liberals' ... main changes during most of this period was to prop up private health insurance in various different ways."
Gillespie points out a more symbolic change under Howard.
"[Howard] kept referring to Medicare as a 'safety net' – that was not the way Labor had designed it," he says.
"Preserving Medicare as a 'safety net' was trying to encourage – to push – people into private insurance if they could afford it."
Rudd and Gillard
Labor was back in power in 2007, led by Kevin Rudd.
"[Labor] inherited a system that had really outlasted its use-by-date, that had not been reformed," Doggett says.
Rudd appointed the National Health and Hospitals Reform Commission, which looked at the whole health system and its interrelationships – making big recommendations across the system.
"[But] by and large, many of those were put on the shelf … The big changes were not implemented," says Duckett, who was a member of the commission.
Under Julia Gillard, Labor introduced a "temporary" Medicare rebate freeze in 2013, but was voted out soon after.
Coalition returns
From 2013-2022, the Coalition was back in power, under Tony Abbott, then Malcolm Turnbull, then Scott Morrison.
Duckett calls these years "a period of malign neglect" of Medicare.
"In the first Abbott budget with Peter Dutton as health minister, they basically tried to destroy Medicare through introductions of compulsory co-payments."
That failed to gain the required support in the Senate.
"What they then did was implement a long freeze on rebates," Duckett says.
He says rebates gradually went up with the consumer price index but didn't keep up with average weekly earnings.
"So there became an increasing gap between the costs that general practitioners and general practice were facing and the revenue they were able to get from the rebates."
The other major shift was the "change in ownership structures", that "big corporates began ... to take ownership of general practice".
As a result, many GPs have backed away from bulk billing.
"The decline in bulk billing is really hurting," Duckett says.
"We're beginning to hear people saying: 'There was an implicit promise that we would have no financial barriers to access primary care, and that promise is being broken'."
Labor returns
After the Albanese government took over in 2022, it established the Strengthening Medicare Taskforce, which released its report at the end of last year.
It made broad recommendations, like changing how GPs are funded so they get paid more for longer consultations and encouraging "multidisciplinary team-based care".
"We have to reposition the health system from this obsession with fee-for-service to a more mixed approach," says Duckett, who was a member of the taskforce.
But Doggett says: "I think what the history of Medicare has shown us is that it's very easy to agree on broad principles, but it's very hard to put them into practice".
As Duckett points out, for any Medicare reforms: "We've got a huge public sector deficit. And if you do anything in the health system, because there are so many consultations and so on, it costs a lot of money".
An inequitable system?
Doggett says when Medicare was developed, our health care needs were "more for short-term and acute episodic care". Today, our health care needs "are predominantly for complex and chronic conditions".
So she's blunt about the current situation: "Medicare is not fit for purpose".
Additionally, a government-commissioned review recently found up to $3 billion in taxpayer money is lost to Medicare fraud and non-compliance annually. (This review came after a joint investigation by ABC's 7.30 program and Nine newspapers).
The review also warned that the system is no longer fit for purpose and without improvements risks costing more taxpayer money.
Citing spiralling costs for Australians, Doggett warns if nothing is done, there's a scenario where the wealthy can afford health care and the less-well-off face high barriers to it – a scenario no-one should accept.
"Access to good health care underpins so much of the other benefits in our society. It underpins productivity, social cohesion … The health of all of us is connected with each other."
This article was updated on May 18, 2023 to provide additional information about the 2023 government review into Medicare and the origins of the 2013 rebate freeze.
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