Happy Birthday Medicare: Our public health insurer turns 40

Updated 06/02/2024
Happy Birthday Medicare: Our public health insurer turns 40

Once synonymous with free healthcare, is Medicare still fit for purpose?

Time to read : 4 Minutes

Medicare turns forty this week, so we thought we’d ask the question: 

Is Medicare still fit, at forty? By ‘fit’ we mean fit for purpose - because the health needs of a nation aren’t static and it’s no secret we’re an ageing population.

First, a little history:

Medicare began life in 1975 under Whitlam, though the idea started back in 1965 when he was in Opposition. When it launched, it was known as Medibank. 

When the Labor party lost power in 1976, the Liberal party took charge, gutted Medibank into ineffectiveness - and abolished it entirely in 1981.

In 1984, Hawke brought it back more or less in its present form, and that’s the public health insurance scheme we celebrate, or deride, today, depending on your point of view.

A statistic you may have heard trotted out is that until 1977 healthcare bills were the top cause of personal bankruptcies in Australia - and this appears to be accurate, (not to mention shocking).

It's one of the best:

There’s no doubt that Medicare revolutionised access to healthcare for all Australians, offering rebate subsidies for general practice consults, and addressing financial barriers to costly medical treatments. 

  • Despite the initial controversies, the program became a definitive cornerstone of Australia's healthcare system.

  • According to global thinktank The Commonwealth Institute, Australia is considered to have one of the highest levels of healthcare in the world, alongside Norway and The Netherlands. 

This is due in no small part to Medicare, without which universal healthcare for Australians wouldn’t be possible. That said, our healthcare needs as a nation have changed.

Medicare was originally designed for episodic care, not long-term, long-lived health conditions like diabetes, or mental health care management - and these diagnoses are on the rise. 

Who’s getting left behind?

Diabetes is a good example: Australians with diabetes require diabetes educators, nurses, specialist care from an endocrinologist, and sometimes an exercise physiologist as well. This isn’t the kind of care Medicare assists with easily - and it’s expensive.

Most sufferers with chronic health conditions can only access episodic care via Medicare’s minimalist approach to cover.

While the financial aspect of this is understandable, it’s clear many Australians - who already pay for Medicare via their taxes - can only access the care they need via ever-rising private health insurance premiums, and their own hip pocket. 

This easily leaves too many without essential care services, simply because that care is required long-term.

The experts weigh in:

Dr. Elizabeth Deveny, the CEO of the Consumers Health Forum, has highlighted that Medicare needs adjustments to better address the multidisciplinary and ongoing care required for managing chronic health conditions.

The President of the Australian Medical Association, Prof. Steve Robson, agrees with her, citing the increasing burden of chronic diseases and the rising out-of-pocket costs for patients.

He also highlights the glaring truth that mental health care is an area increasingly left behind by both Medicare, and private health insurers. 

“Medicare really wasn’t designed for that. It was designed for episodes of care – where if you had a gallbladder problem, you would see a doctor, have it dealt with and go home,” he says, stressing the need for Medicare to adapt. 

“The health landscape is very, very different now to the way that it was – not only forty years ago – but you’ve got to remember that the architecture of Medicare was really built fifty years ago.”

He points out that Australia’s population is much older now than it was four decades back. Some of the most prevalent conditions need a coordinated care approach, and more longevity of care.

While Medicare has been a cornerstone of Australia's healthcare success, ongoing adaptation and policy adjustments are becoming increasingly necessary. That's if we intend to ensure our national public health scheme effectively meets the diverse and changing health needs for all of us.

The bottom line:

  • Medicare turns forty - and we’re taking stock of its usefulness, and its claim to universality.

  • Once synonymous with free national healthcare, Medicare faces criticism for its limitations, making some types of essential care unaffordable.

  • This particularly impacts sufferers of chronic conditions, such as diabetes, and mental illnesses - basically any health issue requiring ongoing support.

  • The challenge lies in finding a balance that ensures healthcare accessibility without compromising the financial sustainability of the system.