Western Health Logo

The People’s Hospital Tales from the surgeon's table

Chapter Three

Medibank’s arrival ends the honorary system

Next arrow

The honorary system for surgeons in public hospitals had no chance of withstanding the demographic, technological and political changes sweeping through Australia in the 1970s.

At a national level, the Whitlam government’s election in 1972 ushered in a healthcare revolution.

The government introduced Medibank, the nation’s first universal health-insurance scheme, which gave Australians free treatment at public hospitals and for medical services regardless of their financial status.

Patients no longer had to pay a fee to be treated for emergency, outpatient medical services and in-patient care.

The government embarked on a massive expansion of Australia’s health services, pouring money into new hospital facilities, especially in the rapidly expanding suburbs of the nation’s cities.

It introduced a Medibank levy that provided an extra funding stream for cash-strapped hospitals.

It struck hospital agreements with state governments and dispensed Commonwealth grants equal to 50 per cent of net operating public hospital costs. The grants put hospitals on a more secure financial footing and reduced their reliance on parsimonious state organisations such as Victoria’s Hospital and Charities Board.

When Gough Whitlam died on 21 October 2014, Bob Hawke, another former Labor Prime Minister, spoke of Whitlam’s legacy and Medibank’s immediate impact on the lives of ordinary people.

“Before Medibank the prospect of sickness, ill health and hospitalisation caused poorer people to face the prospect of financial and personal disaster,” Mr Hawke said. “The national health scheme was arguably one of the best and fairest in the world.”

Next arrow

Sowing the seeds of Medicare – a former Whitlam government minister looks back

Dr Moss Cass, 88, was the federal member for Maribyrnong from 1969-83 and environment minister in the Whitlam government.

He practiced medicine in Carlton and Footscray before his election to federal parliament in 1969. Throughout the 60s Dr Cass was active in the Labor party’s in the Labor party’s state and federal health policy committees.

During that era he remembers attending several meetings where Gough Whitlam, then the party’s deputy leader, gave speeches calling for a more comprehensive system of public hospitals to meet the demands of Australia’s growing population.

Dr Moss Cass, a Whitlam government minister in the early 70s.

Dr Moss Cass, a Whitlam government minister in the early 70s.

Dr Cass

Mr Whitlam told audiences that health services in suburban areas were inadequate and public hospitals could expand and become more efficient if honorary positions were replaced with salaried specialists or consultants.

“I remember in early 1968 Gough gave a talk to residents at Prince Alfred’s Hospital in Sydney about a national health insurance scheme,” Dr Cass said.

Mr Whitlam argued that a national health insurance scheme, via a one per cent levy on income tax, could help pay doctors’ salaries if a federal government abolished the honorary system.

Others outside the Labor Party also supported the notion of paying consultants in public hospitals. Some leaders in the medical profession had floated the idea in public forums and newspapers. A few hospital directors had begun to employ a small number of honoraries as salaried staff.

One of those administrators was Vernon Collins, Professor of Paediatrics and medical director of the Children’s Hospital, where Dr Cass worked as a medical researcher in 1955 and later in the early 60s when the fledgling paediatric hospital was located in Pelham Street, Carlton.

“Vern Collins was beginning to employ consultants because he was trying to convert a cottage hospital into a teaching hospital with students,” Dr Cass said. “So he wanted specialists to raise the hospital’s standards and be there full time.”

Dr Cass left the children’s hospital in 1964 to become the inaugural medical director of the Trade Union Clinic and Research Centre in Paisley Street, Footscray. The clinic was established by the Meatworkers’ Union, whose state secretary George Seelaf, was concerned about the variable quality of medical care for meatworkers injured in workplace accidents.

Dr Cass arranged for a physician and surgeons from Footscray Hospital to come to the clinic to help with the clinic’s surgical cases. Surgeons Tim Loh and Paul Large carried out regular sessions at the clinic, carrying on the tradition of the hospital’s close ties to its local community.

Looking back on the introduction of the national health insurance scheme, known as Medibank, which later became Medicare, Dr Cass said the scheme had many supporters in the medical profession, despite fierce opposition from some of the profession’s leaders and peak groups.

“Medibank was one of the main reasons for the Labor Party’s victory in the 1972 federal election,” Dr Cass said. “When we won the election I don’t think many consultants objected to the federal government paying them to treat patients because they were working for nothing up until then. They were still going to be allowed to have the right of private practice and could then get some of their private patients into public hospitals.”

Next arrow

Impact on Footscray’s surgeons

Medibank had an immediate impact on surgeons. It ended their traditional work practices. Honorary positions in public hospitals were abolished and instead surgeons were employed on a sessional basis.

At Footscray, the honorary system had already lost its lustre among those trying to run the hospital, especially among the younger generation of hospital managers and administrators. Writing in the hospital’s 1972 annual report, Dr Peter McCleave, the medical superintendent, described some of the problems caused by the grace and favour system of honorary appointments.

“We have difficulty coping with the load of work presenting to our Eye Clinic, and the sooner the removal of the Honorary status is accomplished the better it will be for this Hospital,” Dr McCleave wrote. “By having paid medical staff we will at least be able to attract more people to these appointments, instead of relying on the hard-working devoted few.”

As hospitals grew into modern, more complex organisations it was no longer practical to rely on the goodwill of surgeons prepared to do unpaid work, especially after hours. Rapid advances in medical treatments, drugs, equipment and knowledge also started to require a more consistent approach to patient care, planning and service delivery.

The honorary system’s weaknesses were becoming increasingly evident to staff in all hospitals, including those who had reached surgical registrar level, such as a young Joseph Epstein, who worked as surgical registrar at the Royal Melbourne in 1968.

“If a surgeon was committed to their unpaid public hospital work it was lovely because they were motivated by the highest moral principles,” Mr Epstein said. “But if they weren’t committed it was a nuisance.

Firstly because a lot of the responsibility and patient care fell on to the junior staff, who were in turn variably competent and variably committed.

“Secondly, their willingness to participate in the institutional life of the hospital varied enormously. Some were very committed and again saw it as a question of public duty. Some were willing to participate in strategic planning for the hospital, the vision for surgery and development planning but it meant making choices about their time because they weren’t being paid for it.”

John Thomson, an ENT surgeon, said many of his colleagues were ambivalent about switching from honorary to paid positions.

Next arrow

A revolution of relationships and service

“After 1975, everything changed. Medibank was a revolution of relationships as well as a revolution of service,” Mr Thomson said. “ It’s been all to the good because it brought more money, more clinics, more expertise into the hospital. The hospital could employ full time surgeons.

“Most surgeons thought the honorary system was wonderful… but the government put the money in a fund and if we didn’t take it up it would be gone.

“We made a grab for the money because we had mortgages to pay off…. There was a psychological change in the relationship between the doctors and the hospital management.

“Some doctors felt the management was going to get us by getting more out of the machine. But being paid didn’t make much difference to our work as surgeons. We worked a bit more but that was also because the hospital was getting busier.”

Despite the misgivings that many surgeons felt about the end of the honorary system, most Australian surgeons had experienced a similar sessional payments system during their surgical training in British hospitals under the National Health Service, according to Felix Behan, a plastic surgeon who joined Footscray Hospital’s surgical team in 1974, after he completed his surgical training in Britain.

“Medibank had advantages over the honorary system because it made people more accountable,” Mr Behan said. “It meant you were under contract and you were entitled to six weeks holiday a year.

“Whereas in the old days people would say, ‘I’m honorary, I’ve done all that work for nothing so I’m taking the next four weeks off’. It was a find me if you need me style of doing business. The more senior you were, the more elastic you could be in extending the elements of privilege. Those elements all went when the sessional payments system came in.”

By the mid 70s most of the hospital’s original leadership team – Roy Parsons, Mavis Mitchell, Ted France - had retired.

The new administrative team implemented the Medibank changes and oversaw the hospital’s expansion under the new federal-state funding arrangements.

Eric Farnsworth, a small businessman from Footscray was the hospital’s new president. According to John Thomson, Mr Farnsworth was “a rough diamond, who didn’t get on well with the doctors. He and the executive director Mr Allan Wallace epitomised the times”.

Messrs Farnsworth and Wallace co-authored the board of management’s report in the hospital’s 1977 annual report and devoted a few paragraphs to the impact of the Whitlam government changes.

In what proved to be an understatement of the situation, the two men wrote: “The transition from the tradition of honorary service to a system of payment for the services of members of the medical staff has been completed and the initial problems solved.”

Gough Whitlam’s Labor government introduced Australia’s first universal health insurance scheme, Medibank, in 1975.

Gough Whitlam’s Labor government introduced Australia’s first universal health insurance scheme, Medibank, in 1975.

Andrew Chapman

Next arrow

A division of surgery is created

They announced a major reorganisation of the hospital, approved by the hospital board and designed to improve the delivery of services to patients.

The new system organised the hospital into seven major clinical divisions:

  1. Surgery including general and specialist surgery.
  2. Obstetrics and Gynaecology.
  3. Medicine.
  4. Anaesthesia and Intensive Care.
  5. Diagnostic Services.
  6. Accident and Emergency.
  7. Central Medical Services.

Each division was to be headed by a Chairman and structured into a series of departments.

In the following year’s annual report, Mr Wallace delivered a more forthright appraisal of the changes buffeting the surgeons and other staff at the hospital.

“The period 1974-78 could well be written into the history books as the period during which Australia’s health system was restructured, dismantled, almost decimated, and stricken with an inflation and cost escalation rate never experienced since Federation,” Mr Wallace said.

“During those hectic four years we have seen changes in the Federal Government, the introduction of Medibank I and Medibank II, thrusting to and fro between State and Federal Governments over financial obligations and responsibilities, and a general attack on the levels of incomes of certain specialist groups and the cost of medical services in general.”

Next arrow

The 70s – a more complex society, more complex patients

By 1978 the hospital had evolved into a regional health facility providing services for Melbourne’s western region, stretching from the inner west to Sunbury and across to Werribee. It bustled with new specialist divisions and groups of trainee medical students, registrars and nurses who trained and lived on site.

Bed numbers had grown to more than 300 and patient attendances had increased to 82,000, a 6.5 per cent rise compared with the previous year.

The Emergency Department was treating more than 200 patients a day and the number of emergency patients being seen at night and on weekends was rising fast.

In his annual report, Dr Peter McCleave described the hospital’s escalating workload: “The complexity of the work has also increased, with a greater volume of Vascular and Neurosurgery. In fact there are now few surgical procedures which are not being performed at Western General Hospital (Footscray Hospital).”

The surgery division’s workload cascaded across the hospital. Dr McCleave reported it had even led to an increase in workload for the “hardworking girls in the dungeons of the Medical Records department” because medical staff were doing more research and were using the disease and operation index for review more frequently.

“The retrieval of medical records for various departments and medical staff now runs at over 500 per weekday but we still face the continual battle of persuading residents to produce summaries,” Dr McCleave said.

The establishment of the Division of Surgery led to more collaboration between surgeons and a greater focus on teaching. Dr G Bearham, the hospital’s medical director in 1978, wrote that regular meetings of surgeons were proving to be a useful forum for the medical staff to exchange views and discuss mutual problems. He said the new Saturday morning clinical meetings, where units took turns to present patient cases, were well attended by visiting and resident medical staff.

The rotating registrar scheme with Prince Henry’s Hospital was improved by extending the registrar’s term to six months.

Specialty operations, especially in orthopaedic, neurosurgery, paediatric and vascular surgery became more common, placing an extra strain on beds and theatre time. “With all operating theatres fully booked during the week, great difficulty is experienced in fitting in emergency operations with the result that many of these have to be carried out at night,” Dr Bearham said.

An operating theatre in 1980 and its cost , an extract from that year’s annual report.

An operating theatre in 1980 and its cost , an extract from that year’s annual report.

Western Health archives

Next arrow

Operating theatres unable to cope

The surgeons’ workload was also increasing because of the steep rise in the number of patients attending the Accident and Emergency Department. In 1978 the department dealt with 84,000 people, more than double the number it dealt with in 1972.

The department had become Victoria’s third busiest hospital emergency department. However, a breakdown of the 1978 casualty data provided a glimmer of hope – the number of patients injured in road traffic accidents had halved. Dr Bearham said the recent introduction of Victorian laws mandating blood alcohol limits for drivers could be the reason for the improvement.

He made a prescient observation about what should be done to tackle the spiralling demand for hospital services.

“An emphasis on preventative health care is needed, but this will require changes in the attitudes of society as a whole, as well as important opinion-shaping portions of it, such as the mass media, business and unions. At present much of today’s illness is alcohol and/or nicotine produced and is therefore preventable. This seems to be one obvious target for the future.”

In the following year’s 1979 annual report, Dr Bearham reported that the surgery division had reached its limit in the number of patients able to be treated because of a shortage of beds and overwhelming demand on the three major operating theatres. “Although the road toll is falling there has been a significant increase in the amount of orthopaedic and plastic surgery carried out, much of this resulting from road trauma,” he said. “This work is time consuming and makes it difficult to reduce the long waiting lists in other specialties.”

Daily routine in the casualty department, 1976.

Daily routine in the casualty department, 1976.

Western Health archives

Next arrow

March of technology complicates surgeons’ workloads

The jobs of all medical staff across the hospital became busier and more complex. Intensive care courses and theatre courses for nurses were introduced at the hospital’s training school to complement the requirements of the newly established intensive care units.

Rapid developments in plastics technology, especially modern plastic tubing, in microelectronic technology and pharmacology, led to new patient treatments and surgical techniques.

“In the 70s there was great excitement when surgeons performed the first hip replacement operation on a patient at the hospital,” said Marion Borlase, a peri-operative services manager at Western Health who began her training as a student nurse at Footscray in 1968.

“Sister McNeilage virtually had the place shut down – once you went into theatre three where the operation was taking place, you weren’t allowed out because of concern about keeping the theatre as sterile as possible.”

As the 70s drew to a close, surgeons’ traditional work practices and the hospital’s organisational structures weren’t the only things to have undergone dramatic change. A large capital works program - the $3.5 million outpatients department, its Intensive Care Unit, Operating Theatres and Accident and Emergency Department – had been completed.

The social culture of the hospital was changing too, reflecting society’s broader move towards freer expression and less formality. The workplace and technological changes combined to strengthen the hospital’s fast-growing reputation as a tough but attractive training ground for ambitious medical trainees and staff.

Next arrow