Celebrating 75 years of public health

Seventy-five years ago, in 1938, the first Labour government introduced the Social Security bill to provide free health care for all. It was to be the first national health system in the world.

michael joseph savageBy Anne Goodman

Its most determined advocate was Michael Joseph Savage, Labour’s first prime minister and widely regarded as the architect of the welfare state. It was at a time when those who could afford it paid to see a doctor, and the rest relied largely on charity.

Labour’s vision was a health system that entitled everyone to free hospital treatment, free doctors’ visits and free medicines. At its heart was the principle that health care was a fundamental right and there should be no financial barriers.

The focus was on preventive health care, with hospitals and local doctors providing an integrated service. Doctors would be employed in the public health system as salaried public servants.

This last point outraged doctors and the British Medical Association (NZ branch) lobbied fiercely for general practitioners to be able to continue to operate as a business and set the fees for their services. 

Historian Barry Gustafson records that, in order to get free maternity care implemented, Michael Savage issued doctors with a 48-hour ultimatum: either they would provide maternity care for a fixed payment, or he would recruit doctors from among German and Austrian Jewish refugee doctors, of whom there were many.

Within two weeks, doctors accepted the fixed payment for maternity services. But this did not extend to GP visits. Michael Savage died before the new health system was fully implemented; without his unbending fortitude, the government struck a deal with doctors.

The crux of the deal was that GPs would run their private businesses and set their own fees; the government would pay a subsidy for each patient visit to keep costs down. Hospital treatment would be free but doctors could skip between the public and private sectors.

Thus the vision of a free public health service focused on preventive medicine was compromised from the start. The foundations were laid for the complicated public/private mix we have today.  

The compromise has proved to be an expensive model. Successive governments have struggled to adequately subsidise GPs’ ballooning fees, while for patients, the cost of visiting a doctor has been a barrier for many. The lack of early medical care has led to more people needing far more costly hospital treatment.  

Our public health system has been a political football from its inception and throughout its 75-year history. It’s been tinkered with – most dramatically in the nineties, when a National government commercialised hospitals and installed cash registers – and, in the ebb and flow, its founding principles have been severely strained.

But despite it all, the kernel of the original vision remains. We have a highly-skilled health workforce working in the public health system. Emergency care and operations are free. From conception to birth, maternity care is at no cost to parents.  

For all its faults, we have cause to celebrate the 75th birthday of our health system – and much to thank its architects for.


This article is from the June 2013 issue of the PSA Journal. You can read back issues of the Journal by clicking here.