The growing status of medicine increased popular demand for medical practitioners. However, consultation fees were too expensive for many. In the early 1930s the standard fee was 10 shillings and sixpence – this was costly for a working person earning £2 (40 shillings) per week. Friendly societies provided a way for lower-middle-class and working-class families to access medical care through a weekly payment to the society. Societies paid doctors a moderate fee per person for looking after a family over a 12-month period.
Friendly societies were popular and had many members, so it was hard for GPs to avoid providing health services to them. The clubs drove a hard bargain. One irritated doctor wrote: ‘The majority of thrifty members of the community belong to clubs … These are people who think they ought to receive the best possible medical and surgical attention and skill at the lowest possible remuneration.’1 Some doctors resented effectively being employed by people they saw as their social inferiors.
In the early 20th century access to medical care became a political issue. The first Labour government (elected in 1935) wanted to give all New Zealanders state-funded, universal access to health care. The establishment of a national health system was a major priority and one that promised huge political benefits for Labour.
GPs also wanted reform, but for very different reasons. They wanted to give their patients access to an increasingly sophisticated range of services in public hospitals, which reform of maternity services, in particular, would provide.
The government’s plan was to pay GPs a fixed fee to cover all consultations, rather than the traditional fee for service (a payment for each consultation). This would have substantially undermined the entrepreneurial activities of GPs, leaving them as little more than salaried civil servants. They reacted to this scheme with almost unified hostility, and were determined to maintain the fee-for-service system and to have private patients. They lobbied for a system that would allow patients to have their medical bills refunded by the Department of Social Security.
Although maternity benefits, which gave GPs free access to hospitals for deliveries, were introduced in 1939, there was no agreement with the government regarding general practitioners until 1941. After 1941 GPs retained their autonomy and the fee-for-service system. They were paid 7 shillings and sixpence for each consultation and could charge an additional fee on top of the state subsidy. In return, the government got a system that was largely free for patients. At the time, GPs rarely charged more than the government’s subsidy.
Once the government began paying for doctor visits and for maternity care, GPs had an overwhelming advantage over alternative therapists. Only chiropractors survived in any numbers on the edges of the medical market without state subsidies. Sophisticated pharmaceuticals increased dependence on doctors, who had a monopoly over prescribing.
The government’s failure to implement the population-based primary health system in the 1930s and 1940s had dramatic implications for health-care funding and reform for the rest of the century. The government subsidy paid to GPs did not rise with inflation, and direct patient fees increased accordingly. Patient fees created a two-tiered health system where the free public hospital system remained substantially distinct from the primary health care system.
By the late 1970s the standard one-doctor practice was being replaced by group practices and medical centres, which brought together a number of GPs, other health practitioners and support staff under one roof. This improved the support available to GPs and allowed them more family and recreational time.
Quoted in Rex Earl Wright-St Clair, A history of general practice and of the RoyalNew ZealandCollege of General Practitioners. Wellington: Royal New Zealand College of General Practitioners, 1989, p. 15.