22
Oct
2019

Remembering Richard Scotton, co-founder of Medicare

by Stephen Duckett


This eulogy was delivered by Stephen Duckett at a commemorative service in Melbourne on 22 October 2019. Stephen Duckett was deputy to Dick Scotton in the Health Commission of Victoria in the 1980s and is now Grattan’s Health Program Director.

The grave of the architect of London’s St Paul’s Cathedral, Sir Christopher Wren, in that cathedral, carries the inscription: ‘He lived not for himself, but for the public good. If you seek his monument, look around you’.

Exactly the same can be said of Dick Scotton. If you carry a Medicare card in your pocket, you do so because of his work, his strategic vision, and his meticulous attention to detail.

The history is well known, partly told by Dick himself (Scotton and Macdonald 1993; Scotton 2000), of how Dick and his collaborator, John Deeble, reshaped Australian healthcare. Dick came to what was then the Melbourne Institute of Applied Economic and Social Research in the early 1960s, and teamed up with John Deeble to conduct a survey of families’ experiences of health costs (Deeble and Scotton 1968). Dick was responsible for the medical side, John for hospitals. They documented the real problems of their time – the sample was drawn from health insurance claims over the period 1965-66. For the nerds present, the report of the survey says that they wrote the computer program for the analysis; I suspect it was Dick who wrote that program. This work formed the basis of Dick’s PhD thesis, which he submitted in 1970, after his policy ideas had already started to gain political traction.

Dick was working in an applied research institute, led by a very practical economist, Ronald Henderson. Dick fitted well into that milieu and was not one to simply admire a problem. He was resolutely committed to tackling the problems he had discovered.

So Dick, with John Deeble, embarked on a journey that took them to Moss Cass’s lounge room, and the famous meeting with Gough Whitlam. Gough embraced the model of universal health insurance that they had crafted. What became known as Medibank was promoted and pursued by Labor in the face of vicious and nasty opposition from the AMA and private insurers. Along the way Dick went to Canada to study the newly developing system of public universal health insurance there. He and John adapted Canadian Medicare to the quite different nature of Australian federalism. And when Labor was elected in 1972, Medibank was a high priority for implementation. The scheme Dick and John designed is with us today, with only a few tweaks.

Dick immersed himself in Medibank implementation and was chair of the Health Insurance Commission, the specially created administrative agency designed to ensure the new scheme would be implemented and not buried in bureaucratic quicksand. Dick was the one for detail: the careful planning, the meticulous attention to the information system which enabled the bills to be paid on time, and the thought and care about how bulk-billing would work. Bulk-billing was a new concept back then, but now it is how over 80 per cent of general practice visits are paid for. Dick, as the principal designer of the medical side, with John doing state hospital negotiations, also took some profoundly important decisions, for example on including optometry and ensuring that surgical abortion would be covered by universal health Insurance right from the start.

As we know, Medibank was dismantled under the Fraser government, which must have been a great sadness for Dick, but was reintroduced as Medicare in 1984. Medicare is still with us – and stands as Dick’s finest achievement.

By then, Dick was a public servant again, this time working in the Health Commission of Victoria. The commissioners back then probably could not believe their luck when Dick applied for the job as the first director of planning. Dick helped shape the new organisation and drove needed reform of Victorian health services. I had the privilege of working for Dick for most of the 1980s. I saw firsthand his foresight and vision, his attention to detail, his zeal for improving healthcare and health care management. In somewhat unhappy circumstances, Dick left the Health Commission to accept a senior role in Victoria’s relatively new Accident Compensation Commission. Again, he threw himself into this role and helped to shape Victoria’s new Workcover arrangements. Dick did not lose his reforming zeal in the move and when I suggested that he might be involved in a trial of what became known as activity-based funding, he quickly understood the importance of such a development. What we did was try out paying for care in Victorian public hospitals for compensable patients using Diagnosis Related Groups. That helped us work out how this newfangled system – of paying on the basis of patients treated rather than inputs such as days of stay – might work, and set the scene for wider implementation in Victoria a few years later.

Whether it was this experience or just Dick’s natural curiosity, support for evidence-based reform and economic common sense, Dick became an avid supporter of activity-based funding and he, with Helen Owens, wrote an extensive and extremely thorough report on how activity-based funding of hospitals might work. It is still a useful reference today (Scotton and Owens 1990). So, a second of Dick’s legacies is his contribution to the development of activity-based funding, a system now used nationally to pay for public hospital care.

Another of Dick’s contributions, from what other’s might deem a retirement, was a contribution to political and bureaucratic history – namely his fascinating account of how Medibank came into being. With his co-author, Christine Macdonald, he combined his insider knowledge and careful historical research to give us all an insight to how this tremendously important policy initiative became a reality.

I first met Dick in the 1970s when a group of a dozen or so of us formed the Health Economics Group. We met in a basement room at University House in Canberra. Dick was always a thoughtful contributor, guiding and developing us with his wise commentary. A few weeks ago I had the privilege of speaking at the Australian Health Economics Society meeting here in Melbourne. There were more than 200 health economists present. Dick would have enjoyed the meeting and could claim with pride that he, as one Australia’s first health economists, had established this discipline and shaped its early development.

Finally, I would like to say how generous a boss and mentor Dick was. Not only to me, but also Helen Owens and others way back then when we were younger economists establishing ourselves in the discipline and learning how to shape and influence policy. I well remember one of his sound pieces of negotiating advice: put yourself in their shoes. In talking to others since Dick’s death, I was reminded by another of his mentees how Dick was well ahead of his time in the way that he encouraged and respected the contribution of women.

Dick Scotton multi-faceted contributions to Australia were appropriately recognised in 2000 by his being appointed an Officer in the Order of Australia. The citation for that award was broad: ‘For service to social reform as a leading health economist and policy analyst, particularly through the development of the Medibank scheme’.

Dick’s legacy lives on in his mentees, of course. But it is the Medicare card in your pocket, the taken-for-granted physical symbol of the institution he created, Australia’s universal and much loved health insurance system Medicare, which touches every Australian, which should be his proudest achievement and greatest legacy.

 

Deeble, J. S. and Scotton, R. B. (1968), Health care under voluntary insurance: report of a survey (Melbourne: Institute of Applied Economic Research, University of Melbourne).

Scotton, R.B. (2000), ‘Medibank: From conception to delivery and beyond’, Medical Journal of Australia, 173, 9-11.

Scotton, R.B. and Owens, H.J. (1990), Case payment in Australian hospitals: Issues and options (Melbourne: Public Sector Management Institute, Monash University) 294.

Scotton, R.B. and Macdonald, C.R. (1993), The making of Medibank (No. 76; Sydney: School of Health Services Management, University of NSW) 320.