The earliest involvement of the Australian medical profession in health insurance was the brainchild of Ronald Grieve (MBChM Sydney 1920), elected to the Council of the NSW Branch of the British Medical Association [now the Australian Medical Association (NSW) Limited] in 1937, and President of the Council from 1947 to 1948. From 1932 to 1934, he had been a member of the NSW Legislative Council.
Grieve had been approached by Dr Geoffrey Howe, who had asked a patient why she had not called him earlier. She had told him that she could not afford doctors’ fees. She died not long afterwards.
Until then, patients had, since 1934, been able to insure against the costs of hospitalisation, but not for medical costs. Howe, disturbed by her inability to pay for medical care, suggested to Grieve that something needed to be done.
Grieve, a member of the Branch’s medical assurance committee between 1938 and 1945, floated, in 1941, the idea of establishing a fund to reimburse subscribers’ fee-for-service medical bills. In October 1946, with a thousand members each contributing £10.
The arrival of Medibank
In 1976, the federal government’s Medibank, guaranteeing all Australians a refund on doctors’ fees, had come into effect. Until that time, most doctors had not charged for professional services to colleagues or to their colleagues’ families. The custom of the times was for doctor-patients to acknowledge their appreciation with a gift – often a bottle of whisky.
Medibank, however, funded by taxation and a special levy, meant that rebates became available when doctors treated other doctors and their families. This triggered the practice of doctors’ beginning to charge their colleagues the Medibank rebate. Private health funds were permitted to reimburse patients 85% of the fees in the Medibank schedule for doctors’ services performed in hospitals.
The AMA NSW establishes The AMA Health Fund
In 1976, Dr Phillip Cocks, representing the resident medical officers’ group on the NSW Branch Council of the AMA, suggested a way of resolving embarrassment on the part of both doctor-patients and their treating doctors, regarding the charging of fees. He considered that, if doctor-patients belonged to a health fund which paid the permitted 85%, there would be no need for embarrassment on either part.
He proposed that the AMA launch its own health insurance fund for its members. The AMA Health Fund commenced operating in 1977, initially in NSW, then in 1987, membership was opened to AMA members nation-wide. It was established as a restricted access fund for doctors.
In 2000, new legislation required that funds offer ‘gap’ insurance, namely, cover for the difference (in whole or in part) between 75% of the Medicare schedule fee and doctors’ actual fees. The AMA Health Fund then decided to offer rebates based on the AMA’s own list of services and fees, further reducing any embarrassment about treating doctors’ not being fully recompensed by their doctor-patients.
Change of name and new growth
In September 2005 the Fund changed its name to The Doctors’ Health Fund reflecting the separation from the AMA.
The Board, reviewing the lack of growth of the Fund, decided on a ‘thrive’ strategy, with aggressive recruitment of membership. From a coverage of 5,806 persons in 2004, the Fund by mid-2011, almost trebled in size, covering 15,135 persons.
In mid 2011 the Fund was approached by Avant, Australia’s largest MDO, and after lengthy negotiations an agreement was reached for Avant to acquire the Fund. This acquisition was completed in mid 2012 and at the same time the restricted access classes were extended to include a number of other health professionals including dentists, optometrists, physiotherapists and psychologists.
Medical Benefits Fund of Australia: The MBF Story: Celebrating 60 Years. MBF. 2006.
AMA Health Fund and Doctors’ Health Fund Annual Reports, 1996-2010