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Industrial Relations in the Hospital and Medical Services Industry (II)

Dr B D Shepherd

The hospital and medical services industry has some features which are probably unique. The hospital Industry has a private component which is private, although the income of the surgeons who work therein is partly derived from government. The public component takes care of patients who are entirely funded by government, as well as those who are private but whose accommodation is heavily subsidised by government. In New South Wales, 65 per cent of the surgery performed on private patients is undertaken in the public hospital system. This is partly due to the fact that there are only 5 category one (first class) hospitals in the State and only 17 per cent of the State's hospital beds are in the private sector, many of these private beds being little more than nursing home standard without surgical backup. (This contrasts with other States, where 30-40 per cent of beds are in the private sector.)

Practice Outside the Hospitals

Due to an over-production of medical graduates, most of whom are in general practice, there is a marked over-supply of general practitioners in the city. Despite this, there are many quite large country towns with an under supply of doctors. This situation will worsen due to the unsatisfactory resolution of the Country Doctors' Dispute. It may be reasonably said that each State has at least one medical school too many.

Another anomaly is that, despite the overproduction of medical graduates, there is a shortage of resident medical officers in the public hospital system, especially in New South Wales. This is due to the poor conditions of service and poor remuneration of RMOs in this State. This has resulted in the State government importing sub-standard medical graduates to fill the vacancies left by the premature departure of RMOs from the public hospital system.

In this paper I wish to look at the inter-relationship between two professional groups---the medical profession and the nursing profession---in the public and to a lesser extent the private hospital system; to say something about the position of the Health and Research Workers' Union; to touch upon techniques of misinformation used by a government department in order to disguise poor performance; to examine the approach and position of the medical profession, especially in New South Wales; and to relate the effect on the community of the industrial position in the medical and hospitals industry and to speculate upon some remedies.

Nursing Profession

Not so many years ago some nurses paid to be trained, bought their uniforms and paid their board at the hospitals. Probably a majority worked for a few years after they graduated, then married and became lost to the profession. Today nurses are no longer trained in hospitals. They are trained in a classroom. There are many of us who are concerned about the preparation they receive for assuming clinical responsibility and for carrying out many of the arduous tasks required of the nursing profession.

Be that as it may, the nursing profession is a gentle one and as such has not been well cared for by its employer, the government. In many ways, their professional level of responsibility was used against nurses. This is an instance where proper care and attention on the employer's side may have averted a major disaster and, what is more, have prevented a great deal of power falling into union hands.

As the years went by, nurses became aware of a strong, well-led union, the Health and Research Workers, which was gaining increasing advantages for its members--- the cleaners, the domestics, etc. who work around the hospitals. It was not easy for a Sister to accept the fact that the cleaner, who appeared to do a great deal less work and work a great deal fewer hours and accept a great deal less responsibility, was receiving more income. Inevitably stronger elements took over the nursing unions. These elements sought (and eventually obtained, after a great deal of industrial turmoil, especially in Victoria) markedly increased rates of pay---rates which, as you can see from the paper of our earlier speaker, may not be sustainable in the industry. These victories by the leaders of the nursing profession have led to a new-found militancy which has flowed over into nurses' relationships with hospital authorities and the medical profession. This is not always to the advantage of the patient.

In addition, a new power-base has been established in the Colleges of Advanced Education. At one time the Matron of a hospital was at the apex of the whole career structure, but an alternate career structure has developed outside the hospitals in the colleges. This is an area for concern as nurse educators in the colleges become increasingly separated, both in time and distance, from the workface and professional reality.


In the past the medical student was taught almost exclusively, in his clinical subjects, by privately practising clinical doctors. These doctors gave their services without remuneration and indeed considered it a privilege to do so, this being very much in the Hippocratic tradition. In those days the students' heroes were almost always privately practising doctors. Today much more teaching comes from fully employed clinicians. Many more medical students and young graduates perceive their career structure as being in continuous employment---a relatively rare thing not so many years ago. Working against this, of course, are the poor conditions experienced by RMOs at the present time. On the other hand, there are many visiting medical officers who are regarded as privately practising doctors, who regard the takeover by government and nationalisation of the profession as inevitable and, for a variety of reasons, do not wish to put any energy into resisting this onslaught, preferring to jockey for the best possible position when the takeover occurs.

Visiting Medical Doctors

In his report following his Inquiry into Private Medical Practice in the Public Hospital System, Professor David Penington stated that the present difficulties between the medical profession and the government occurred with the advent of sessional payment, for what had been, up until then, honorary service to the public hospital system. Previously, Professor Penington said, the medical profession had enjoyed independence and been regarded with respect by hospital authorities; once payment was received, they began to be viewed by the hospitals as employees, less notice was taken of their advice and the rot set in. Sadly, in certain public hospitals, this loss of respect has resulted in an altered relationship with the nursing profession, some of whom feel they should be able to run a separate race; once again it is the patient who suffers. Fortunately, this relationship does not occur in all hospitals and is perhaps seen least in the private hospital system.

As a result of the Macken Determination in New South Wales, relatively generous sums of money were allocated for some work in certain specialities, to visiting medical officers in the public hospital system. In particular instances, the reward for giving the same service in the public system is much greater than that imparted by the fee commonly charged to buy such a service in the private system. As a consequence, there is a reduced disposition toward private practice in this area. From a community point of view this is not good, as almost invariably a service given in the public hospital system costs the community twice as much as it does when given in the private system.

Resident Medical Officers

As stated earlier, RMOs' conditions of service are untenable: many are expected to work more than 48 hours at a stretch; they are poorly paid; they have an uncertain tenure of employment; many are asked to take responsibility beyond their training; they are unhappy about postgraduate instruction; and they are frightened to claim the overtime they work for fear of adversely affecting their career opportunities (there are many anecdotes of threats made by hospital executives in this regard). All in all, the resident's lot is not a happy one and many are voting with their feet, leaving vacancies in the public hospital system. Many indeed are abandoning the profession altogether---something which would have been almost unheard of a few years ago.

Health and Research Workers' Union

This is a strong, well-led union which has obtained good conditions for its members by successful negotiation with a minimal creation of industrial turmoil. Unfortunately, the productivity of this element in the public hospital system is not high. In general it can be calculated that the same services in the public hospital system done by contract labour would cost about half as much. As has been said earlier, this union's success has been partly responsible for the unrest in the nursing profession.


In the public hospital system the employers are represented by an over-burgeoning bureaucracy: at last count, for every doctor, nurse and therapist, there were 3.5 clerks, administrators, domestics, cleaners, etc. As is usually the case, the administrators have an ill-defined work description and have much time, should it be their wont, to impose increasing controls. They are responsible for ever mounting red-tape, paperwork, etc.

The result is an over-bureaucratised, inefficient, poorly motivated public hospital system, with the previously main driving forces---the medical profession and the nursing profession---somewhat dispirited and frustrated.

Public Image of Public Hospital System

Possibly the truth will out, but in many instances it takes time. Gradually the NSW public is realising the faults of the public hospital system. There has been a major cover-up by the Health Department and the Minister. We have only to look at a few instances of this. Consider a set of graphs from the Hornsby and Kuring-Gai Area Health Board. A normal, intelligent, educated person glancing at these graphs would gain the impression that the productivity of the operating theatres, delivery rooms, etc. was on a steady rise. It is only if we look carefully at the time-scale beneath that we see that the years start from 1987 and go back to 1983. In fact, productivity, etc. is well down. I have not found one person yet, amongst scientists, clinicians, etc., who has seen graphs drawn this way before. It is only in the last two years that graphs have been presented in such a fashion in this report. We go to another page of the report where the figure of roughly 400,000 occasions of service is cited: this is frequently used by the Minister as a yardstick of the productivity of the public hospital system. Time and again he has said that the services given by the public hospital system have risen remarkably since the Dispute and even prior to it. It is only when we identify what he regards as services that we realise the mendacity of this. We see that under the heading of 'lifestyles', there has been a rise from approximately 7,000 to around 24,000. On inquiry it transpires that 'lifestyles' is when a group of healthy people meet together with a nurse and do a few exercises or whatever. For you and for me a service from the hospital implies something concrete like a casualty treatment, an operation, a delivery. It would be just as honest---indeed more so---to take as an occasion of service every time a nurse washed a patient's back, cleaned up a bed, etc. If we look at the true indices of hospital service, we note that there has been a very real reduction in productivity---for instance, operations have been reduced by almost 40 per cent. What I am saying is that you just cannot trust the propaganda put out by this government department (and in all probability by most government departments) of State.

What of the Future?

The NSW Branch of the AMA has a strongly committed high quality team, many of whom are fairly battle-hardened and who are motivated by a desire to help the profession rather than to accept the accoutrements of office. Much has been initiated to protect the profession, to make it more efficient and better able to serve its patients. Much more has to be done. It is the intention of the Hawke Government to introduce in the Budget Session of Parliament legislation to establish a participating doctors' scheme. In brief, this means that if you, as a patient, attend a doctor who does not adhere to the government fee structure, you will not be eligible for the Medicare rebate. In other words, the doctor's fee will have to come out of your pocket. Many people will be unable to afford taxation, the Medicare levy and fees as well. The intention is to achieve control of the profession. Canada has this system, as also has Albania; they are the only two countries in the world where such control of the medical profession exists.

If, as is likely, there will be a strong influence on the Federal body of the AMA by the middle of the year, that body will undertake to prevent this legislation being imposed.

I believe that a great deal can be done by the community at large, and especially by members of The H R Nicholls Society, to help other members. There is no doubt that a public statement made by somebody of some standing outside the profession has much greater influence than if I sound off. Indeed what happens to the profession very strongly affects the community.

At the present time the case for truly Liberal Government, for a less interventionist government, is being very poorly put. We need to examine what can be done by way of communication to remedy this. We need to show more courage than we have to date in pursuing what is right and just. If we do not, we will have imposed upon us a society we deserve.

Why HR Nicholls?