Last year I read a fascinating article published by the monthly Le Monde Diplomatique on early health system initiatives in the United States’ Elk City and Canada’s Saskatchewan province https://mondediplo.com/2020/08/02populism-expertise. This got me to thinking about the small rural town of Kurow and its role in the establishment of New Zealand’s universal public health system in 1938.
Elk City is an American high-plains town in Oklahoma, a farming state that once had a lively progressive populist political streak. One of its initiatives, in 1929, was the launching of a cooperative healthcare system in which farm families would pay a modest sum each year for guaranteed access to doctors, dentists and a modern regional hospital. People, mainly farmers, who became cooperative members would elect a board to run its business side.
This system was the brainchild of one Dr Michael Shadid, a Lebanese immigrant who spent his career practicing among very poor American farmers. Dr Shadid had high medical standards but what set him apart from many in his profession was his criticism of the predatory way medicine was practiced in places like small-town Oklahoma, including its high cost and inaccessibility for many.
This led to the American Medical Association (AMA) to effectively declare war on him for daring to open a cooperative hospital arguing that it was unethical because it placed ordinary people in charge of business decisions. First, they unsuccessfully tried to get Shadid’s medical license revoked. Next, they reorganised the local AMA chapter without him in it, which had the effect of cancelling his malpractice insurance. Many doctors he tried to recruit were warned off.
Over the years the AMA fought and defeated proposals to democratise healthcare, including enhancing access such as when a medical cooperative was set up in Washington DC on the Oklahoma model. Doctors who wanted to work for it were threatened with reprisals.
President Harry Truman won the 1948 election with a campaign that had universal healthcare as his defining issue. But his subsequent attempt to introduce universal health insurance to address affordability and access was defeated due to an effective vitriolic and sensationalist well-funded campaign led by the AMA. This was the closest the United States has got to achieving a universal health system.
During the ‘great depression’ of the 1930s, as part of a rising progressive populist movement, a radical agrarian party called the Cooperative Commonwealth Federation (CCF) emerged in Saskatchewan and eventually was swept into power in 1944 led by the legendary Tommy Douglas. Re-elected many times many, either as a compliment or insult, regarded it as the first socialist government in North America.
The CCF went on to win many elections. In the 1960 election it successfully campaigned on establishing a universal healthcare system for the province whose population was less than one million. In July 1962 the CCF government launched what it called Medicare, its single-payer healthcare plan, the first in Canada.
In response, on Medicare’s first day, the province’s around 1,000 doctors who had controlled medical costs walked off the job. Tactics similar to those adopted by the AMA against the Elk City cooperative, were utilised including a massive media supported media campaign. The Chamber of Commerce also ripped into Medicare.
But Douglas and his government stared the opposition down. After the first initial wave of fear, support for the doctors evaporated. Some of the outrageous oppositional rhetoric, including a radio priest calling for blood in the streets, turned people off. Within a month the strike was over, and within five years every province in Canada had adopted a healthcare system like Saskatchewan’s. Today this system is a central part of the fabric of Canadian society.
Kurow is a small rural New Zealand town of just over 300 people in northwest Otago. It’s most well-known notable is Ritchie McCaw, one of the country’s greatest All Blacks. But there were two other residents who made a significant contribution to New Zealand’s universal healthcare system, the Rev Arnold Nordmeyer and Dr Gervan McMillan.
In the 1920s, Kurow was the base for the building of the nearby Waitaki Dam and forming Lake Waitaki as the first of a series of hydroelectric projects on the Waitaki River. In that decade these projects drove significant population growth in river connected rural towns such as Kurow although smaller than Elk City.
The first social security scheme for New Zealand workers was designed in Kurow in the late 1920s and early 1930s,. It arose from Nordmeyer’s experience of working with families of workers on the Waitaki hydro-electric project. Among those working with him was Dr McMillan who ran a medical practice in the town.
Kurow became the basis for New Zealand’s landmark social security legislation in 1938 which included moving to a universal public health system. Both Nordmeyer and McMillan were elected to Parliament in 1935 as part of the country’s first Labour government and played critical roles in the development of the legislation.
The British Medical Association (BMA), of which in the tradition of colonialism the New Zealand Medical Association was a branch, vigorously but unsuccessfully opposed the initiative although it managed to ensure the continuation of patient fees for general practitioner albeit it regulated.
Elk City’s cooperative healthcare system was confronted by powerful opposition including those in the medical profession whose high income they privately controlled. The cooperative spirit was sufficiently throttled by vested interests with sufficient power to thwart a sympathetic initiative from President Truman and to ensure that the United States remains the only economically well-developed economy without a universal health system.
On the other hand, while coming up against strong opposition, the small Canadian province of Saskatchewan and the much smaller rural town of Kurow were the laboratories for the establishment of universal health systems in Canada and New Zealand; something really to be proud off.
Public medicine and universal health systems have also gone a long way to undermine the influence of business greed on the ethical standards of the medical profession. The BMA is now one of the strongest defenders of the National Health Service in the United Kingdom including against privatisation threats. Medical associations in Canada and New Zealand support their respective universal health systems. In contrast the AMA continues to defend the indefensible.
Ian Powell was Executive Director of the Association of Salaried Medical Specialists, the professional union representing senior doctors and dentists in New Zealand, for over 30 years, until December 2019. He is now a health systems, labour market, and political commentator living in the small river estuary community of Otaihanga (the place by the tide). First published at Otaihanga Second Opinion.