Part II of the Social Security Act of 1964 provides a wide range of benefits in respect of medical and hospital treatment and other related services. These benefits are usually referred to as “health benefits”, and are administered by the Department of Health under the direction of the Minister of Health. Prior to the passing of the Social Security Act, New Zealand had no nation-wide plan for prepaid medical or hospital services. It is true that voluntary groups, such as friendly societies, levied on their members for this purpose, and by arrangements with doctors and with hospitals were able to offer to members free or partially free, medical and hospital treatment. In the main, however, people made their own arrangements and met their own costs for medical and hospital treatment as and when the need arose. Doctors engaged in individual practice recovered their fees directly from their patients. Public hospitals charged patients at rates varying with the type of institution and with the ability of the patient to pay. For the completely indigent and those in straitened circumstances, private doctors often afforded out of compassion a measure of free treatment, and hospital boards administered relief under the Hospitals and Charitable Institutions Act. Such free treatment and relief were not obtained as rights; often people seeking relief had to undergo full investigation of their financial and other circumstances so that inability to pay could be proved. Many of the poorer people were too proud to disclose their poverty or accept charity and so went without adequate medical care. (The function of administering all classes of public hospitals other than mental hospitals is vested in district hospital boards. New Zealand is divided into 37 hospital districts, each under the control of a hospital board whose members, elected triennially, are representatives of constituent local authority districts within the hospital district.)
The inauguration of health benefits under the social security programme was thus long overdue and constituted a most necessary and sweeping reform. The benefits are available to all persons ordinarily resident in New Zealand, regardless of economic status. The scheme is non-contributory, benefits being available as of right irrespective of the amount, if any, of social security taxes paid by the recipients of the benefits. The right to benefits is restricted only in cases where a person receiving medical or other treatment is entitled to recover the expenses of such treatment by way of compensation or damages.
The Act provides for five general classes of benefits – medical, pharmaceutical, hospital, and maternity – and such supplementary benefits as are deemed necessary to ensure the effective operation of the aforementioned benefits or otherwise to maintain and promote public health. Benefits in respect of maintenance and treatment in State mental hospitals, both for committed patients and for voluntary boarders, were inaugurated on 1 April 1939. No special administrative arrangements were necessary to provide these classes of benefit, as virtually all mental hospital provision in New Zealand was already undertaken by the State.
Maternity Benefits. Commencing from 15 May 1939, medical services covering maternity work, including both antenatal and postnatal treatment, have been paid for at an agreed scale by the Department of Health, although officially recognised obstetrical specialists may charge the patient an additional fee. Mothers may have, free of charge, either public maternity hospital care or the services of an obstetric nurse during labour and for 14 days after childbirth. All private maternity hospitals accept the standard rates as part payment of their fees.
Hospital Benefits. For inpatients these benefits were inaugurated on 1 July 1939, and for outpatient treatment on 1 March 1941. Patients receive free inpatient and outpatient treatment in public hospitals. For those who arrange for treatment in private hospitals, the benefit payments normally cover only part of the charges, the balance being paid by the patient. Free maintenance and treatment is also provided in the State mental hospitals and in approved institutions such as the Karitane Hospitals for women and babies where both mother and child receive free treatment.
Also coming within the scope of hospital outpatients' benefits are artificial aids, which include artificial limbs, hearing aids, contact lenses, and other appliances for physical relief. The cost of repair of artificial limbs is borne by the State.
Medical Benefits. Under the General Medical Services scheme introduced on 1 November 1941, a doctor is paid from the Social Security Fund for each consultation at his surgery or at a patient's home, with additional payments for night and Sunday calls and milage fees. A patient either pays the doctor his full normal fee and then claims the appropriate refund from the Fund (supporting his claim with the doctor's receipt) or pays the doctor the balance of his fee above the social security payment, the doctor claiming the appropriate amount from the Fund. The doctor himself determines which procedure is to be followed. Some doctors accept the benefit (7s. 6d.) from the Fund in full satisfaction and charge nothing to the patient. General medical services do not include specialist services, but the patient may still claim 7s. 6d. for each consultation.
Pharmaceutical Benefits. These were introduced on 5 May 1941 and provide for the free supply of medicines and drugs on the prescription of any registered medical practitioner. The scheme is carried out by contracts between the Minister of Health and individual chemists who support their claims with the prescriptions which have been signed by the patients as evidence of receipt of the medicine.
The range of free pharmaceutical requirements is defined in a document known as the “drug tariff”, issued under the hand of the Minister of Health. The tariff imposes limits on the quantities of drugs which, as a charge on the Fund, may be issued on one prescription, and it sets out the prices and fees payable from the Fund to contracting chemists. The benefits are also available at the outpatients' department of some public hospitals, while in some remote country areas doctors dispense medicines under special arrangements.
Supplementary Benefits. These were introduced progressively from 11 August 1941 and include:
X-ray diagnostic services which are free if provided by hospital boards, and part paid if provided under specified conditions by radiologists in private practice.
Free laboratory diagnostic services if provided by a public hospital or by a recognised private pathologist who accepts the fee from the Social Security Fund in full satisfaction of his claim for his services.
Physiotherapy treatment given by private registered physiotherapists on the recommendation of a doctor. A fee of 5s. for each treatment is paid from the Fund provided the physiotherapist undertakes not to charge the patient any additional fees in excess of 8s. for each treatment afforded in the physiotherapist's rooms, or 13s. for each treatment elsewhere.
A free district nursing service.
Domestic assistance during incapacity for various reasons of a mother or in cases of undue hardship. In their present form the regulations provide merely for payments by way of subsidy to approved associations that have been formed for the purpose of providing assistance in homes. It is the duty of approved associations to engage domestic assistants to work as employees of the associations in homes to which they may be allocated by the association, in accordance with conditions specified by the Minister of Health.
Dental benefits. Dental treatment benefits are free and the services are provided by registered dentists or a State dental nurse in a State dental clinic, a contracting dentist, or a public hospital. At the present time benefits are confined to persons who are under 16 years of age or are enrolled patients.