Pioneer Of Private Health Insurance

Sydney Morning Herald

Tuesday April 26, 2005

Peter Golding, Gai Scott and Patricia Batistic

John Francis Cade

Founding general manager of MBF

1916-2004

Jack Cade lived in an era when hats were an important part of a man's dress, so when he lost his hat on the first day of what was going to be a long overseas trip, it was a matter for concern. Fortunately, he knew exactly where he would have left it - in what was then called the Qantas VIP lounge. He wrote a letter to the Qantas hospitality officer asking him to make sure it was returned.

Months later he remembered the hat. He telephoned the officer, who said it was strict Qantas policy that all lost property had to be sent to the Department of Civil Aviation, so that was where he should make his inquiry.

Cade was not to be put off. He knew a little about these things, he said, because he ran a big organisation which also had lots of rules, some of which were not always observed. Maybe the Qantas rule on lost property had been overlooked in the instance of his hat. He could envisage, he said, the responsibility for it drifting from the staff on one shift to the staff on the next shift and then maybe ending up under a counter some place.

He would like the officer to take a look under the counters and please telephone him back. It took a little persuasion but, reluctantly, the officer did as asked. A few minutes later Cade's telephone rang. The officer was speechless. Cade's hat was under the counter.

The point of the story is not that John Francis Cade, the former chief executive of MBF who has died at the age of 88, was a stickler for detail, which he certainly was, nor that he had a sometimes perverse sense of humour, which he certainly did, but rather to underscore his understanding of the significance of the human element in every business organisation.

Cade was a captain who spent a lot of time in the engine room. His face was as familiar to staff on the front desk or in the branches as it was to colleagues in the boardroom. And he knew them by name, and precisely what they did. He also knew a lot about his customers because he never missed a chance to talk to them. It was made easier because he was a naturally warm, friendly and courteous man with old-fashioned customs and values.

The name of Jack Cade is synonymous with voluntary health insurance in Australia and is respected wherever the concept of the healthy helping to pay for the sick is a policy or an inspiration. Cade dedicated his working life to this idea and was its foremost pioneer.

Cade was general manager of the Medical Benefits of Australia (MBF) from its inception shortly after the end of World War II until his retirement in 1982.

The fund's origins go back to 1947 when 1000 doctors in NSW each subscribed ##10 to establish an organisation to offer private medical health insurance. Cade, then 28 and the accountant at the Hospitals Contribution Fund of Australia (HCF), was not long out of the army, from which he had been discharged with the rank of lieutenant. His father had been a soldier and had been killed at the Somme before Cade was born in 1916.

The 1000 doctors gave Cade the task of putting their money to work. He was the fund's first employee and the first to be registered as a subscriber. When he retired, MBF was one of the world's biggest private health insurance funds with millions of subscribers, thousands of employees and a national network of branches.

Cade saw the bigger picture. Inevitably, therefore, he was always an industry leader, frequently the leader. He played a key advisory role in the Menzies government's decision to consolidate hospital, medical and pharmaceutical benefits and the pensioner medical service under the National Health Act of 1953.

Eight years later he was instrumental in bringing MBF and HCF together in a fund called the Hospital and Medical Benefits (Management) Pty Ltd. The fund was successful but internal differences resulted in its disbandment in 1963. As a consequence, Cade broadened MBF's base to include medical and hospital insurance.

MBF expanded rapidly and became the dominant force in private health insurance, carrying with it, for Cade, an increasing involvement in the national and international affairs of the industry and recognition as a world leader in the field and as a valued counsellor - often to the management of competitive funds.

He served for many years on committees of the Blue Cross Association of Australia and the Voluntary Health Insurance Association of Australia and was Australian representative on the International Federation of Voluntary Health Service Funds. His advice on voluntary health insurance was constantly sought by state and federal governments and by the federal and state branches of the Australian Medical Association.

The election of the Whitlam Labor government in 1972 brought monumental changes to voluntary health insurance in Australia. Their genesis was the appointment of a committee - the Deeble committee - to advise on the introduction of a tax-financed health scheme which in 1975 led to the establishment of Medibank.

Cade was convinced that because it would be perceived to be "free", such a health system would be more costly, would lead to overuse of health services, would result in a decline in the quality of medical and hospital services and would deprive patients of freedom of choice. So he fought it every inch of the way.

Without any serious support from a largely compliant federal opposition, however, it was always going to be mission impossible. He lost the fight but nothing happened subsequently to cause him to regret having fought it.

Medibank was introduced in July 1975, accompanied by a concerted campaign by the government to denigrate the voluntary system. Medibank cover was limited to 86 per cent of government-approved scheduled medical fees and standard ward care in hospitals. "Free" cover did not extend to intermediate or private hospital care or to para-medical or dental treatment. Cade's task, then, was to restructure MBF's cover to help contributors meet the cost of private medical and hospital treatment provided by the doctor or hospital of choice.

The dismissal of the Whitlam government and its replacement by the Fraser coalition a few months later brought even more changes to the health-care system, resulting in a further drastic restructuring of private health insurance. The new government introduced a health insurance levy, payable by all except pensioners and low-income earners who did not have private health cover, for basic medical and hospital benefits. This presented a huge task for all the funds but for Cade, at the head of the largest private fund, it was nothing short of horrendous. It involved the re-enrolment and individual classification of every one of the fund's hundreds of thousands of contributors.

Year after year more changes in government health policy were reflected in more altering of the system - now known as Medicare - with impact on the funds' operations, including the need to diversify services into other fields of health care to keep pace with community need and to cushion their rising administration costs. That the funds survived, and flourished, owes much to the strength of the foundations that Cade had laid half a century before and had worked tirelessly to strengthen throughout his working life.

Cade was never one to mourn lost causes or opportunities, no matter how he might have regretted them. But he did mourn the loss of a voluntary health system that he really believed had served Australia and Australians well and had provided the best possible solution to their health care needs. Nor was he one to say, "I told you so", but there must have been times when he was sorely tempted to do so as, in his retirement, he agonised over the constantly soaring national health bill, the decline in the prized doctor-patient relationship and the depersonalisation of health-care service in our surgeries and hospitals.

Cade is survived by his wife, Norma, and his sons, John and Richard.

* A memorial service will be held on Thursday at 1pm at St Stephen's Church, Macquarie Street.

© 2005 Sydney Morning Herald

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