After around 20 years of expansion in medical workforce supply (Geffen, 2014), what are the key issues facing the medical workforce today? When producing more doctors, it is essential to ensure the additional doctors are used to meet the population need for healthcare, rather than reinforcing a paradox of overtreatment and overdiagnosis for some of the population existing alongside undertreatment for those most in need. This includes trying to get the ‘right’ balance of the medical workforce between urban and rural areas, between specialties, and between generalism and specialised care. Flexibility and adaptation are central to this, and are key ongoing themes of the new National Medical Workforce Strategy.
Flexibility of the medical and healthcare workforce has been essential during the COVID-19 pandemic. Many doctors have experienced significant changes to their workload and practice patterns and many have bounced back, recognising that much has changed. The flexibility and adaptation of health care providers is essential to ensure the appropriate supply of medical care in ‘business as usual’ times, as well as during future pandemics and natural disasters.
Our latest ANZ-Melbourne Institute Health Sector Report ‘The Evolution of Medical Workforce’ analysed the latest data on key economic trends affecting the medical workforce.
The number of doctors continues to grow and in 2019 exceeded 100,000 for the first time, with the number of non-GP specialists growing faster than the number of GPs (4.5% per year vs. 3.5% per year). Population growth is half that at 1.8% per year.
Flooding the market has meant that higher numbers of doctors in training and non-GP specialists are beginning to spill over into rural areas. More doctors are working outside of major metropolitan areas. Growth in the number of doctors outside major metropolitan areas outstrips the growth inside these areas for all doctors except for GPs. This is despite decades of policy targeted to persuade more GPs to go rural.
Spillovers into rural and regional areas could be caused by increased supply and competition pushing doctors out of major cities. There has also been increased investment in regional training of GPs and non-GP specialists and other policies that help pull doctors away from major cities. In addition, spillovers could be caused by existing non-GP specialists spending more time in public hospitals so reducing job opportunities for newly qualified non-GP specialists in major cities.
A stated national policy objective is self-sufficiency of the medical workforce, but the number of international medical graduates (GPs and non-GP specialists) continued to grow faster than the number of domestically trained GPs and non-GP specialists until the end of 2019. COVID-19, however, has sharply reduced total immigration into Australia, though medical practitioners remain on the new Priority Migration Skilled Occupation List introduced in late 2020. International medical graduates are likely to remain the backbone of the rural medical workforce in the future.
Specialty choice remains an issue, as applications for GP training places fall and the number of specialists continues to grow faster than GPs. Non-GP specialists earned almost twice as much as GPs, with their earnings growing twice as fast such that the gap between GP and non-GP specialist earnings has widened over time, probably aided by the Medicare Fee Freeze. The earnings gap is likely to widen further as there are no specific national policies to address this.
Annual fee revenue per doctor has been falling over time. The most likely reason is that the number of GPs and non-GP specialists (supply) has been growing leading to more competition, whilst the number of patients per doctor (demand) has been falling even as the population increases. The Medicare fee freeze and fall in growth of private hospital care could have contributed to this.
Whilst fee revenue has been falling, doctors’ self-reported annual earnings (after practice costs and before tax) have been increasing. This suggests that doctors are managing to maintain their take-home pay by either reducing practice costs per doctor or increasing income in other ways.
Doctors have also been slowly changing their billing patterns over time, with higher rates of bulk billing, especially for non-GP specialists, as well as higher fees charged for non-bulk billed services. This is likely to reflect lower fees and more bulk billing for less affluent patients balanced out by higher fees for more affluent patients.
Telehealth consultations continue to be used and funding has been extended to the end of 2021, but their use overall has been slowly falling. Video consultations are still used much less than over the phone, though are more likely to be used by non-GP specialists. For GPs, the proportion of attendances using telehealth for GP Mental Health Plans and Chronic Disease Management Plans are slightly lower than for usual GP visits, suggesting no additional need for telehealth for these specific patient populations.
The use of Level A (short) telehealth consultations remain high and are much more likely to be phone calls. This suggests an unmet need for these short consultations, likely to be for follow up, test results, repeat prescriptions, and saves tens of thousands of patients the inconvenience of a face-to-face visit. Medicare telehealth funding is expected to be continued in the longer term where there is a need from patients, and higher rebates for video consultations could help to increase their use by GPs. However, there remains little new evidence on the appropriateness of telehealth.
Medical practitioners have continued to adapt to significant increases in medical workforce supply as well as COVID-19. Increased supply leads to more competition, and the effects of this are beginning to be seen as doctors spill over into rural and regional areas and increasing pressures on fee revenue. But after 20 years, issues such as specialty choice have not been addressed, rural practice needs continued support, and the benefits of telehealth need to be better utilised.
Acknowledgement
The ANZ-Melbourne Institute Health Sector Report is funded by Australia and New Zealand Banking Group Limited. Thanks for assistance from Mr Terence Bai of the Melbourne Institute: Applied Economic & Social Research at The University of Melbourne.
Anthony Scott leads the Health and Healthcare theme at the Melbourne Institute: Applied Economic and Social Research at the University of Melbourne. He is an Associate Editor of Journal of Health Economics, and Health Economics, past President of the Australian Health Economics Society, and Board Director of the International Health Economics Association.
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