Evaluation of the Medical Specialist Outreach Assistance Program and the Visiting Optometrists Scheme

3.5 Specialist private practice viability and workforce distribution

Page last updated: 28 February 2012

Across Australia, specialist medical services are provided by both private medical practitioners working in private practice and by specialists and registrars employed by public hospitals. The precise mix between services delivered by private medical practitioners and hospital employed doctors is difficult to estimate (see discussion below), although overall, services provided by private medical practitioners working in private practice are much more significant than public hospital based medical services.
There are several ways in which the ‘mainstream’ arrangements for financing and providing specialist medical care lead to structural imbalances in access to private medical practitioners.

The main method through which private practice specialists receive income is through the Medicare Benefits Scheme (MBS), although this is supplemented by out of pocket payments by patients and private health insurance gap payments (mostly for hospital services). One underlying factor (amongst others) influencing the distribution of specialist medical practitioners is the extent to which a private practice will be financially viable. This requires an adequate volume of patients, which is often a challenge in many regional settings, and even more challenging in more remote regions.

In addition to consulting with patients in their office practice, private specialists will typically treat patients in hospital, both public (as a Visiting Medical Officer) and private. In many rural and remote localities, local hospitals are not always equipped to manage patients with more complex problems. These patients are often referred to hospitals in major regional or metropolitan areas. This pattern of provision also weakens the financial viability of private practice in many rural and remote localities.

Another factor impacting private practice viability is that in rural and remote areas there is a significantly lower portion of the population that have private health insurance. After accounting for the effects of age, people in major cities are 27% more likely to have private health insurance and 23% less likely to have a health-related concession card than people living outside of major cities (ABS 2011b).

In addition to economic issues, there are many professional and social reasons that impact on decisions by specialists on where to locate their services.
Similar issues apply in relation to private practice optometry and allied health services. Private practice in many regional and remote areas is often not viable for these service providers.

The overall impact of these factors is that access to private specialist medical services, optometry and allied health services is significantly lower in rural and remote regions, which can be demonstrated through analysis of MBS expenditure data.

Overall, MBS expenditure per capita declines with remoteness (see Table 17). Per capita expenditures for inner regional areas are around 84% of major cities. These ratios decline further with greater levels of remoteness to the point where per capita expenditures for people living in very remote regions are around 54% of those for people living in major cities.

Table 17 – Relative per capita MBS expenditure by remoteness (major cities = 1.00), 2006–07

Expenditure type

Major cities

Inner regional

Outer regional

Remote

Very remote

Total

Benefits paid

1.00

0.84

0.75

0.65

0.54

0.94

Out-of-pocket amount

1.00

0.83

0.72

0.58

0.40

0.93

Fees charged

1.00

0.84

0.74

0.63

0.51

0.93

Source: AIHW 2011a, p.18


MBS benefits include expenditure on GPs and a range of other services subsidised under Medicare. A closer examination of per capita MBS expenditures for specialist related medical services is shown in Table 18. Across most categories, levels of service provision are lower in regional centres and are even lower for remote and very remote regions. For specialist services provided out of hospital, per capita services are 74% of major cities in inner regional areas, falling to 30% in very remote regions.

Obstetrics is an exception to this pattern, where per capita services are generally higher in inner regional and outer regional areas than for major cities.

Table 18 – Relative per capita MBS services provided by remoteness, 2006–07

 

Major cities

Inner regional

Outer regional

Remote

Very remote

Total

Out of hospital services

Specialist

1.00

0.74

0.59

0.38

0.30

0.89

Obstetrics

1.00

1.23

1.36

1.03

0.69

1.07

Radiation and other

1.00

0.81

0.66

0.51

0.40

0.92

Imaging

1.00

0.89

0.82

0.65

0.47

0.95

In hospital services

Specialist

1.00

0.76

0.58

0.49

0.34

0.90

Obstetrics

1.00

0.80

0.84

0.72

0.44

0.94

Operations

1.00

0.82

0.70

0.57

0.43

0.92

Radiation and other

1.00

0.74

0.64

0.53

0.43

0.90

Imaging

1.00

0.82

0.66

0.59

0.41

0.92

Source: Adapted from AIHW 2011a


Access to both allied health and optometric services funded under MBS show the similar patterns to specialist services in relation to remoteness (Table 19). The use of allied health in particular drops off very rapidly with remoteness, where people in very remote locations only access 9% of the allied health services available to people in major cities.

Table 19 – Relative per capita MBS out-of-hospital services for optometry and allied health services by remoteness, 2006–07Top of page

Services per person indexed

Major cities

Inner regional

Outer regional

Remote

Very remote

Total

Optometric

1.00

0.98

0.93

0.79

0.67

0.98

Allied health

1.00

0.75

0.45

0.24

0.09

0.88

Source: Adapted from AIHW 2011a


Another perspective on these issues can be obtained through examining the location of the medical workforce across remoteness areas (Table 20). Other than primary care practitioners, all medical fields have significantly fewer full time equivalent (FTE) workers per 100,000 population. Of particular note are the disparities in the specialist and specialist-in-training workforce outside of major cities. Even in inner regional locations there are fewer than 50% of FTE specialists and 30% of specialists-in-training. In remote and very remote locations the specialist and specialist-in-training workforce drops further to below 20% of that in major cities.

The data indicates that most specialist medical practitioners are concentrated in major cities, and that as remoteness increases, the availability of specialist services decreases.

Table 20 – Medical workforce full time equivalent (FTE) per 100,000 by remoteness, 2008

Workforce category

Major cities

Inner regional

Outer regional

Remote/very remote

Clinician

352.5

208.0

176.8

183.4

Primary care practitioner

104.8

99.5

95.4

112.5

Hospital non-specialist

48.3

24.1

21.4

35.0

Specialist

131.8

63.8

43.9

22.8

Specialist-in-training

63.0

18.5

14.6

11.7

Other clinician

4.3

2.2

1.5

1.6

Non-clinician

24.1

9.2

10.3

12.3

Total

376.2

217.4

186.9

195.5

Source: Adapted fromAIHW 2011a Notes: FTE is based on a standard full-time working week of 40 hours



To some extent the pattern of MBS expenditure is partly offset by expenditure on public hospital services and a range of programs designed to address these gaps (see following Chapter). This is illustrated in Table 21, which shows estimated age standardised per capita expenditures for major program areas by remoteness area. It is important to realise that this analysis is based on where the patient lives, not where the service is located/provided.

While expenditures on Medicare (MBS) services declines with remoteness, expenditures on admitted patient services increases. In addition, Commonwealth Government expenditures on Aboriginal Community Controlled Health Organisations partly offset the deficits related to MBS expenditures.

Table 21 – Age standardised per person (selected) health expenditure, current prices, 2006–07

Area of expenditure

Major cities

Inner regional

Outer regional

Remote

Very remote

Total

Admitted patient services in public and private hospitals

1,321

1,361

1,471

1,816

2,609

1,369

Medicare services

761

636

567

483

390

711

PBS (and section 100)(a)

321

317

306

302(a)

302(a)

318

Grants to ACCHOs(b)

4

10

39

263

233

14

Total

2,406

2,324

2,383

2,864

3,534

2,412

Source: AIHW 2011a, p.31
(a) The PBS (and section 100) estimates for the remote and the very remote categories are based upon the combined remote and very remote result. Data limitations prevent specific totals from being calculated for the respective geographical classifications.
(b) Aboriginal Community Controlled Health Organisations. The results for ACCHOs are not age standardised due to data limitations.



As Table 22 indicates, per capita hospital expenditures increase significantly by remoteness. However, further analysis of hospital expenditures shows this increase is entirely due to higher levels of expenditures on public hospital services. Private hospital expenditures are significantly lower for people living in regional and remote Australia (Table 22).

Table 22 – Expenditure on admitted patient services including in-hospital medical services by public/private hospital and remoteness, 2006–07

Hospital type

Major cities

Inner regional

Outer regional

Remote

Very remote

Total

Public

1.00

1.10

1.28

1.68

2.51

1.08

Private

1.00

0.84

0.66

0.52

0.40

0.93

Total

1.00

1.01

1.07

1.29

1.82

1.03

Source: AIHW 2011a, p.41


As mentioned above, the higher level of public hospital services for people living in rural and remote areas partly offsets lower private specialist services. However, it is important to note that many of these hospital services involve patients who live in regional and remote areas being treated in hospitals located away from where they live. Top of page