14 May 2018
Median hourly rates for medical specialists are slowing down relative to wage growth in the broader economy. However Australia’s medical specialists are covering an increasing volume of services, including those bulk billed.
These key findings are drawn from the annual ANZ-Melbourne Institute Health Sector Trends Report, commissioned by ANZ and led by University of Melbourne Professor Anthony Scott, drawing on the latest health care sector data to analyse trends and challenges facing the medical specialist industry.
"The sector remains strong, supported by robust drivers of growth such as demographics, demand and funding.”
While there are unique challenges ahead specialists are also poised to take advantage of their vital role in Australians’ health care and the ongoing growth of the largest sector in Australia’s economy.
The sector remains strong, supported by robust drivers of growth such as demographics, demand and funding.
Medical fees are in the spotlight, with perceptions some specialists are charging too much, as well as health funds and Medicare leaving people out of pocket at a time when they’re most vulnerable.
However, the question of fees – and how specialists earn – is a far more complex picture when you look into the detail. And as the report shows, there is significant variation across specialities.
While it is true specialists’ revenue has grown - a 4.1 per cent increase per year - this is largely due to growth in the volume of services provided as opposed to prices charged.
Interestingly, the growth is supported by a 5.2 per cent increase in bulk billing.
While specialists are providing a broader range of services to a larger number of people, growth in fee revenue has actually decreased by 0.15 per cent per year, in real terms, even taking into consideration the 5.5 per cent (above inflation) growth rate in out of pocket expenses where services are not bulk billed.
The existence and persistence of low-value care is putting pressure on the wider system.
“Continued increases in expenditure on healthcare… will need more evidence of high value healthcare being provided to Australians, as well as increased transparency and accountability,” Professor Scott says.
There are a number of initiatives underway in the industry to provide better information about what works and what doesn’t work, what it costs consumers and the health system and how the industry can help patients make more informed decisions.
These include the international Choosing Wisely campaign, ongoing reviews of what’s covered by Medicare and the push to link funding to performance.
Graduate doctor and specialist numbers have doubled in the last 10 years and continue to grow, with 15,000 specialists in training due to join the 30,000-strong specialist workforce over the medium term.
“Increased numbers will likely result in more competition, and this will be intensified if the pressure for fee transparency and better value healthcare continues” Professor Scott says.
Richard Grayson is Head of Health, Business and Private Banking at ANZ
Professor Anthony Scott leads the Health Economics Research Program at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
14 May 2018
26 Apr 2017