Both turnover and costs have been increasing over time. Costs for GPs rose by an average of 2.9 per cent a year between 2006-7 and 2020-21. Overall, the growth in costs for GP businesses was higher than for non-GP specialists and the growth in turnover was lower.
This gap has grown over time. Non-GP specialist businesses made 50 per cent more profit than GP businesses in 2020-21, compared with 10 per cent more in 2006-7.
Impact of COVID-19
Though there was an initial concern about the viability of medical businesses during the pandemic, support from telehealth and the government’s Job Keeper payments meant the number of closures actually fell during the 2019-20 financial year and this support helped maintain turnover.
There has been continued net growth in the number of medical businesses throughout the pandemic. Though profits initially fell during COVID-19, they have since increased due to pent-up demand, especially for non-GP specialists.
However, medical businesses experienced sudden increases in costs as they adapted to COVID-19 settings. For GP businesses, costs increased 4.1 per cent between 2018-19 and 2020-21.
Medical businesses have shown they are flexible and can adapt and recover to maintain profitability and the provision of medical care, with government support. It is expected demand will remain high for private medical care provided by GPs and other specialists as people who delayed care and treatment during the pandemic return to seek care.
Medical businesses, in particular non-GP specialists, remain very profitable compared with other businesses such as law, accountancy, finance, construction and agriculture.
Comparison of profitability across different industries, 2020-21