Medical specialists’ prices decline – ANZ-Melbourne Institute report
Medical specialists are increasingly bulk-billing and providing more services to patients but their median hourly earnings are increasing at a slower rate than wage growth in the broader economy, according to the ANZ-Melbourne Institute Health Sector Report.
The report, led by Professor Anthony Scott, shows the size and funding of the specialist sector is growing faster than population growth and inflation, with growth in specialist numbers five times that of GPs.
This is the second in a series of health sector-specific reports commissioned by ANZ, researched and written by the University of Melbourne, and follows the inaugural report in 2017 which examined General Practitioners (GPs).
The report shows that in real terms, specialists’ prices fell by 0.15 per cent per year over the 10 years to 2015-16, while total revenue grew for the sector. This was due to the volume of Medicare services provided by specialists growing 4.3 per cent per year.
It also shows older specialists have reduced their share of hours in the private sector, while hourly earnings, work-life balance and job satisfaction are highest for those working solely in the private sector.
The number of medical graduates has doubled, with 15 000 specialists in training joining the 30 000-strong specialist workforce, outstripping population growth and inflation.
“Increased numbers will likely mean more competition, intensified if the pressure for fee transparency and better value healthcare continues,” Professor Scott said.
While the report shows revenue from private specialist services grew 4.1 per cent per year, it is largely from growth in the volume of services rather than higher prices charged – the growth in fee revenue per service was negative at -0.15 per cent per year in real terms.
There has been a 5.2 per cent increase in bulk billing but where services are not bulk billed, out-of-pocket expenses have grown at 5.5 per cent above inflation each year.
Specialists’ median hourly earnings increased just more than 1 per cent per year, which is lower than real wage growth in the economy.
Professor Scott said the international Choosing Wisely campaign, the Medicare Benefits Schedule Review and the push towards linking funding to performance are good steps towards a value-based system.
“We need to determine how we define value. Is the sector providing value for money while making a difference to population health?,” he said.
“Non-disclosure of fees, price discrimination and the choice to bulk bill will continue to be in focus. These pressures present opportunities for strategic growth to improve health outcomes at lower cost.”
ANZ Business & Private Banking Head of Health Richard Grayson said the report highlights challenges for the health care system in managing volume growth, total expenditure, training and distribution of specialists, along with potential flow-on effects for business models and physical infrastructure.
“Despite the challenges, there aren’t many other sectors in the broader economy with such favourable outlooks,” Mr Grayson said.
“The health sector remains supported by strong drivers of growth such as demographics, demand, and funding. On balance, Australian medical specialists remain well positioned.”
Note: The report uses the latest available data from the Australian government Department of Health’s Medicare Statistics and the Australian Institute of Health and Welfare, as well as the Melbourne Institute’s custom-designed longitudinal study – the Medicine in Australia: Balancing Employment and Life (MABEL) survey of doctors. The report was funded by ANZ. Views expressed are Professor Scott’s.