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Chapter 5: The business and economics of general practice

5.1 Business and income challenges

The most commonly reported challenges for GP practice owners have remained the same as in previous years. GPs who are practice owners are more concerned with maintaining practice accreditation and electronic systems, maintaining income and their work–life balance, and staffing issues, than non–practice owner GPs (Figure 53).

Figure 53. Practice owners report different challenges to non–practice owner GPs*

Practice owners report different challenges to non-practice owner GPs

*Top 12 out of 15 categories are listed
Measure: GP responses to the question ‘What are the main business challenges/issues you face as a GP?’, split by GP practice ownership status
Base: Responses to survey question, n = 1782
Source: EY Sweeney, RACGP GP Survey, May 2020.

General practice is worth over $13 billion in ‘value add’ to the Australian economy 51

$13b

GPs in regional, rural and remote areas report different challenges to GPs located in Australia’s cities.

Accessing other medical specialists, networking with other GPs, and accessing allied health professionals, is more challenging for GPs in regional and rural areas. GPs located in cities report more difficulty building a patient base than their colleagues outside cities.

Likely related to greater competition, and fewer government incentives, GPs in metropolitan areas report greater challenges maintaining income as well (Figure 54).

Figure 54. GPs in rural areas report different challenges to GPs in metropolitan areas*

GPs in rural areas report different challenges to GPs in metropolitan areas

*Top 11 out of 15 categories are listed
Measure: GP responses to the question ‘What are the main business challenges/issues you face as a GP?’, split by GP location
Base: Responses to survey question, n = 1782
Source: EY Sweeney, RACGP GP Survey, May 2020.
 

5.1.2 Business and financial challenges relating to COVID-19

Seven in ten GPs report that their income or revenue in April/May 2020 was lower than it was in the same period in 2019. For one in four GPs, their income was much lower (Figure 55). The effect is seen more strongly among metropolitan GPs, with 74% reporting lower incomes, compared to 61% among regional and rural GPs.5  

 
GPs, and their teams, have been faced with a lack of job security at a time when the Australian community needs them the most

Figure 55. GP income has been negatively affected by the pandemic*

GP income has been negatively affected by the pandemic

*Data representing less than 5% is not labelled
Measure: GP responses to the question ‘How would you compare your income/revenue now to the same time last year?’
Base: Responses to survey question, n = 1782
Source: EY Sweeney, RACGP GP Survey, May 2020.

An RACGP poll of 980 GPs produced further insight; 85% of respondents indicated they had seen a decrease in revenue compared to the same time period in 2019.24 Of these, two in five GPs (43%) saw a decrease of between 10% and 30%, and one in three GPs (32%) saw a decrease of more than 30%.24

Many GPs indicated in free text responses that this decrease in income had been temporarily offset by a large number of presentations due to the start of the flu season, but also that many GPs were working longer hours to maintain the same income.24

When asked what they think are the main contributing factors for the reduction in income or revenue, 83% of GPs cite that fewer patients are presenting for usual care (Figure 56). This reflects the findings reported in section 1.1 that fewer patients have been presenting for chronic conditions such as circulatory, endocrine and metabolic disorders. It is also a recurring theme reflecting the challenges GPs report which impact on their ability to provide patient care during the pandemic, and Medicare billings data (discussed in section 1.4.2).

Seven in ten GPs report the requirement to bulk bill a large proportion of their patients was also a contributing factor (Figure 56). As discussed in section 2.3, for several months it was required by legislation that GPs bulk bill telehealth consultations provided to Commonwealth concession card holders, children <16 years old and patients who are more vulnerable to COVID-19.

Fifty per cent of GPs reported that the removal of the mandatory bulk-billing requirements for telehealth would improve the viability and sustainability of their practice.24 Free text responses highlight that GPs are happy to support their patients by bulk billing during a time when many are experiencing financial difficulties, but that longer-term practice sustainability cannot be supported without either increased rebates or charging fees to more patients.24

GPs strongly advocated that they should be able to use their own professional judgement and knowledge of each individual patient’s circumstances to decide when to bulk bill for telehealth. GPs also note that the systems are not in place to effectively and efficiently process payments for telehealth services.24

Other reasons cited for reduced income or revenue included reduced rental income; reduced work hours; changed employment or personal circumstances; more time spent on administrative tasks; and increased expenses in response to the demands of COVID-19, such as needing to pay practice staff for longer hours, cleaning expenses and sourcing PPE.5

Figure 56. The most commonly cited reason for reduced income was fewer patients presenting for usual care

The most commonly cited reason for reduced income was fewer patients presenting for usual care
Measure: GP responses to the question ‘What do you think are the main contributing factor/s? (for reduced income compared to the previous year)’
Base: Responses to survey question, n = 1263
Source: EY Sweeney, RACGP GP Survey, May 2020.

Six in ten (57%) GP owners are concerned about the viability of their practice.5 GP owners in major cities are more concerned about the short-term viability of their practices than GP owners in regional Australia (Figure 57) although, overall, GP owners are more concerned with viability in the longer term (37%) than in the shorter term (20%).5

More than two out of three GP owners attribute their concerns about practice viability primarily to the effects of the COVID-19 pandemic.5

As a result of this concern, two in five (43%) reduced their workforce, most commonly by reducing staff hours (31%) but also by laying off practice staff (13%).5

GPs in rural areas face unique challenges, which are reflected in survey findings. GPs working in regional/rural areas (38%) are more likely to report a deterioration to work–life balance due to COVID-19 than their metropolitan counterparts (31%) (Figure 4).5

Figure 57. GP owners are concerned about the viability of their practices

GP owners are concerned about the viability of their practices

Measure: GP responses to the question ‘Are you concerned about the viability of your practice?’
Base: Responses to survey question, n = 428
Source: EY Sweeney, RACGP GP Survey, May 2020.

  • 5. EY Sweeney. RACGP GP Survey, May 2020. Melbourne: EY Sweeney, 2020.
  • 24. RACGP Poll – Telehealth. May 2020. Unpublished.
  • 52. IBIS World. General practice medical services in Australia industry trends (2015–2020). Melbourne: IBIS World, 2020

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