SUBMISSION to the
Productivity Commission Health Workforce Study
My submission is a collection of various articles published in daily newspapers (The Australian, The Age etc) and the medical journals such as The Australian Doctor, Medical Observer, GP Review etc. 
My main points are:
1.	There is no shortage of medical practitioners. In fact there is a serious oversupply.
2.	The main reason which affects the demand for doctors is Price, as in the case of any service. ‘Free’ health care provided (due to bulk billing) creates artificially inflated (almost infinite) demand.
3.	The factors which affect the supply of doctors is the government budget- ie the money that is available for health care. Since this must be controlled, the number of doctors must be controlled as well.
4.	The ‘shortage’ of doctors in the rural areas is no different to the shortage of any other professional (teachers/engineers/lawyers etc) in the bush. In fact rural areas are far better served by doctors than other professionals. 
5.	Greater financial incentives must be used to solve the problem of insufficient doctors in the bush (if it exists) rather than taking in lower quality students from rural areas as happens now. 
lpar

Your article “Doctors without patience” (Oct 1st) does not cover an important point: unlike most other professionals, GPs are unwilling to use price as a mechanism to control their workloads.

There is no workforce crisis; there is a crisis of confidence among GPs, who do not value themselves, thus do not charge a reasonable fee for their services. 

If all GPs were to charge a co-payment of say $30 per consultation, most of them would become unemployed. I have tried this strategy and it sure as hell works!

GPs should stop whingeing about long hours, workloads, shortage of doctors etc and start charging reasonable fees. Then all such ‘problems’ will evaporate overnight.

Medicare could help GPs, by making it easier to private bill and by not actively discouraging them from working too hard and seeing many patients.

Nathan Pinskier refers to a ‘structured appointment system’ (also known as ‘open-office scheduling’) as the cure for the ills of patients’ complaints regarding waiting time (GP Review, June 2002, p23). 

While the suggested system removes the difficulty of getting same-day appointments, it makes it difficult for patients to obtain appointments at an earlier time. It also puts the onus of deciding the ‘urgency’ of a patient’s problem on staff.

A more appropriate system is to use the magic of ‘price signals’ to control the demand for appointments. We charge three scales of fees depending on the patient’s perceived urgency of their problem. 

We charge $15 for advance appointments, $30 for same day appointments and $40 if they wish to be seen as the next patient (all are co-payments).

By using this ‘three tiered appointment system’, the patients are in control. They decide when they wish to have a consultation, rather than staff making the decision for them.

Dr Paul Sherwin’s proposed ‘solutions’ for reducing PBS costs (MO, 6 July 2001) reek of more regulation of the most regulated profession of all: the medical profession.

For a country to be competitive in the global environment, policies have to be put in place to encourage people (including professionals) to work harder and smarter, rather than impose restrictions that reduce the efficiency and effectiveness of their work. 

It is ridiculous for Dr Sherwin to claim that there are laws restricting the number of hours worked by certain people. That may well apply to a few categories of employees, but I know of no self-employed business people (many GPs are in this category) to whom such restrictions apply: for example lawyers, accountants, bakers, plumbers and engineers. Would any one dare impose restrictions on the number of clients seen by self-employed professionals or number of services rendered by self-employed tradespeople?

The simple answer to reducing PBS costs is to send ‘price signals’, by at least tripling the currently meagre co-payment for drugs. Similar co-payments for visits to GPs would curb demand, introduce some real competition and reward efficient GPs. Politicians are reluctant to do this (Labor more so than Liberal) for political reasons and are expecting the GPs to do the dirty work for them. They are diverting the flak they would receive from the patients, to the GPs.

Expecting GPs to restrict the number of scripts they write is analogous to the government providing a free taxi service to everyone and forcing the driver to ration the unlimited demand it would generate.

Free Doctors create shortage

The claim of Drs O’Dea (15/7) and Rankin (19/7) that there is a shortage of GPs is incorrect. Vested interest groups such as those they represent are distorting the truth.

I operate a medical practice in the outer suburbs and bulk bill. While I continue to bulk bill, I could work 24 hours a day and still have patients. However I recently decided that, in order to stay sane, I would charge patients a minor gap payment of $15 for consultations after 5 pm. I found that demand for my services after 5 pm evaporated! 

My experience and those of other GPs shows that the demand for our services exists mainly because they are free. It appears that the public values our services so little that they are unwilling to pay the cost of a pizza for healthcare. 

If services are provided free at the point of delivery, there would be unlimited demand for any service: handymen, plumbers, hairdressers, accountants, lawyers. It is ridiculous to argue that there is a shortage of service providers in any profession where the services are provided free.

Providing free medical services and claiming a shortage of GPs is analogous to providing a free taxi service to everyone and the Australian Taxi Industry Association claiming that there is a shortage of taxi drivers, to cope with the unlimited demand it would generate.
The reality is that there is an oversupply of GPs and people do not consider their health care to be valuable enough to pay for.

FOOD ISN’T FREE, SO WHY DOCTORS?

Kate Stewart’s claim (24/7) that health care is essential so it should be provided free, is flawed. Food, clothing, electricity and gas are even more essential. Why aren’t these provided for free?

Such arguments reflect a deep malaise in our society. This is what I call the FOHP (From Others’ Hip Pockets) syndrome, similar to NIMBY (Not In My Back Yard).

An example of FOHP is when sectors such as health care, education and 
child-care claim their services are essential so they must be subsidised or provided free, at the point of delivery.

The fact is people want various services, but do not consider them valuable enough to pay for it at the point of delivery – they expect them to be paid FOHP.

PEOPLE ONLY VALUE WHAT THEY PAY FOR

The impact of universal bulk-billing on the demand for medical services is much worse than Dr ------- outlined in her letter of 23/7 and Kate Stewart 24/7 inadvertently exposes the reason.

People who believe that, having paid their Medicare levy, they have paid for their healthcare, feel free to demand unlimited service without further payment, not only from GPs but from public hospitals.

The truth is that the Medicare levy meets only 67% of Medicare rebate payments, and has never met their full cost, let alone made any contribution to public hospitals or pharmaceuticals.

Even in communist China a small charge is applied. As Mao said: ‘What the people are given for nothing, they do not value.’ 

The article in The Australian 18/4/2, page 1 states that there is a shortage of GPs in general, for eg in western suburbs of Melbourne. This is incorrect.

If doctors work long hours, it is their choice. If they ask for a minor co-payment (from patients who make them believe they are indispensable) they will find all the demand for their services will evaporate!

I operate a medical practice in the western suburbs of Melbourne and bulk bill. I could work 24 hours a day and still have patients while I bulk bill. However I recently decided that, in order to stay sane, I would charge the patients a minor gap payment of $15 for consultations after 5 pm. I found that all that demand for my services after 5 pm disappeared! 

My experience and those of other GPs shows that the demand for our services exists mainly because they are free. It is an insult to the profession that the public value our services so little that they are unwilling to pay the cost of a pizza for healthcare. 

If free services are provided, there would be unlimited demand for any service: handymen, plumbers, hairdressers, accountants, lawyers. It is ridiculous to argue that there is a shortage of service providers in any profession where the services are provided free.

“Hold on,” people say, “but access to health care is essential!” However, access to food, electricity, gas and water services are even more essential. Why don’t we provide these for free?

Providing free medical services and claiming a shortage of GPs is analogous to providing a free taxi service to everyone and saying that there is a shortage of taxi drivers.

American health care model is constantly criticised as one where they spend more of GDP on health care yet have 'worse' health outcomes. This is not quite true. It depends on your definition of 'health outcomes'. People who are very rich receive much better health care and facilities in the US than in Australia. People of lower socio-economic status probably receive better quality health care in Australia than in the US.

So if your definition of 'health outcomes' means lower standard deviation in quality of care then Australia fares better. But if one's definition of 'health outcomes' means higher standard deviation in quality of care, US does much better. 

How else do you explain the fact that people from developing countries go to the USA for top quality health care, rather than come to Australia?

You are wrong Dr Auricht (GP Review, Sept 2001, Page 3). 

Many GPs don’t seem to understand the basic principles of economics: the relationship between demand and supply.

 The minority who do understand gain comfort in the statement “but the free market doesn’t work in health care”. In reality what they mean is that they don’t want free market principles to work in health care because it doesn’t suit them (their ideologies etc).

I operate a solo medical practice and bulk bill. I could work 24 hours a day and still have patients while I bulk bill. However I recently decided that, in order to stay sane, I would charge the patients a minor gap payment of $15 for consultations after 6 pm. Guess what? All that demand for my services after 6 pm disappeared! 

My experience and those of other GPs shows that the demand for our services exists mainly because they are free. It is an insult to the profession that the public value our services so little that they are unwilling to pay the cost of a pizza for healthcare. 

If free services are provided, there would be unlimited demand for any service: handymen, carpenters, hairdressers, accountants, lawyers. It is ridiculous to argue that there is a shortage of service providers in any profession where the services are free.

“Hold on,” people say, “but access to health care is essential!” However, access to food, electricity, gas and water services are even more essential. Why don’t we provide these for free?

I find it incredible that many doctors say there is a shortage of GPs. The reality is there is a severe oversupply and RACGP and AMA must wake up to this fact. Instead of campaigning for higher rebates, they should support the government’s moves to further restrict provider numbers.

While the Government does not set doctors fees as you suggest, its policies have the effect of keeping bulk billing rates very high. For example many doctors are unable to charge private fees because of the oversupply of GPs and the difficulties imposed by the government in charging fees (eg., not allowing co-payments while bulk billing).

While I understand the Government’s concern with providing quality health care to all citizens, it must realise that it is theoretically impossible for any Government to provide top quality health care to all, unless there is unlimited money available. I do not believe mandatory co-payments will result in lower quality health care: in fact it will improve health outcomes by reducing over-servicing and over-consumption of pharmaceuticals.