Australia is not in the grip of a GP shortage -- in fact, there is a costly oversupply of doctors. Monash University demographer Bob Birrell crunches the numbers and has some suggestions for future policy.

The federal and state governments base their GP manpower policies on the assumption there is a shortage of GPs in Australia, particularly in non-metropolitan areas.

This assumption is founded on a mindset that dates from the mid-2000s when there really was a shortage of GPs in some of these areas. There is a formidable bureaucracy and powerful vested interests with a stake in preserving the shortage story.

However, with a few exceptions, mainly in remote areas, it is wrong. There has been a sharp increase in the number of Full Time Work Equivalent GPs (FWE GPs) billing on Medicare since the mid-2000s. The level of GP services in both metropolitan and non-metropolitan is well above that considered by medical manpower authorities in the past to be adequate. This over-servicing is showing up in high bulk-billing rates. By 2011-12 these were more than 80% in both metropolitan and non-metropolitan areas.

Another indicator of the change is the number of GP services billed per person per year in Australia. This increased from 4.9 in 2004-05 to 5.7 in 2011-12.

The oversupply is about to get worse. The number of fully registered Australian-trained GPs who will enter the GP workforce will double to around 1000 per year over the next few years. Most will locate in metropolitan areas because they can practise wherever they chose. In so doing, they will add to the over-servicing problem. They can do so because patients who are bulk-billed face no financial constraint on their consumption of GP services and GPs make the judgements about what services are needed.

GP over-servicing is very expensive for the Australian taxpayer. In 2011-12 the Commonwealth government paid out $6.7 billion to GPs billing on Medicare and for GP incentive programs. This amounts to an average of $317,000 for each of the 21,119 FWE GPs billing on Medicare in 2011-12.

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The emphasis of government medical manpower policy should switch to ensuring that the GPs serve where they are needed. Part of the solution must be to restrict the right to practise in over-serviced areas.

This is not equivalent to the conscription of doctors. The government can limit the places where GPs are permitted to practise through its controls over the issuance of Medicare provider numbers. This already happens with GPs who are international medical graduates, or IMGs. They are only issued with provider numbers if they serve in districts of workforce shortage. All that would be required to limit over-servicing in metropolitan or any other locations would be to not issue additional provider numbers in such areas until the oversupply situation ends.

In the case of policy regarding IMGs, the recruitment of IMGs on limited registration into districts of workforce shortage should cease. Surveys of morbidity indicate that regional communities require more medical service per person than do metropolitan communities. The demands on GPs skills are also greater in these communities because GPs are often required to provide procedural services in local hospitals as well as GP clinical services. Regional GPs also do not have the same access to specialist back-up as do GPs in metropolitan areas.

It would be far preferable if the impending surge of highly trained and accredited local GP registrars served in shortage areas when they complete their training.

There is no need for more limited-registration IMGs, yet the numbers being sponsored on 457 visas is surging — reaching 2663 in 2011-12. This reliance is now built into the business model of some corporate employers. One of these, Tristar, had established 40 clinics in regional Australia by 2012, all heavily reliant on the employment of IMGs on 457 visas.

*This is the first chapter of Bob Birrell’s report Too Many GPs, published today through Monash University’s Centre for Population and Urban Research