HIGHLY educated professionals such as doctors often prefer to live in cities with access to a variety of schools, job opportunities for their partners and cultural activities to enjoy in their leisure time. However, health needs are just as great if not greater in remote and rural locations. Hence, many countries have developed schemes to encourage or entice doctors to practise in less desirable rural areas.
In Australia, the issue is particularly acute due to the contrast between our highly urbanised population centres and many remote and rural towns. Recent research suggests that despite efforts to address the problem, supply of GP services is 10% lower in outer regional areas, and up to 30% lower in remote areas. So what policies have been enacted to try and address this problem in Australia?
Since at least 1993, the Australian Government has provided various financial incentives for GPs to locate or relocate into remote and rural areas. These policies have been known recently as the General Practice Rural Incentives Program (GPRIP). Financial incentives have included a mixture of one-off relocation grants, training grants and ongoing extra payments to all GPs located in rural areas, with higher amounts for “more rural” areas and for longer-serving doctors. These funding programs provided an extra $64 million per year to GPs in rural areas as of 2009–10. Other schemes, such as the Practice Incentives Program and bulk-billing incentives, also included extra “loadings” for rural areas, enabling rural GPs to earn higher fees or rebates compared with their city-based colleagues.
Despite the widespread use of financial incentives in Australia and elsewhere in the world, there is conflicting evidence as to whether they are effective in increasing the supply of doctors in rural areas. Several studies find financial incentives to be effective, but others find them to have no effect. Many studies, however, have serious methodological and/or data shortcomings. In a 2009 Cochrane review, Grobler and colleagues reviewed more than 1800 studies on interventions designed to increase the supply of doctors to rural areas but could not find any that could satisfy their inclusion criteria. The review was later updated in 2015, with only one study found to meet their criteria, but that study did not address financial incentives.
Our recent work, forthcoming in Social Science and Medicine, adds to the literature by providing a rigorous evaluation of how financial incentives affect GP supply in the Australian context. The study exploits a major change in 2010 in the way eligibility for incentives under GPRIP is determined. A different geographic classification scheme (Australian Standard Geographical Classification – Remoteness Area [ASGC-RA]) was used in place of the GP Rural Retention Project (GPARIA) classification to determine the eligibility for GPRIP from July 2010 onwards. Because of this change, some areas that were ineligible for incentive payments under GPARIA became newly eligible for incentive payments.
We hypothesise that, if financial payments were to have an effect, the newly eligible locations must surely experience an increase in the supply of GPs compared with other locations. To test this, we used data from the sampling frame of the MABEL (Medicine in Australia: Balancing Employment and Life) longitudinal survey of Australian doctors from 2008–09 to 2013–14. This dataset contains the main location of all Australian doctors, including GPs, and allowed us to track the number and movement of GPs over time. Using the change in remoteness classification in 2010, we were able to classify all locations into three categories: newly eligible, never eligible (ie, metropolitan) and always eligible (ie, remote) locations.
Most of the newly eligible areas are ASGC-RA2 rural areas that are relatively close to urban centres, so they did not attract the highest rate of GPRIP, but the amounts involved are still substantial. Doctors in newly eligible locations received an increase in annual earnings of up to $2500 after the first year, increasing up to $12 000 after 5 years, representing between 2% to 6% of an average GP’s salary.
We used a difference-in-differences methodology by comparing the newly eligible locations with never eligible locations and tested if more GPs were practising in the newly eligible locations after the change in eligibility in 2010.
Our main findings are that the overall supply of GPs did not change in the newly eligible locations after 2010. There is no evidence that the eligibility for incentive payments enticed existing GPs to relocate their practices to these locations. We did find some evidence that newly qualified GPs (ie, doctors progressing from working as a GP registrar to GP and GPs moving from overseas) were more likely to locate to these newly eligible locations. However, the number of new GPs are relatively small in comparison with existing GPs (total new GPs in the sample were 1700, compared with some 6300 existing GPs relocating from one location to another during the study period). The new GPs were such a small part of the overall “stock” of GPs, that no material change was recorded in the overall supply of GPs to the newly eligible areas after the change in eligibility in 2010.
This suggests that it is difficult to encourage GPs to relocate with modest financial incentives, at least in the short term. Many existing GPs are satisfied and have stable positions, and if they move practices they do so for specific reasons unrelated to financial incentives. Evidence from the US suggests that a majority of GP movement occurs when they are early in their career, and it seems likely this is also the case in Australia.
Our study was only able to look at the short term, immediate effect of the incentives in the newly eligible areas. Maybe the long-term picture will be more optimistic, as more new GPs enter the workforce and are influenced by financial incentives to locate away from metropolitan areas.
Given it may be that only newly qualified GPs are amenable to incentives, perhaps policy design should take this into account and focus more specifically on.
Peter Sivey is an Associate Professor in the School of Economics, Finance and Marketing, RMIT University. His research covers hospital waiting times, emergency department performance, and doctors’ labour markets.
Jongsay Yong is Associate Professor at the Melbourne Institute: Applied Economic & Social Research, University of Melbourne. He specialises in applied health economics with a focus on hospital performance in Australia’s health system.
Professor Anthony Scott leads the Health Economics Research Program at the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, and jointly co-ordinates the University of Melbourne Health Economics Group.
The statements or opinions expressed in this article reflect the views of the authors and do not represent the official policy of the AMA, the MJA or MJA InSight unless that is so stated.
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