Issue 36 / 17 September 2018

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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Rural incentive programs attract GPs to the bush
  • Disagree (32%, 19 Votes)
  • Agree (20%, 12 Votes)
  • Strongly agree (19%, 11 Votes)
  • Strongly disagree (15%, 9 Votes)
  • Neutral (14%, 8 Votes)

Total Voters: 59

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17 thoughts on “Do rural incentives payments attract GPs to the bush?

  1. Anonymous says:

    The reality is that most doctors are married and want optimal education for their children which is often not possible in the country.
    Grandparents will live in the city so this “resource” will not be possible if they are a long way way.
    About 50% of doctors graduating are female and their husbands may not be medical and work in the cities.
    Finally there is the potential to make serous money in the country BUT it requires almost 24/24 work so financial incentives are only a small initial incentive

  2. Wayne Shipley says:

    This study highlights the ridiculousness of the incentive on offer currently. It simply is grossly underfunded, $2500 extra a year is not going to even entice an unskilled worker at a takeaway shop to an area they don’t naturally want to live in, let alone a highly skilled doctor. There are other financial factors that need to be considered and then the true “incentive” is seen for what it really is “ a way of appeasing the public in that the government tried to get doctors out rurally because we offered incentives!” Anyone knows you can actually loose money going rurally when you consider the true “financial losses” such as the fact that capital gains of your house in the country that you buy is non existent if not backwards, that runs into hundreds of thousands of dollars, any GP practice will be almost impossible to sell and not value add, education costs for boarding school, Living expenses are higher, partners likely get lower paid jobs or unemployment to name just a few losses. Let’s all get real, and put on the table real incentives that work, studies have shown that this incentive would need to be at least $150000 or more. Doctors would chase that money, and stay! just as is the case of rural towns being able to attract Locums but not regular docs, it’s often because they are paid at twice the rate of local doctors. Money always works, it’s just currently grossly inadequate to be a real incentive and undervalues the role of the regional and rural doctors, the rural and regional people do not get the same amount of health expenditure and deserve more access to regular doctors, it’s time to finally fix that! Just need to pay what it’s worth. There will then be huge gains to the rural economy; less expensive Emergency retrieval’s as there will be a better local doctor workforce, less illness and disability of the community, less need to travel to specialists in the city, less reliance on expensive Locum doctors, less need for expensive tertiary care because the primary care locally will be better, to name just a few hidden benefits. It will pay for itself almost immediately.

  3. CC says:

    they could offer double my pay but I still wouldn’t move to a rural or remote location. my wife and kids
    would refuse.

  4. Anonymous says:

    The financial incentive must be substantial

  5. Steve Betheras says:

    After tax these payments are minimal. They make some minimal compensation for nonurban living. All Rural Doctors especially the younger ones need to be aware that the greatest wealth builder in Australia is Urban Real Estate ie your own home. Never look at Rural and Remote Health from a monetary perspective because financially you would be mad to do it.
    Mind you after 30 years I still thoroughly enjoy it despite the financial negatives.

  6. David Freeman says:

    Financial incentives alone will never solve the problem of under-doctoring in country areas. A doctor starting a country career needs to have adequate training to give her/him the confidence to cope with the extra demands involved, together with the facilities required.
    Concentrating on the doctor only ignores the needs of spouses, who may have their own careers and preferences.

  7. Anonymous says:

    Some PR IMG’s working in regional sites or rural mostly under supervision initially, has been working for many years
    in these rural community are happy to stay and live there, but due to the old health policy design, mostly
    were limited to stay and work in these DWS rural communities due to inability to acquire a general registration.
    There should be a better and improved health policy design for IMG’s working in rural sites under supervised and has been well known by the community as their helpfull GP.
    Improvement of the Australian health policy re rural or DWS working IMG, with a Fair Go to these hard working IMG’s,
    likely can contribute to the chronic shortage of GP’s in rural and remote communities.

  8. Anonymous says:

    Having done many “bush locums” for the last 10 years, I can tell all prospective “bush doctors”, that you will need plenty of all round experience (especially coronary, respiratory, paediatric and orthopaedic) to not be overwhelmed and fearful in your practice. The ever present threat of litigation and your own anxiety, contribute to a very difficult environment, when there is no one to “hold your hand”. Probably the greatest unknown are Paediatric emergencies, where you have no idea of “what is wrong”with the infant, you cant find a vein, the fever is unrelenting, and you hope the child survives till the Flying doctor arrives, otherwise you will be on the front page of the main newspaper of that State, implying that you are an incompetent fool—“phoning a friend”at the nearest large Hospital doesn’t solve the problem. So good luck to all you City dwellers !

  9. Anonymous says:

    I am a rural doctor in a ASGC RA Zone 5, hence I get an incentive payment. The extra money I receive is one of the reasons I moved here. And if I was to no longer get it I would leave. Your study is short term- it takes years to recruit GPs to country practices, and as other people have said- you focused on ASGC-RA zone 2 which is essentially outer metropolitan and not really rural or remote so hardly received any increase in pay- $2500 in a year. Incentives need to reach 5 digits to truly incentivise Doctors to move rural.

  10. Anonymous says:

    This study is unfortunately useless. A bit like studying how much effect 2mg of aspirin has for a cardiovascular outcome and then claiming “it doesn’t work” when there is no significant outcome.
    The financial incentive required to compete with all the already mentioned advantages of urban living is likely more than 50,000 per year, and increasing with remoteness and after hours obligations.

    We country GPs do a lot of specialist work for GP money, simply because there are no specialists around. This should be rewarded better and suggestions have been made by AMA and RDAA in 2016 to apply a rural loading to Medicare item numbers, staggered according to remoteness. Off course this suggestion has been thoroughly ignored by the federal government.
    Together with the challenging but rewarding and versatile work a decent financial reward would certainly increase the attraction of working in regional/remote Australia.

  11. Dianmari says:

    ! Decades ago the govt stopped allowing education expenses for children as a tax deduction. If woopwoop high school exists you r expected to go there with no subsidies for anyrhing else regardless of whether yr children need a special interest (music, sports, performing arts, religious/cultural, gifted or excellent & expensive school to get yr average child into law or medicine if he wants it) . No (taxed) incr in pay will cover it. Re structure not just increase…..bring back deductibles or arr salary sacrifice.

  12. Philip Dawson says:

    I was brought up in Melbourne trained at Monash and effectively inoculated against big cities by the traffic and my frequent visits to rural areas for bushwalking. One of my colleagues crashed his car driving home from nightshift, breaking his hip. Another, my Obstetric trainer, died rushing to a nighttime delivery, in a car crash. Having moved to rural Tasmania ( 40 minutes from a large city, no traffic lights), I wouldn’t moved back to the big smoke if you paid me double the incentive on offer to go the other way! When I fly to Melbourne to visit my mother I look down on the traffic choking Melbournes roads and speculate on what proportion of the population is sitting in a car! I conclude its substantial and what a waste of everyones time, and a great cause of pollution! I live 3 minutes drive, 7 minutes cycle or 40 minutes walk from work, the hospital is next door, the ambulance next door to that. I realize I am very different to the majority of medical students who are brought up in the big city and love it and after graduation wish to remain in the hell on earth that large cities have become! You will never change these people, they remind me of Agatha Christies Hercule Poirot who when asked didn’t he enjoy the clean frash country air replied, no it is too thin, I like to feel and taste the thick air of the city! Forget incentives like this, offer more scholarships for rural students, along with travel subsidies to visit home. Establish branch rural clinical schools. In Tasmania UTAS has branches after year 3 in Burnie and Launceston and students love coming to our practice, many commenting how much more medicine we do than big citiy practices in Hobart of Launceston where much we se they don’t, even small cuts and sprains going straight to the emergency department!. I think another factor is on call, but in our practice it varies between 1 in 5 and 1 in 8 depending who is on holidays, providing a much better lifestyle than the one in 2 or 3 of old.

  13. Anonymous says:

    I’m a Rural GP, I’ve been here in the same rural town for 30 years. My kids were born here, went through their schooling here and now are enjoying wonderful Careers. My Daughter is studying her PHD in Pain Science at the other end of the globe, my son is about to complete his dual Degree in Arts and Law having had one career already in IT. My wife and I are very happy and we still work together as GP and Practice Manager. We were never city people and we needed no “incentives to come. Pick the right people from the country and they will return to the country, our First Nations people know this, the wisdom of connection to country and Family

  14. Anonymous says:

    An important reason I came to a regional area is because of more, useful, work and higher remuneration for public cases (fee for service for procedures). I still am struggling to find a colleague for 2 years having had 2 of us previously. As per other commentators, obviously $2500 pa is not going to change a decision (these rebates go to non-GP specialists too). Removing it on the basis of studies like this however is adding insult to injury. You really need a continuing rewards scheme amounting to a 20% or more increase in pay to partially offset the other losses others have mentioned above – and then you will attract enough people. No point trying to focus on a few that really just love regional life and would do it for any reason – there are not enough of them in all specialties including general practice to get the reliable service you need. Governments and health economic think tanks should accept this reality and then develop policies that try to address the imbalance – assuming they want to actually fix it.

  15. Anonymous says:

    As the specialist daughter and one of six children of a provincial specialist who consistently worked 100 hours per week with no practice partner and negligible Locum relief, and 1000 miles from any family support, I don’t believe any amount of money would have compensated for what we children and our mother felt we missed out on. We children all high tailed it at the earliest opportunity to the capital cities and have remained there ever since, to further add to my mother’s burden and isolation.

  16. Anonymous says:

    Why doesn’t the government simply restrict the provision of Medicare provider numbers in urban areas for both GPs and Specialists, while allowing greater access to provider numbers in the regional and remote settings? (By this I mean restricting access to both local and foreign medical graduates). I speak as one who has worked in a regional area for more 13-y.

  17. Anonymous says:

    Although both myself and my husband grew up in Sydney and did all our specialty training there, we have been (mostly) happily working as specialiists in a large regional town for the past 28 years. Both our children attended local high schools and did very well academically- one is just about to commence her medical specialty training and the other has a very interesting job. Like one of your previous correspondents we don’t envy our city colleagues their long commutes, big mortgages and the increasing destruction of the (formerly attractive) suburban environment. It is true that we may have made more money staying in Sydney, but generally major costs are lower in the country and the work is much more valued and appreciated by the patients and .satisfying and we are not exactly starving. We have gradually been able to develop sub specialty practice but this continues to present a problem. We have benefited from economies of scale in that there are 2 of us. Our town has a rapidly growing population and our major concern now is that we don’t have any young colleagues following in our footsteps. One possible reason for this in our specialty is that public positions are now being largely filled by ( very expensive) FIFO locums, so there is little incentive for people to move to regional towns.I see little discussion of this issue in rural workforce debates.

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