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Successive governments have tried to control the oversupply of doctors in Australia by restricting the entry of migrant doctors. Their efforts have not succeeded. Current policy is to insist that all new GPs take out postgraduate qualifications before practising (and to limit the number of postgraduate places to 400 p.a). Pressure is also being applied to medical schools to limit undergraduate enrolments. The reasons for the inability to control overseas trained doctor numbers and the merits of the Government's current policies are explored.
The Federal Coalition is currently confronting the dilemma of escalating health costs. In 1995-96 the Labor government allocated $18.4 billion for health outlays, $7.1 billion of which flowed to doctors billing the government for services reimbursed under Medicare. Outlays on the Medicare services grew by 9.5 per cent a year between the years 1985-86 and 1994-95, mainly because of an increase in the per capita number of services delivered annually to patients.
Successive governments have been advised that this rapid growth in outlays is linked to a concurrent growth in the number of doctors billing under the system. These doctors are termed 'active medical practitioners'; they include all doctors who hold a Medicare provider number and who bill for at least one service in a year. The number of such providers increased from 27,807 in 1984-85 to 39,812 in 1994-95, an increase of 43 per cent. Over the same period Australia's population increased by 14.6 per cent.
These figures have prompted some analysts to propose a 'doctor led' argument to explain much of the increase in Medicare costs. The thesis is that in a context where there are limited financial constraints on patient demand for medical services (given that some 70 per cent are bulk-billed), where the providers are routinely compensated for all services delivered and are also in a position to influence patient demand for their services, then the number of services delivered will reflect the number of doctors. Doctors are said to be 'target earners', that is, they tend to generate the number of medical services required to meet their income expectations.1
These assumptions are all contestable. However, they have been given some substance by the recent Australian Medical Workforce Benchmark study prepared by the Australian Medical Workforce Advisory Committee (AMWAC).2 The study was based on estimates of reasonable doctor to patient loads (taking into account professional judgements derived from the Royal Australian College of General Practitioners). On this foundation it was estimated that, as of 1994, there was a 19 per cent oversupply of equivalent full-time General Practitioners (GPs) in Australia, most of whom were located in the capital cities. For Sydney, there were 930 or 40 per cent too many and for Melbourne, 414 or 28 per cent too many.3 On the other hand, some shortages in GP numbers existed in rural and remote areas. The situation was more complex for specialist services, with New South Wales (NSW) oversupplied and Queensland, Western Australia (WA) and Tasmania relatively under supplied as far as non-surgical specialists were concerned.
The AMWAC estimates were given substance by an accompanying analysis of GP patient loads in 'over serviced' urban areas. GPs in these areas have significantly smaller patient loads' than do doctors in rural practices, provide 'significantly more consultations per patient' and, because of this, actually end up with similar remuneration to rural doctors (though with considerably fewer hours on the job).4 In other words, the provision of services seems to reflect doctor presence as well as patient need. The point can be illustrated by the vast differential in Medicare Benefits paid per capita by area. A recent analysis of the per capita cost of Medicare services by Commonwealth Electorate showed variations for 1993-94 from $137 and $229 per capita in the remote rural electorates of Kalgoorlie in WA and Parkes (including Broken Hill) in NSW respectively to $461 and $413 per capita in the metropolitan electorates of Wentworth in Sydney and Melbourne Ports in Melbourne.5 These data would appear to confirm the 'doctor led' thesis, since the need for medical services (as measured by morbidity and mortality levels) is higher in rural areas than in metropolitan areas.6
In these circumstances, questions concerning the number and location of doctors offering their services are central to health policy debates about both budgetary and health service matters. Every extra GP practising full-time generates, on average, some 7,000 services annually and costs the government close to $200,000 in Medicare receipts. Currently, the net number of doctors billing under Medicare is growing by just over two per cent, or more than 1,000, per year. If the extra doctors are located in already oversupplied urban areas then the community benefit will be minimal but the cost to the taxpayer will be high. Not surprisingly, successive governments have sought to slow the rate of increase in the doctor workforce and to ensure a fairer distribution between urban and rural locations.
The main control effort during the 1990s has been directed at overseas trained doctors (OTDs) entering as either permanent or temporary residents. Since 1992 the Australian Government's policy has been to limit the increase in OTD doctor numbers to 200 per annum from all sources, including New Zealand, and to reduce reliance on overseas doctors practising while holding Temporary Residence visas. These objectives were accompanied by attempts to attract more Australian-trained doctors to under-supplied areas. Despite a firm restatement of these objectives in 1995, little has been achieved. Partly as a consequence, in 1995 the former Labor Government sought to reduce the number of beginning enrolments in Australian medical schools from 1,200 to 1,000. Though, again, the Government failed to implement the idea, the current Coalition Government is considering the same approach.
The pattern of growth in the net number of 'active' doctors billing under Medicare, which as noted above reached 39,812 in 1994-95, is shown in Table 1. The table does not report the number of salaried doctors; thus it understates both the local and overseas-trained practising doctor workforce. Nevertheless, Table 1 indicates the rapidity of growth in the 'active' workforce and the importance of the OTDs in that growth. The numbers of the latter expanded significantly in 1994-95 and the analysis below suggests further growth on this scale will occur in the near future in the absence of Government action. The implications of this OTD growth in a context of Government anxiety about the supply of doctors are the focus of this paper.
SOURCES OF GROWTH IN AUSTRALIA'S MEDICAL WORKFORCE
a) Australian trained doctors
b) New Zealand trained doctors
New Zealand may also be adding a hitherto unnoticed source of growth in the number of OTDs seeking accreditation under the Australian Medical Council (AMC) system discussed below. An analysis of movers from New Zealand to Australia who hold New Zealand citizenship (available there after three years residence), and who identify themselves as doctors, showed that many are actually born in third country locations. In 1994-95, 232 New Zealand citizen doctors arrived in Australia as settlers or long or short term visitors. Of these, 96 were not New Zealand born. The major birthplaces were 39 from Sri Lanka, 23 from the UK and 10 from India. Since 1992, doctors who are New Zealand citizens but whose qualifications are from places other than New Zealand have not been eligible for automatic registration in Australia. This applies even if their qualifications were from a Commonwealth country. It appears, therefore, that these doctors will be adding another stream to the number seeking AMC accreditation (detailed below).
c) Overseas trained doctors seeking entry to the medical workforce via the AMC
However, these early 1990s initiatives have been undone by a raft of recent developments. On 7 August 1995, the Human Rights and Equal Opportunity Commission (HREOC) responded to a case brought forward by an Indian trained doctor, Dr Siddiqui. Dr Siddiqui had achieved the required pass-mark for the AMC's MCQ test, but not a mark high enough to put him in the 200 top performers eligible for the quota; he claimed that the quota violated the Racial Discrimination Act. HREOC affirmed Dr Siddiqui's claim and awarded him $50,000 in damages against the AMC.8 In October 1995, the AMC removed its quota. It also told doctors in Dr Siddiqui's position (281 in all) that they could now sit the clinical test along with other OTDs who had previously met the quota conditions.
The AMC and Commonwealth Minister of Health subsequently appealed against the HREOC judgement to the Federal Court. On 17 July 1996 the Court delivered its judgement. It decided that the HREOC was in error and that the implementation of the quota did not violate the Racial Discrimination Act. It also annulled the HREOC award of $50,000 damages to Dr Siddiqui. The Court's view was that Dr Siddiqui's advocates did not show that racial discrimination was a factor in the AMC's administration of its quota. According to Justice Heerey, to do so Dr Siddiqui would have had to show that persons of Indian origin were disproportionately affected. As Justice Heerey noted, the quota affected all OTDS, including British and Australian-born persons trained overseas. Dr Siddiqui's advocates did not show that race or national origin, in this case Dr Siddiqui's Indian origin, affected the outcome relative to other applicants, including the British. Another of the Judges, Justice Black, noted that 'there was no attempt to make out such a case'.9 Justice Sackville similarly concluded that 'there is nothing to suggest that persons of India origin are disadvantaged by the examination and quota requirement, when compared with other groups subject to the same requirements'.10
Despite this common sense and apparently definitive judgement, the Government has not reinstated the quota. As a result, the outlook is for a sharp increase in the number of OTDs entering the AMC examination system. This is, in part, because previously discouraged entrants now know that all they have to do is score a 50 per cent pass mark (which about 55 per cent achieve) in the MCQ test before moving to the final clinical test. There are 871applicants enrolled for the forthcoming October 1996 MCQ, of whom 594 are first-time applicants.11 Since around 450 are likely to pass, the annual numbers moving to the clinical examination and subsequently into the workforce will increase in the immediate future.
For the longer term, if there is no action to deter OTD movements to Australia, the numbers seeking AMC accreditation will probably increase further. There are four reservoirs of future applicants. The first is the intriguing number of third-country birthplace doctors identified earlier who are entering as New Zealand citizens. The second and more important source is the backlog of past migrant doctors, particularly those who arrived in the late 1980s. Up to 2,000 of these are yet to begin the accreditation process. The most important source-country is mainland China. According to an analysis of Census data, there were 857 Chinese-born persons claiming medical qualifications at the degree level who were resident in Australia by 1991.12 Only 37 were actually employed as doctors. Most of the rest have delayed sitting the AMC examinations because only permanent residents may apply. Most have only recently gained permanent residence status following the various 1 November 1993 visa categories offered by the former Labor Government.
a Employment Nomination Scheme. Source: Department of Immigration and Ethnic Affairs, unpublished
The third source is current settler arrivals. The scale of the settler arrival flow of doctors is indicated in Table 2. The numbers entering as principal applicants under the Independent and Concessional categories are relatively small, and will shrink further with the imposition of a 25 point penalty for doctor applicants from mid-1995. In addition, the AMC no longer offers its MCQ test overseas, which means that any remaining candidates would have to travel to Australia to be assessed. But, as Table 2 shows, there are increasing numbers coming as Preferential Family applicants (mainly spouses) and as family members accompanying other principal applicants (PAs). The result is that the number of doctors entering as settlers (which peaked in 1991-92 at 588) is now moving up again. There was a drop in 1992-93 to 480. But since then the number has increased to 558 in 1994-95.
The Preferential Family category increase suggests that the incentive to practise in Australia is such that some doctors are prepared to seek out family sponsorships. With this issue in mind we examined the gender and country of origin make-up of the 202 Preferential PAs identified in Table 2 for 1994-95. Almost all were spouses or fiancees, 42 per cent being male and 58 per cent female. Most of these spouses were of Asian origin, with the largest birthplace sources being China (48), UK and Ireland (24), India (17), Sri Lanka (10), Vietnam (9) and South Africa (8). The large number of female doctors sponsored from Asian countries suggests that, when Australian male sponsors chose their partners, some have in mind the status and earning potential of medical wives.
d) Doctors changing their status from temporary to permanent residence
The temporary residence doctor workforce
However, since 1993, there has been a sharp increase in the inflow of TRDs. The number of visas issued to principal applicants who were general practitioners or specialists in the medical temporary residence visa category (422) increased from 415 in 1992-93 to 664 in 1993-94, 728 in 1994-95 and 870 in 1995-96. About 30 per cent of these applicants were visaed from within Australia. For the most part these on-shore visas represent extensions of existing contracts or new contracts (all of which require new 422 class visas). For 1995-96 about 600 of the total 870 visas issued were to newly sponsored doctors entering from overseas, the great majority of whom would have arrived in Australia in 1995-96.
Doctors visaed in this category must be sponsored by an Australian employer to a specific position, such as to a Resident Medical Officer position in a public hospital or to a GP locum position. They must also have their credentials approved by the relevant State Medical Board, but are not required to have their credentials assessed by the AMC. Queensland is the dominant source of such sponsorships. According to the Queensland office of the Department of Immigration and Multicultural Affairs (DIMA), 481 sponsorships were approved in 1994-95 and 383 in 1995-96. The vast majority of these TRDs were British trained. Very few appointments in Queensland or elsewhere in Australia are made from the ranks of permanent resident migrant doctors who are still to pass the AMC accreditation process.
Manifestly, the original Labour Market Agreement under which Queensland Health was to limit itself to 65 new TRDs per year has not operated as intended and, as a consequence, the Commonwealth Department of Health has washed its hands of the affair. Queensland Health still utilises the convenience of the arrangement in getting DIMA approvals of the doctors it wishes to recruit. DIMA, for its part, is obviously not enforcing the original limitation on TRD visa numbers either. This outcome reflects the continuing difficulties experienced by Health authorities in Queensland, WA and NT in filling medical vacancies. There is no better indication of the misallocation of the medical workforce in Australia than the parallel 'surpluses' of GPs in Sydney and Melbourne and intractable shortages in Queensland and WA, particularly in the public hospital system. Not surprisingly, these States have backed away from the earlier agreement to reduce TRD recruitment which most of them had signed. Their position was firmly stated at the June 1995 Australian Health Minister's Conference in Alice Springs. They argued there that the recruitment of TRDs should be 'freed up' rather than restricted.14
The implications of this increasing dependence on TRDs are serious. The current TRD presence in Australia could be as high as 2,000 since TRDs can renew their visas for up to four years. Their presence is not limited to salaried hospital appointments which usually preclude billing on the Medicare system. In the Queensland case a significant number fill locum positions. Also some take relieving positions, such as Medical Superintendents in country hospitals to which private practice rights are attached. As such they would be included in the number of OTDs listed in Table 1. They are therefore adding significantly to growth in the 'active practitioner' Medicare bill the Government is anxious to curtail.
Change-of-status from temporary to permanent residence
The data available on change-of-status cases are patchy. There is no information for 1995-96 since DIMA officials did not record occupational codes in their onshore change-of-status records. However, DIMA was able to provide data on doctors who successfully changed their status to permanent residence in 1994-95 by visa category. Leaving aside those who came as fiancees (already counted in Table 2), there were 96 such successful cases. The majority (51) gained permanent residence on the basis of marriage, while another 30 were sponsored by an employer. (There is no access via the Independent or Concessional Categories for on-shore applicants and, in any case, none would succeed because of the 25 point penalty noted earlier). As to birthplace, 43 were UK and Ireland-born, 14 Chinese and 10 Malaysians. The high UK number is to be expected given British-trained dominance of the TRD movement. If this pattern continues, then, given the recent increase in TRD appointments, the number of change-of-status cases is likely to increase over the next few years.
There has been some concern that former full-fee overseas students might seek to change their status too, in order to practise in Australia. But, as far as can be gleaned from DIMA records, only a trickle of such doctors have so far sought or succeeded in doing so. However, their numbers may grow since full-fee graduations (who have completed their intern year) will double to some 150 a year in the near future.
In a climate of radical cost-cutting the Coalition Government could hardly stand by and allow the increase in Medicare payments which would flow from the addition of some 1,200 local graduates and more than 300 OTDs annually. The options available include another go at cutting local medical school enrolments, the reintroduction of the previous 200 OTD quota and/or a refusal to allow future OTD arrivals to provide services eligible for the Medical Benefits Schedule (MBS). As it has turned out, the Coalition Government has acted decisively in the context of the 1996 Budget decisions, but not by curbing the supply of doctors. Instead it has sought to solve the ballooning Medicare bill in part by rationing the access of doctors to positions which allow them to bill on the MBS as GPs.
THE COALITIONIS 1996 BUDGET INITIATIVES
At the time of writing, the Government has indicated that it will address the issue of local medical enrolments in consultation with the medical schools but has made no announcement about the level of reductions. Nor has it indicated a policy on reducing the flow of doctors through the AMC accreditation process. If no action on these fronts is taken, the result will be a very large and unhappy queue of applicants for the RCGP program.
The College received 550 applicants for the 400 positions available in 1996 (the cut off date for applications was 19 July 1996). It will receive far more in future. In 1994-95, of the 24,245 'active' doctors in General Practice, 6,895 were not 'recognised' as GPs, including large numbers who have registered since 1991.16 Recent graduates have been able to pursue the highly lucrative entrepreneurial route (as in 24 hour surgeries or as locums) after completing their training - as have those completing the AMC process. While those already practising will not be affected, new graduates will no longer be able to do so. It is likely that at least 400 of the 1,200 local medical graduates will want to take the RCGP training program, as will most new AMC doctors. The alternative is competition for one of the 500 to 600 specialist training positions available annually, or a 'career' as a salaried hospital doctor. The latter, unfortunately, is seen by most as a 'dead-end' option. In addition, those who fail their specialist training program (around one third) and who in the past have tended to enter General Practice will also be anxious to secure RCGP training positions.
The reduced rate of entry to General Practice implies that non-metropolitan areas will have even greater difficulty filling their General Practice positions. In the case of Queensland, managers of locum and 24 hour clinics located in Brisbane cannot currently fill their rosters from local sources. According to now Queensland Health, one major employer alone (Brisbane Locum Services and Family After Hours Company) has appointed some 50 TRDs since June 1995. How much harder will it be to fill such positions with the proposed restrictions on non-accredited doctors, including TRDs, in place? The Government is adamant that it will not allow non-accredited doctors to practise as GPs even if they are prepared to do so in remote areas. The only solution so far proffered is an allocation in the 1996 Budget of $20 million to help persuade recognised GPs to practise in shortage areas. Such measures have not had much impact in the past for reasons noted at the outset of this paper. It is hard to see how they will work in future if competition for General Practice patients is reduced in the metropolitan areas. The Government may well have to take the tough next step of limiting the number of GP positions in the metropolitan areas or placing a requirement on newly trained GPs to serve for a limited period in under-supplied areas.
THE SUPPLY OF DOCTORS
If the supply is to be reduced, the focus should be on OTDs rather than locally trained doctors. It is not as though OTDs or overseas-born doctors trained in Australia are scarce. On the contrary, relative to the size of the overseas-born population they are overrepresented.17 In the absence of the 300 or so likely annual increase in the OTD workforce the oversupply problem would soon evaporate. Action on this front requires, as a minimum, the reintroduction of a tight AMC quota on the numbers accredited, both to limit the incentive for more OTDs to migrate here and to make 'room' for the locally trained. It is unfair to allow OTDs to come to Australia and, regardless of the training standard of their original medical qualifications, gain access to the AMC accreditation process without restriction when, at the same time, local medical aspirants have to face the most strenuous of entry procedures just to begin a medical degree. Action on the OTD front will also have an immediate impact on supply, whereas a cut in local enrolments will have no workforce impact until at least 2004.
The fundamental principle at stake is the right of Australians to access the available professional opportunities in the field. In present circumstances, if the Government requires the Australian medical schools to reduce their intake from 1,200 to 1,000, this will mean that local opportunity is being sacrificed because of the incapacity of the successive Governments to control the movement of OTDs to Australia.
8. For details of the case, see R. Birrell, 'Immigration and the surplus of doctors in Australia', People and Place, vol. 3, no. 3, 1995.
People and Place is published quarterly by the Australian Forum for Population Studies. People and Place presents key information on migration patterns, the labour market, urban growth, the environment and related topics. People and Place is also published electronically by the School of Social and Behavioural Sciences at Swinburne University of Technology.