The global financial crisis and Australian general practice

Abstract

To explore the potential effects of the global financial crisis (GFC) on the market for general practitioner (GP) services in Australia. We estimate the impact of changes in unemployment rates on demand for GP services and the impact of lost asset values on GP retirement plans and work patterns. Combining these supply and demand effects, we estimate the potential effect of the GFC on the market for GP services under various scenarios. If deferral of retirement increases GP availability by 2%, and historic trends to reduce GP working hours are halved, at the current level of ~5.2% unemployment average fees would decline by $0.23 per GP consultation and volumes of GP services would rise by 2.53% with almost no change in average GP gross earnings over what would otherwise have occurred. With 8.5% unemployment, as initially predicted by Treasury, GP fees would increase by $0.91 and GP income by nearly 3%. The GFC is likely to increase activity in the GP market and potentially to reduce fee levels relative to the pre-GFC trends. Net effects on average GP incomes are likely to be small at current unemployment levels.