Position Statement

Geographic Allocation of Medicare Provider Numbers - 2002. Revised 2019

AMA Position Statement: Geographic Allocation of Medicare Provider Numbers - 2002.Revised 2019


  1. Background

Under Australian Government legislation doctors can apply for an unrestricted Medicare provider number upon completing specialist training and attaining fellowship of a recognised medical college. Doctors across all specialties including general practice have the right to choose their preferred practice location.

Governments and local communities offer various incentives and programs to encourage doctors to locate and practise in under-serviced areas. These initiatives are generally under-funded, restrictive and fragmented, and the uneven geographic distribution of doctors in Australia remains a serious long-term problem.

The medical workforce shortage is widespread in regional and rural areas of Australia, especially in the numbers of GPs and general specialists who maintain a broad scope of practice. Rural and regional areas have approximately half the medical workforce of metropolitan areas on a population basis. Shortages also exist in some outer-suburban areas of the state capitals.[1]

Even with the recent increase in Australian trained medical graduates there is a heavy reliance on international medical graduates in regional and rural areas. Though these doctors provide an essential and appreciated contribution to the health care of these communities, it is not sustainable over the long term.

There is a misconception in some quarters that the medical profession is responsible for the medical workforce shortage, and draconian remedies are proposed as a response. Allocating Medicare provider numbers tied to geographical location and restricting the right of doctors to practise in metropolitan areas are raised periodically as solutions to the maldistribution of doctors. 

  1. Proposed models

Under the proposals, mechanisms are used to allocate Medicare provider numbers to geographical locations according to population and other demographic criteria to induce an equitable distribution of doctors. They could be applied to doctors with established practices, limited to newly qualified doctors or applied to both. The reasoning is that a decrease in the number of metropolitan-based doctors, especially in affluent areas, will force a concomitant increase in the number of doctors in under-serviced areas. Examples of these proposals are outlined below.

  • Schemes that restrict the allocation of provider numbers in urban areas and redirect more provider numbers to under-serviced areas.
  • A system of payments by doctors to the Government for provider numbers, based on no charge for remote practice and an increasing scale of payments for rural, regional and urban practice. Provider numbers would not be transferable, and when relinquished, would return to the Government.
  • A government-sponsored auction of provider numbers as a market-based solution to the maldistribution of doctors. Under this scenario doctors bid for a provider number and the right to practise in their area of choice for a defined period. Affluent areas would attract higher bids compared to where there is an undersupply of doctors. In some cases, the funds raised from the auction would be used to subsidise doctors in areas of need.
  • Compulsory return-of-service obligations where doctors are required to practise for a defined period in under-serviced areas before they are eligible to apply for an unrestricted Medicare provider number.
  1. AMA position

The AMA does not support the geographic allocation of Medicare provider numbers or other coercive schemes in any form or under any circumstances.

Proposals to coerce doctors from metropolitan locations by placing criteria other than proficiency on the allocation of Medicare provider numbers are impractical and will not have the desired effect. There is overseas evidence that coercive schemes are ultimately counterproductive in their objectives of attracting doctors to under-serviced and disadvantaged areas.[2] This is often due to the inability to retain doctors in rural and underserviced areas after their obligatory term-of-service has concluded.[3]

Current programs that impose mandatory rural or remote service on medical practitioners includes the Bonded Medical Program (BMP) and the 10-year moratorium on Medicare provider numbers for International Medical Graduates (IMGs). While these schemes are voluntarily entered by participants, they still have the same obligatory service periods that do not support long-term sustainability of the rural medical workforce.

The AMA does not support bonding programs with mandatory return of service obligations. Long-term retention rates of bonded doctors in workforce shortage areas are poor, with retention rates around half that of doctors who practise in these areas voluntarily. In contrast, the best available evidence shows doctors who come from a rural background and/or spend time training in a rural area are more likely to take up long-term practice in a rural location. High withdrawal rates from the Bonded Medical Program (BMP) and increasing participant dissatisfaction highlights inherent flaws in such schemes.[4] The AMA successfully advocated for reforms to the BMP that standardised conditions for bonded medical graduates, improved the flexibility around completing the Return of Service Obligation, and increased support for bonded participants.

The ten-year moratorium on Medicare provider numbers for IMGs continues to be used by the Commonwealth Government to supplement the rural and remote medical workforce. Evidence suggests that IMGs are often not well supported professionally in these areas and transition to metropolitan areas once they’ve completed their 10 years of service.[5] The AMA position statement International Medical Graduates 2015 reflects on the challenges for IMGs and how they can be better supported.

The AMA believes that well designed and targeted incentives are more effective ways to build a sustainable workforce in under-serviced areas, improve patient care and build professional morale. Patient care is better served by doctors motivated to serve their local community rather than compelled to practise in a particular location.

Allocating Medicare provider numbers tied to geographical location and restricting the right of doctors to choose their preferred practice location could have unintended outcomes:

  • coercive schemes that target recently graduated doctors would result in inexperienced doctors working in challenging environments without the requisite skills or support.
  • doctors established in under-serviced areas may be unwilling to supervise “conscripted” doctors.
  • the restriction of trade inherent in geographical provider numbers is likely to have the opposite effect on the overall number of GPs. Attempts to dictate practice location will make general practice unattractive, especially for new medical graduates. Further, recent medical graduates could choose to move overseas to avoid coercive schemes.
  • geographic provider numbers would substantially reduce the capital and professional investment of many established doctors.
  • a system of graded payments for geographic provider numbers could increase the pressure to maximise services in urban practices to pay for the cost of entering practice in urban locations and ensuring their ongoing viability.
  • proponents of auction models argue that the use of competitive market forces would provide the means to overcome the market power of corporate medical practices and the reluctance of doctors to work in under-serviced and disadvantaged areas. The AMA does not support this proposition.
  • it is unlikely that an auction of provider numbers based on location would overcome the market power of corporate practices. Instead, it could lead to a concentration of corporate practices with access to vertically integrated health care services in more advantaged areas and may also concentrate expertise in urban areas. This would adversely affect those areas already experiencing a shortage of specialised medical services.
  • there could also be a strong incentive to maximise services in metropolitan areas as GPs endeavour to pay for the cost of a provider number, in addition to servicing mortgages and the usual debts incurred when establishing or buying into a practice.
  • serious consideration by the Government of a policy that restricts the right of doctors to choose their preferred practice location could exacerbate the shortage of doctors in under-serviced areas as they move to urban centres to avoid a potentially adverse economic impact.

Finally, AMA legal advice is that the implementation of geographic allocation of provider numbers by the Commonwealth Government could contravene the “civil conscription” clause in Section 51 (xxiiiA) of the Australian Constitution. The introduction of compulsory return-of-service schemes would also be problematic. The Mason review of Australian Government health workforce programs noted that “it is likely that even if a universal service requirement could be lawfully devised, the administrative and other costs may outweigh the potential benefits”.[6]

Geographic provider number proposals fail to address the real reasons for the reluctance of doctors to take on careers in under-serviced areas. These include long working hours and insufficient locum support, red tape, inadequate financial incentives, the closure or downgrading of rural hospitals by state governments, professional isolation, lifestyle factors, sub-standard housing, and the lack of spousal employment and educational opportunities.

The medical workforce has also become increasingly specialised over the past decade and sub-specialist practices are generally more viable in urban locations. Urban centres are also attractive to the increasing number of doctors who want flexible working arrangements.

  1. The AMA’s solutions to the maldistribution of doctors

In seeking to address the maldistribution of the medical workforce across Australia, the AMA has always offered holistic long-term solutions that encourage locally trained doctors to work in under-serviced areas.

Medical practice in regional, rural and remote areas is a rewarding vocation for many reasons. The available evidence shows that coercive schemes will not deliver long-term solutions to the complex issue of the maldistribution of doctors. What is needed are meaningful training opportunities, incentives and support mechanisms which signify that doctors working in under-serviced areas are valued, and that moving voluntarily to these areas for a career is an attractive option.

The Australian Government has taken steps to address medical workforce shortages. Medical graduate numbers have grown rapidly due to an increase in the number of available medical school places; Australia had the highest growth in medical graduate numbers in the OECD between 2000 and 2015.[7] The increasing numbers of graduates has not resolved workforce issues. In order to succeed, Federal and State/Territory Governments must ensure that:

  • there are sufficient quality training places for graduates across all medical training programs.
  • future policy development is informed by robust workforce planning.
  • the right policies are in place to encourage doctors to work in under-serviced areas and have the specialties that are needed.

The AMA supports incentive-based, voluntary return-of-service schemes. Incentives could include expanded HECS-HELP loan relief, training fee relief, professional development allowances, access to courses and scholarship payments linked to remote locality. These incentives should be available to rural medical graduate trainees as well as other medical students and junior doctors who are interested in working in regional and rural Australia.

The AMA has long advocated for measures to increase rural and remote training opportunities during medical school, and for prevocational and vocational training, and has proposed a several initiatives that would provide under-serviced areas with a more equitable share of the medical workforce. Now, there are several Government initiatives in their early or implementation phases to improve and expand rural training needs across Australia and produce doctors with the skills required for practising in rural and remote areas. Some of these programs are also designed to improve medical workforce distribution and retention in Distribution Priority Areas, and District of Workforce Shortage areas.

The Stronger Rural Health Strategy aims to build a sustainable, high-quality medical workforce that is distributed according to community needs, particularly in rural and remote areas. Some initiatives within this Strategy include:

  • the Junior Doctor Training Primary Rural Care Stream – to support rural internships for new medical graduates;
  • the new HeaDS UPP workforce planning tool – to identify regions of workforce shortages and inform future workforce planning decisions;
  • the More Doctors for Rural Australia Program (MDRAP) – to better support junior doctors and locums practising in rural and remote areas and to encourage and support non-vocationally registered doctors to join a general practice fellowship pathway; and
  • the Streamlining General Practice Training – that has attempted to streamline GP and rural generalist training. Enrolment in formal pathways to Fellowship allows doctors access to the highest tier MBS items.

A National Rural Generalist Pathway (the Pathway), is also under development in consultation with several organisations, including the AMA, and is currently in its implementation phase. The Pathway is intended to provide a nationally consistent training framework to produce medical practitioners that can meet the specific needs of rural and remote communities. The implementation of a national pathway faces several challenges due to existing differences in State and Territory medical training and employment models, but intends to build on existing State-based generalist pathways. This includes the successful model used by the rural generalist pathway in Queensland that is starting to deliver procedurally trained doctors to rural locations across the state. Similar models already exist in New South Wales, South Australia, Tasmania, Victoria and Western Australia.

The AMA strongly believes that all programs and initiatives intended to address medical workforce maldistribution are evaluated to ensure the desired outcomes of improving workforce distribution in rural and remote areas are being achieved.

If successful, these strategies will begin to address the issues that the AMA has long been advocating for. They will deliver support to attract and retain the medical workforce during and after completion of vocational training. Ideally, they will encompass the aims of the AMA/RDAA Rural Workforce Rescue Package.[8] This package would:

  1. encourage students from rural areas to enroll in medical school and provide medical students with opportunities for positive and continuing exposure to regional/rural medical training;
  2. provide a dedicated and quality training pathway with the right skill mix to ensure doctors are adequately trained to work in rural areas;
  3. provide a rewarding and sustainable work environment with adequate facilities, professional support and education, personal comfort, and flexible work arrangements, including locum relief;
  4. provide family support that includes spousal opportunities/employment, educational opportunities for children’s education, subsidy for housing/relocation and/or tax relief; and
  5. provide financial incentives including rural loadings to ensure competitive remuneration.

These solutions are outlined in greater detail in our position statements Rural Workforce Initiatives – 2017 and Fostering Generalism in the Medical Workforce – 2019.

See also:

AMA Position Statement Fostering Generalism in the Medical Workforce – 2019.

AMA Position Statement Rural Workforce Initiatives – 2017.

AMA response to the National Rural Generalist Taskforce Advice – 2018

AMA Position Statement International Medical Graduates – 2015

Rural Doctors Association of Australia Policy Position Paper 5/2010 – Geographic Provider Numbers.

[1] Australian Government Department of Health Medical Workforce Factsheet, 2016 https://hwd.health.gov.au/webapi/customer/documents/factsheets/2016/Medical%20workforce%20factsheet%202016.pdf

[2] Mason, J. 2013. Review of Australian Government Health Workforce Programs, Commonwealth of Australia: pp 248.

[3] Reid, SJ et al. 2018. Compulsory community service for doctors in South Africa: A 15-year review, S Afr Med J. https://www.ajol.info/index.php/samj/article/view/178638

[4] Gannon, M. 2017. Bonded medical places should be scrapped. Australian Medicine.

[5] Support for International Medical Graduates and their families. House of Representatives Committees. Accessed 9 October 2019.

[6] Mason, J. 2013. Review of Australian Government Health Workforce Programs, Commonwealth of Australia: pp 251.

[7] OECD. 2017. Medical graduates. in Health at a Glance 2017: OECD Indicators.

[8] AMA/RDAA Rural Workforce Rescue Package. 2016

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