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Options for Health Workforce Reform in Australia

Partner Institute: 
Centre for Health, Economics Research and Evaluation (CHERE), University of Technology, Sydney
Survey no: 
Kees van Gool
Health Policy Issues: 
Funding / Pooling, Access, Remuneration / Payment, HR Training/Capacities
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? yes no no no no no no
Featured in half-yearly report: Health Policy Developments 7/8


Australia's Productivity Commission released a report in December 2005 recommending a large number of reforms to do with the training, demand, supply and distribution of Australia's Health Workforce. This survey reports on the problems and recommendations identified by the Productivity Commission, as well as the Government's actions in the area of workforce reform since the release of the report.

Purpose of health policy or idea

In June 2004, the Council of Australian Governments (represented by the heads of each of the national State and Territory Governments) invited the Productivity Commission to investigate health workforce issues, including the demand and supply pressures over the next 10 years. The investigation took a broad, whole-of-government perspective, including health and education considerations for the full range of health workforce professionals.  The Council instructed the Commission to look at the particular health workforce needs of rural areas.

The Productivity Commission is the Australian Government's principal and influential review and advisory body on microeconomic policy and regulation. 

Main points

Main objectives

The objectives of the analysis were to:

  • Consider the institutional, regulatory factors across both the health and education sectors affecting the supply of health workforce professionals, such as their entry, mobility and retention.
  • Consider the structure and distribution of the health workforce and its consequential efficiency and effectiveness.
  • Consider the factors affecting demand for services provided by health workforce professionals.
  • Provide advice on the identification of, and planning for, Australian healthcare priorities and services in the short, medium and long-term.
  • Provide advice on the issue of general practitioners in or near hospitals on weekends and after hours, including the relationship of services provided by general practitioners and acute care.

Type of incentives

None of the recommendations contained in the Commission's report directly target the demand side of the health workforce, but do impact on the supply side.  A number of these are structural recommendations that will impact on the professional group's control over workforce numbers.

Some recommendations will make it easier for the health care workforce to become more mobile.  For example, current registration procedures are State based and impose barriers for the workforce to relocate.  The Commission recommends a national registration agency to reduce variation in standards, duplication and enhance mobility.

Another set of recommendations target Australia's Medicare payment system.  Medicare is a fee for service system that subsidises health care services provided by medical practitioners.  Medicare has, for a long time, been restrictive in the sense that it inhibits innovation and flexibility in the provision of health care services other than medical practitioners.  The Commission recommends that the Government introduce rebates for a wider range of delegated services and thereby encourage better use of available health workforce skills, beyond the current medically qualified base.

Groups affected

Professional groups and medical providers

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low low very high
Transferability strongly system-dependent system-dependent system-neutral

The recommendations do address several structural deficiencies in Thus far, some of the potential 'losers' have only expressed public concern over these issues but have not manifested themselves into a large public debate. But of course this may change once the Federal Government starts considering implementing these recommendations.  Public visibility may rise as the stakes get higher.

These recommendations are a reflection of the idiosyncratic nature of the Australian Health Care System.  However, recommendations that reduce monopoly power, and create a more flexible workforce have universal applications.   

Political and economic background

During the 1980's and 1990's there was a general view that Australia had an over-supply of health workers.  This view changed around the turn of the century when, very suddenly, there was a perceived shortage.  This was primarily evidenced in three ways:

  • Nursing workforce shortages, estimated by Australia's Medical Workforce Advisory Council to be in the order of 10,000 to 12,000 - requiring at least a doubling of current graduate completions;
  • General practitioner shortages, estimated to be in the order of 800 to 1300 or around 4% to 6% of current workforce levels.  This sector has also witnessed large fee rises between the 1996 and 2003- consistent with the notion of workforce shortages.  
  • Current and emerging shortages in the majority of medical specialities.

Prior to the emergence of evidence on workforce shortages, the government's policy towards the workforce has been to restrict numbers.  This general restrictive policy saw initiatives such as limiting the number of university places, immigration restrictions and restricting access to Medicare provider numbers (such numbers are needed in order for a provider to be eligible for Medicare subsidies).

The most immediate political problem associated with workforce shortages are barriers to health care access in form of higher out-of-pocket fees and waiting lists/times for emergency departments and elective surgery in public hospitals.  Both issues attract considerable media attention and are important political problems at both the national and State government levels.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? yes no no no no no no

Origins of health policy idea

The majority of ideas contained in this report are not new. A large number of professional groups have been trying to get access to Medicare subsidies for a long time. For example, midwives' associations have unsuccessfully lobbied successive governments for their own Medicare subsidies.  Until recently, these calls have been rejected and Medicare has remained within the domain of medical providers (with the one exception of optometry). What has changed over the last few years is the Medical workforce environment - from a perception of oversupply to one of shortage.  As mentioned earlier, workforce shortages pose significant access, and therefore political problems.  This change has meant that the Government may be more receptive for calls of widening Medicare eligibility.  Furthermore, there is now a stronger economic argument in that  

Initiators of idea/main actors

  • Providers
  • Others

Approach of idea

The approach of the idea is described as:

Stakeholder positions

As with most Productivity Commission inquiries, organisations and members of the public are invited to make submissions.  These submissions become public documents and may become part of the final report.  The various professional groups' positions were in line with what would be expected.  Those groups that stood to lose from the Commission's recommendations opposed them and those that stood to gain agreed with them.

The Federal Department of Health and Ageing supported allied health professionals providing primary care type services that are currently being met by general practitioners. This is perhaps a surprising position given their previous record of opposition to widening Medicare eligibility.

Thus far, we've categorized stakeholders' influence as 'neutral'.  This is because of the nature of independent inquiries by the Commission.  The influence of certain groups may change once these recommendations are considered for implementation.

Actors and positions

Description of actors and their positions
Medical provider groupsvery supportiveopposed strongly opposed
Non-medical provider groupsvery supportivesupportive strongly opposed
Health Departments
State and Federal Health Departmentsvery supportivesupportive strongly opposed

Influences in policy making and legislation

The Productivity Commission's report has not resulted in any legislative changes or input thus far.

Legislative outcome


Actors and influence

Description of actors and their influence

Medical provider groupsvery strongneutral none
Non-medical provider groupsvery strongneutral none
Health Departments
State and Federal Health Departmentsvery strongneutral none
Non-medical provider groups, State and Federal Health DepartmentsMedical provider groups

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

The Commission's report was only released in January 2006 and thus it is still early days to report on the adoptions and/or implementation of any of the recommendations. However, there already two examples where the Coimmission's report has had direct or indirect impact.  These are:

1. At a meeting of Australian national, state and territory health ministers on April 7 2006, participants agreed to a national scheme of portable medical registration to improve the mobility of the Australian medical workforce. The portability scheme will enable a medical practitioner who has been granted portable registration by one state or territory medical board, to practise in any other state or territory in Australia without having to:

  • undertake any formal (substantive) process to obtain registration,
  • pay a separate application fee, or
  • notify the medical boards of the other jurisdictions before commencing to practise in those jurisdictions (except where there have been conditions placed on the doctor's registration).

Health Ministers endorsed proposed legislative changes for establishment of the portability scheme, and for jurisdictions to use their best endeavours to make the necessary amendments to their legislation by June 2007.

2. The Federal Government has announced that it will create a Medicare item for psychologists - making them eligible for Medicare subsidies.  This reform has the intention of providing greater access to psychology services and potentially reduces demand for general practice consultations that dealt with mental health issues.

Monitoring and evaluation

Not applicable

Results of evaluation

Not applicable

Expected outcome

The overall aim of the Productivity Commissions report has been to make recommendations that will improve the flexibility of the workforce and reduce control over supply that currently resides with some of the professional groups.  It also aims to reduce the inherent anti-competitive side-effects of the Medicare program which provides public funding to a restrictive number of medical provider types.  If the recommendations are implemented and reduce monopoly power over training places, these would be a welcome reform. 

However, the Productivity Commission has been very limited in its scope to make recommendations on the ways that providers are paid and its impact on the workforce.

Impact of this policy

Quality of Health Care Services marginal neutral fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low low very high

Standardising accreditation and registration processes should create a more mobile work force.  This may impact on the mal-distribution of the work force in some geographic areas of Proposed changes to Medicare will generate greater access to allied health care workers - which, in some instances, will substitute for primary care services that have traditionally been in the domain of general practitioners.

However, as mentioned above, the Productivity Commission has taken a very narrow view of payment options and has taken Australia's current fee-for-service system as a fait accompli.  This is despite the widespread evidence that such systems create incentives that are at odds with an efficient, well integrated and coordinated workforce.

In other words, making allied health services more accessible may very well be a good idea - but that doesn't necessarily mean that they too should be paid for under a fee-for-service arrangement.


Sources of Information

The Productivity Commission's report on Australia's Health Workforce can be found at:

Author/s and/or contributors to this survey

Kees van Gool

Suggested citation for this online article

Kees van Gool. "Options for Health Workforce Reform in Australia". Health Policy Monitor, April 2006. Available at