As the composition of the medical workforce changes, remuneration and salary structures are changing along with it. These changes are the result of a combination of market forces, and an evolving approach to medical salaries.
For the most part, health care is well behind the corporate world when it comes to innovation in remuneration. Remuneration structures tend to only really come in a few forms:
Fixed salary +/- overtime, penalties, TESL
% of billings
This hasn’t really changed much in the past hundred years. However, trends in healthcare delivery models are starting to influence the way doctors are paid, and the change curve is now accelerating at a great pace.
Services that were once a family-owned business (like a GP practice), a charity (like a hospital), or a government organisation (like prisons, immigration, or defence) are increasingly being corporatised and privatised. Within those structures, remuneration is becoming more innovative and less reflective of practices of the past.
As smaller businesses, and government-run organisations are recruiting from the same pool of doctors, they are being forced to adapt to the market in ways they didn’t before. If this isn’t immediately evident in some areas, it is particularly noticeable in regional and rural areas.
At the moment, despite there being more medical graduates, and a range of incentives and programs to push people into the bush, it’s just not happening in the numbers that are needed. The adaption we see in some of those areas is massive locum rates.
In 2015, it is sometimes possible for an RMO level doctor to work just ninety minutes from a capital city, and earn up to $200 per hour in an emergency department. This is as much as a consultant surgeon makes in some areas. On top of that, is often accommodation, paid travel, and even meal allowances.
This is an example of market forces in action, and it has an exponential domino effect on other areas of the employment market. When an RMO can make $200 per hour, how has anyone got a chance of employing an GP on 65% of billings? Australia’s reliance on locums is something that has a profound effect on medical remuneration, but is kept quiet, almost like a shameful family secret.
So, we’re seeing adjustments in the medical remuneration market to cope with this.
Corporate employers are increasingly offering fixed salaries in areas where this has not typically been the case – like General Practice. Also becoming more mainstream are sign-on and retention bonuses. More recently, performance incentives are being offered.
As hospitals and other government health services are becoming more corporatised, some of these structures are starting to be seen in the engagement of specialist doctors as well. Naturally, there are some specialty areas that are very competitive, and experience the reverse – they can still get people to work for free in fellowships.
Considering these changes, these are my six predictions for medical remuneration in the next ten years:
Flexibility will be key
Employers will need to embrace flexibility in the medical workforce. With the age of medical graduates progressively increasing, new doctors are far more likely to have family responsibilities which will dictate their working hours.
Percentage of billings payments will die a slow death
With changes to Medicare billing structures changing, and more dramatic changes ever-looming, salaried positions will be a more attractive option to many GPs.
Non-salary remuneration will be critical
Additional benefits like incentives (sign-on, performance, retention) will be critical in attracting people to stay in positions. Even childcare, travel allowances, and extra holidays will be on the table.
FIFO will be the only sustainable way to recruit to very remote and some rural areas
Fly-in-fly-out will be the only way to staff very remote areas. Employers will need to accept this and develop workforce and budget models accordingly. These models will be closer to those adopted by the Energy, Mining, and Infrastructure sectors.
Government restrictions like DWS will have to go
This may be an ambitious one, but District of Workforce Shortage restrictions have failed the system in so many ways. Honestly, how are employers supposed to plan their workforce if they don’t know from one month to the next whether their site is DWS or not?
A complete reform of the provider number system, along with a better way to manage the integration of overseas trained doctors into the Australian medical system is needed. Massive incentives to work in areas of critical shortage will be far more effective than the current bureaucratic mess.
The biggest employer of doctors will be the private sector
The private sector will dominate the medical employment market, as privatisation becomes more mainstream. Medical recruitment agencies will also play a greater part, as recruitment and staffing is increasingly outsourced to external organisations.
All of that said, there are so many factors in the market, it is realistically quite hard to predict what will happen. However, based on current trends, and a predilection of our governments towards bureaucracy, we are moving towards a significant tipping point in terms of how we approach medical remuneration.
As the employment market changes, it is critical to have the best foot forward in the job application process.
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https://beathealth.com.au/wp-content/uploads/2015/04/iStock_000008795036Large.jpg18432800Shaun Hughstonhttp://devsite.beathealth.com.au/wp-content/uploads/2016/07/Beat-Health-Logo-PNG-copy-2-300x72.pngShaun Hughston2015-04-09 13:59:592016-09-19 15:24:02Six Ten Year Predictions For Medical Salaries