Bigger hospital and ED spend in GP deserts

An analysis of rural health data has sparked new calls for innovative and modernised funding models.

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The theory that fewer GPs in a given area will lead to higher numbers of costly emergency presentations and hospitalisations has been backed with data yet again, strengthening the call for state-federal funding models.

According to a new report commissioned by the National Rural Health Alliance, the government spends around $850 less on healthcare per person (age standardised) per year if they live outside a major city.

The report, completed by consulting group Nous, measured healthcare expenditure across 10 domains – including the MBS, public hospitals and primary health networks (PHNs) – to calculate the average expenditure per capita across the country, stratified by rurality.

In all, urban (MM 1) regions of Australia received roughly $6.6 billion more in health funding than rural, regional and remote (MM 2-7) areas combined.

One of the curious aspects of the data is that not all funding decreases with remoteness; for public hospitals, PHNs and Aboriginal Community Controlled Health Organisations, funding trends upward according to remoteness.

What drives the disparity, Nous consultants said, is the much lower private hospital and MBS expenditure in the bush.

While urban Australians spend about $1000 in MBS funding per person, people living in MM 2-5 areas spend just over $800 and people in the most remote regions cost the government only $520 each year.

The number of GPs per capita also drops with increasing remoteness, and people living in remote or very remote areas were 8.2 times more likely to report not having a regular GP as a reason for not seeking primary care compared to their urban counterparts.

Conversely, while just 300 people per 1000 present to emergency departments in MM 1 areas per year, this number rises to 400 for MM 2-5 regions and 530 for MM 6-7 regions.

The report authors argue that it’s likely the two trends – fewer GPs and higher ED presentations – are related.

They then go a step further, arguing that the increased use of public hospitals in non-urban areas are a symptom of market failure.

“Market-driven solutions such as private health insurance, the MBS, aged care and the NDIS may be effective in larger metropolitan and regional centres, however, in rural and remote towns prone to thin markets and market failure, the expenditure data indicate that these funding models are not effective in addressing the ongoing challenges faced by rural and remote communities,” the authors said.

“As a result, the workforce largely remains concentrated in metropolitan and regional centres, leaving rural and remote populations with insufficient access to essential healthcare services.

“This, in turn, leads to poorer health outcomes for communities.”

Rural Doctors Association of Australia CEO Peta Rutherford told The Medical Republic that the report findings underscored the recent budget measures, which included tripling the bulk billing incentive and increasing workforce incentive payments, both of which are tiered by rurality.

“This report is demonstrating that the government is focusing in the right places and understands the issues,” she said.

“It’s painting a picture and supports the government’s decisions.”

The RACGP also chimed in, calling the report a “wake-up call” for government.

“State and territory governments, especially in Queensland which has a less centralised population, must recognise this market failure and work with local communities, including councils, to ensure strong access to general practice care,” said college rural chair Dr Michael Clements.

The NRHA, which commissioned the report, said the data created a compelling case for flexible and block funding.

“We are committed to working with federal and state governments, ministers and departments to put things right,” alliance chief executive Susi Tegen said.

“Tweaking around the edges, with trials and funding that stop after three years, has exhausted rural communities.”

There have been more short-term rural health pilots, the RACGP’s Dr Clements said, than a major airline.

For several years now, the NRHA has advocated for rural community-controlled health organisations, which would be similar in composition and scope to the successful ACCHO model.

“Rural communities need government to be more flexible and introduce block or genuine support funding to provide multidisciplinary care for patients,” Ms Tegen said.

“These communities know how to collaborate – they do it every day – but costs of access and delivery are higher [and] the delivery of health care … It does not fit into the model available to urban people.”