Outcomes funding, income fragmentation, payroll tax, salaried models and a government that wants value for money are driving the remuneration landscape for general practice into the future.
The question sounds simple enough: how will GPs be making their money in 2033?
A panel at last week’s Burning GP conference in Noosa took a swing at it.
The answer that emerged is that the income picture for general practice is becoming more fragmented, more complicated, more taxed, and more contingent on forces most GPs are probably not tracking closely enough.
From the morning on what general practice might look like in 2033, it was becoming clear already that the income question and the structural questions around general practice are the same thing.
You cannot answer how GPs will be paid in 2033 without also answering what a GP is in 2033, and who is providing what used to be GP work.
The tax problem is getting worse, not better
Let’s start with a number that should be making every practice owner deeply uncomfortable.
Lukasz Wyszynski 0f Hamilton Bailey Lawyers, who has seven years of spreadsheets from real medical practices across Australia, put it plainly: the average medical business makes about 7% profit after payroll tax. Once you account for everything – staff, contractors, independent practitioners, running costs – that drops to around 2%.
“That’s 2% profit margin for a medical business to look after all of its staff and the contractors, doctors, independent practitioners,” Wyszynki told the audience.
“That’s not even CPI.”
The payroll tax problem is not new. But it is worsening, and it is likely to worsen further, according to Wyszynki
The states, not the Commonwealth, administer payroll tax, and their definitions of what constitutes an employment relationship, particularly for GP contractors operating inside a practice, have been tightening steadily.
The Uber-era test cases, the service-to-service decisions, the Revenue NSW rulings: each one has extended the perimeter of what’s caught.
Most practice owners are still operating on the assumption that their contractor arrangements sit outside the threshold or outside the definition. Many of them are wrong, thinks Wyszynski, and most of them don’t yet know it.
Wyszynski’s data makes the arithmetic stark.
A bulk-billing-only practice, under current Medicare rebate settings, loses approximately $7000 per GP per month.
“I can’t make those numbers work, no matter how good I think I am,” he said.
Add payroll tax exposure on top of that, and the operating model for traditional practice ownership becomes genuinely unsustainable for a large proportion of the sector – particularly in metropolitan markets, where there is no rural loading fee revenue to cover the gap.
There was a telling aside earlier in the day, in a different panel where Dr Hamish Meldrum, co-founder of Ochre clinic group, appeared alongside Andrew Cohen of ForHealth.
Meldrum noted, with a hint of relief, that it was “nice to be here with Andrew on stage and not talk about payroll taxes”.
The room laughed, but it maybe shouldn’t have been seen as that funny in the context of the remuneration panel to follow.
The expectation among legal and accounting advisers to the sector is not that this problem gets resolved between now and 2033.
It is that it gets enforced.
The states need revenue. The contractor model that underpins much of Australian general practice will continue to be stress-tested, according to Wyszynski.
GPs who are running or planning to run practices need to be structured properly, advised properly, and not assume that the arrangement that worked last year will still be defensible next year, he warns.
Duncan McIntyre, the head of Medicare Benefits at the Department of Health, Disability and Aged Care, might have come to Burning GP to listen more than anything.
He’s new to the role, but he did signal that the direction of travel on outcomes-based funding is worth examining carefully, because it represents a genuine shift in departmental thinking.
The MyMedicare registration framework is the infrastructure that department is depending on to make outcomes-based funding architecturally possible so it is leaning into practices from a funding signal perspective to get their skates on in terms of registration.
MyMedicare is a mechanism for attributing a patient to a GP not just a visit to a Medicare item number, with the idea of an ongoing relationship that can, in principle, generate longitudinal data on health outcomes.
Related
The department is watching that data. McIntyre signalled clearly that if the evidence supports it – if enrolled, continuity-of-care patients have measurably better health outcomes at lower system cost – there is political and departmental appetite to move funding faster in that direction.
If outcomes-based funding does go this way it would represent a fundamental redesign of the fee-for-service architecture that has governed Medicare since 1984.
AMA president-elect Dr Michael Bonning made a similar argument from the stage earlier in the day: the focus needs to shift from how many patients were seen to what was actually achieved for them.
“Government is looking at cost avoidance, bottlenecks, and patient outcomes,” said one panellist in the morning session.
“We need to shift from measuring capacity to measuring capability.”
The catch is that outcomes-based funding in a system as fragmented as Australian primary care is genuinely hard to design.
What outcomes? Measured how? Attributed to whom, when a patient sees four different practitioners across three different settings?
The department knows this. But the department seems set on the direction of travel so GPs who want to be on the right side of it might need to be engaging with MyMedicare more to get the most out of it.
The fragmented income GP
By 2033, the income profile of a typical GP is likely to look less like a single revenue stream and more like a managed portfolio of income sources, each with its own risk profile, tax treatment, and professional obligations.
The dimensions of that portfolio are multiplying.
A GP in 2033 might simultaneously be a tenant in a practice owned by a corporate or property trust, billing as a “tenant”; a salaried employee for a state government urgent care clinic one or two days per week; a participant in a share or equity scheme with a digital health startup or larger GP corporate; and a private billing operator running complex care services – women’s health, ADHD, mental health, aged care – that Medicare inadequately funds but patients will pay for.
Each revenue stream comes with different tax treatment, different industrial obligations, different indemnity requirements, and different implications for MyMedicare continuity obligations.
The GP who navigates this well in 2033 will need sophisticated financial and legal advice or will belong to a structure that provides it.
It also surely points to how GP training and CPD should start moving – it’s going to be hard to be a good doctor if you don’t understand all these important financial dynamics of your career.
The data on salaried GPs is worth noting.
Burning GP panelist Dr Tim Senior, who works at an Aboriginal Medical Service in Southwest Sydney, pointed out that in the Health Information report, GPs working in AMS settings consistently report the highest levels of job satisfaction of any GP cohort.
“The pay is not more than other people are getting, I can vouch for that,” he noted.
“But the satisfaction is there.”
The salaried model, with its employment entitlements and absence of administrative overhead, is becoming more attractive to GPs managing caring responsibilities alongside practice.
The gender dimension nobody wants to price
Professor Louise Stone, who has spent years researching the experience of women in general practice, did not soften this.
The income of a female GP doing the kind of complex, longitudinal, hard-to-measure work that defines high-quality general practice is systematically undervalued relative to the procedural alternatives available to the same doctor.
“I could earn more surgical assisting than I can earn doing the work that I do. The work that I do is hard — and it is invisible,” she told the Burning GP audience.
The gender pay gap in general practice by 2033 is unlikely to close on its own, suggested Professor Stone.
It will close only if the income structures available to GPs are designed with equity in mind.
And if the move toward outcomes-based funding genuinely rewards continuity, complexity and relationship-based care over volume and speed, that is in principle good for the women who disproportionately provide it.
Whether the funding design actually reflects that value is a different question.
The social contract question nobody wants to answer
Underneath all of the economics – the tax exposure, the funding reform, the income portfolio – there is a harder question that the panel kept circling.
The social contract between GPs and the health system has broken. Most of the GPs in the room knew it. Most of them were trying to figure out how to work around it rather than repair it.
Professor Stone was direct about when it broke: when the government didn’t immunise GPs during covid, but wanted them to do the immunisations.
Dr Alison Green put the more recent breaking point on record: the Medicare card campaigns, the social media messaging, the “ask your GP why they are not bulk billing you” strategy.
“We will not forget,” she said.
It’s a sector scar the government needs to be more cognizant of.
“The social contract’s broken. I agreed when I joined this job that I love that I would give everything I’ve got: all my learning, all my commitment, my kids’ birthday parties, getting up at three in the morning to deliver the babies, in exchange for respect, autonomy, and the right to design my curriculum. And I’ve lost everything on the other side,” said Professor Stone.
The economic consequences of a broken social contract are not as abstract as they might first seem.
They show up in Professor Stone’s work on why female GPs leave the profession.
They show up in Wyszynski’s spreadsheets: practices that lose $7000 per GP per month under bulk billing are practices that will close, convert, or simply stop taking on the complex patients who need them most.
The bulk billing rate is now at 82% and rising.
Professor Stone’s observation about that number was the sharpest thing said in the session.
Will it get to 90% if everyone doing complex care leaves? Yes.
But a 90% bulk billing rate achieved by driving the GPs who do complex, longitudinal, difficult care out of the accessible Medicare system is not a success. It is a hollowing out and one the data will register too late, she said.
What a sustainable GP remuneration model looks like in 2033 – one that keeps the Professor Stones and the Dr Greens in the system, doing the work they were trained to do, in the communities that most need them is a question that nobody on the panel was confident the system knows how to answer.
The direction Duncan McIntyre pointed to – outcomes, continuity, MyMedicare, genuine funding for complex care, on paper, seem to be the right direction.
Whether the political will and the implementation design are equal to the urgency of the problem is unresolved.
One thing is clear: GPs who treat remuneration as something that happens to them, rather than something to actively manage and structure, are going to get hurt.
The income landscape in 2033 will reward those who understand it.
