Review of Australian Government Health Workforce Programs

2.4 Identification of key health workforce issues and challenges

Page last updated: 24 May 2013

The Australian health system has undergone extensive change over recent years. It is important to understand these trends and how they will impact on the future demand for health services and health practitioners. The changing demand on health services will have implications for health spending and government policy especially in relation to education, training and distribution of the health workforce.

Australia’s health workforce has a traditional base of professions: medicine, dentistry and nursing; and allied health professional disciplines such as physiotherapy. These professional groups have well-established and strongly delineated roles in the delivery of services. Traditionally, services have been built around professional/discipline silos with often narrowly defined roles and responsibilities; and with clinical pathways and referrals built around disciplines. This can result in overlap of assessment processes and an experience for the patient or client which can be both confusing, alienating and inefficient from a system perspective. Patient service needs are often provided through multiple short or single discipline interventions. There has traditionally been a strong focus on providing services in an acute setting, in specific models of care; with siloed clinical governance and supervision.

This section of the review outlines these issues to inform the later discussion of Commonwealth health workforce programs. The aim is to allow current investments to be considered within the overall context of workforce development in an environment of competing pressures and increasingly scarce resources.

Increasing demand for health services

As discussed previously, data shows that despite large increases in the numbers of people employed within Australia’s health workforce, demographic factors mean that there has been only a slight increase in the number of full time equivalent practitioners, many of whom are due to retire shortly. In addition to these supply side pressures, the demand for health services is projected to increase, for a variety of reasons including increased chronic disease, greater consumer expectation and a treatment model built around short-term acute interventions. These health service pressures will require the health workforce to undergo reform to current practices in order to meet demand.

Ageing population

Given decreasing fertility rates and mortality, Australia will experience further ageing of its population over the next three decades. Overall, the proportion of the population that is old (65 to 84 years of age) is expected to more than double between 2002 and 2042, and the proportion of the population that is very old (over 85 years of age) is expected to triple in the same time. The ageing of the population is projected to require a greater need for health services and hence increased health spending.25

As the population ages it is expected that they will utilise certain services more than others requiring greater supply of certain health practitioners. Older Australians use general practitioner (GP) services at twice the rate of younger people. Hospital admissions almost triple among older populations with length of hospital stays increasing with age, rising to eight days for patients aged 85 years and older. Demand for pharmacy services also increase with age with research showing that approximately 25% of people aged over 65 years used four or more medications concurrently, which increases the risk of drug interaction and hence adverse events.26 Older Australians will also utilise greater rehabilitation, subacute, disability and mental health services.

Burden of disease

The prevalence of many chronic diseases is increasing in Australia which will impose even heavier demand for health services and therefore health workers. The results of the 2007-08 National Health Survey indicated a high prevalence of chronic diseases among the Australian population, including cancer (2%), diabetes (4%), asthma (10%), long-term mental or behavioural conditions (11%), arthritis (15%) and heart disease (16%).27

The increasing occurrence of chronic disease has been correlated with earlier detection and improved treatments for conditions which may have previously led to an early death, as well as a number of poor lifestyle behaviours such as tobacco smoking, physical inactivity and poor diet. Chronic diseases include heart disease, stroke, cancer, depression and diabetes and are characterised by their long development period with multiple factors leading to their onset, and a prolonged course of illness. This often leads to other health complications such as functional impairment or disability. Early detection of chronic diseases is resulting in reduced mortality, with a corresponding need for care across a longer span of time.28

The increasing prevalence of chronic disease has implications not only for the number of health workers required in the future but also the skill mix and models of care required for optimum treatment. Multi-disciplinary and team-based care is becoming increasingly important in the management of many chronic diseases so that the patient is at the centre of his or her own care rather than a “command and control” model. Additionally, a significant proportion of chronic illnesses are preventable, indicating that there are considerable gains to be made both economically and for quality of life through greater concentration on health education and monitoring of high risk patients.

In other words, current trends indicate significant demand for specialised acute health services with suboptimal and costly results, when investment in primary care, health promotion and disease prevention efforts would produce better health outcomes and reduce cost.

Increasing consumer expectations and higher disposable incomes

There is a yawning gap in the degree to which health consumers have access to information about preventative health and health maintenance. More affluent health consumers are much more aware of the type of care available, the actions they can take and the results they may be able to expect from treatments. This has increased the demand for such services.

Greater income coupled with consumer demand for preventative health care and treatment, including advances in surgery has led in more affluent populations to increases in expectation of health service quality, access and demand.29

However, more disadvantaged communities, particularly rural, remote and Aboriginal and Torres Strait Islander communities often lack access to information, frequently have minimal internet access and unreliable or non-existent transport to community facilities and services. This can lead to neglected or poorly managed chronic conditions which then become acute.

It is important to bear in mind that internationally and domestically, health models which place the patient at the centre of his or her own care, and engage health consumers meaningfully, are strongly evaluated as providing the best quality of care, especially for chronic conditions, as well as reducing the economic drain of escalating acute care admissions.

Health workforce supply and future projections

In the context of increasing demand for health services and current shortages, a workforce projection study Health Workforce 2025 (HW2025) was undertaken by HWA to assist in future workforce planning. The study aimed to model future health workforce supply and demand across a number of possible policy scenarios taking into account the ageing population and current service utilisation rates.

Health Workforce 2025 – Doctors, Nurses and Midwives (Volumes 1 and 2) were considered at the SCoH meeting in April 2011 and Volume 3, Medical Specialties, was considered in November 2012. Future iterations are intended to cover other health workforces including dental and allied health professions. A detailed summary of the Health Workforce 2025 report – Volumes 1, 2 and 3 can be found at Appendix ii.

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Health Workforce 2025 study key findings30

HWA modelled various workforce scenarios as part of HW2025 such as:

  • Innovation and reform – explores the projected impact of a number of possible reform initiatives including increased workforce productivity, decreased demand for health services and for nurses specifically, increasing workforce retention rates;
  • Immigration – examines two scenarios that restrict the level of immigration of doctors and nurses to either 50% of current levels by 2025 (medium self-sufficiency) or to 95% of current levels (high self-sufficiency) by 2025.
  • Training – calculated the number of graduates required for supply to meet demand in a given year according to the scenario modelled; and
  • Other impacts – these include examining the effects of:
    • an under-supply of 5% in the medical and nursing workforce at the baseline year of modelling (2009), rather than supply meeting demand, the assumption used for all other scenario modelling;
    • a 2% increase in demand beyond current predictions for health services such as may arise from the effects of an ageing population; and
    • capping working hours (doctors only) at 50 hours per week to reflect an observed trend of a reduction in working hours for the medical workforce.

All scenarios were compared against a comparison or “do nothing” scenario. The comparison scenario shows that if health services continue to be delivered as is, with no change in policy, there will be a shortage of 109,490 nurses and a shortage of 2,701 doctors by 2025. The immigration scenario modelling shows that the Australian health workforce has become significantly reliant on the migration of doctors and nurses to Australia as well as on international students graduating from Australian universities who eventually settle in Australia.

As with any modelling, there are limitations and caveats, and various criticisms of the models have legitimately been made. However, given the previous lack of collated information, it is generally conceded that the HWA work represents a substantial advance in providing data as a foundation for planning.

Projected training requirements vary depending on which changes to policy settings being proposed. But there are clear practical constraints on the capacity of the system to provide clinical training, which means that substantially increasing the numbers of students in training in a given health profession may not be feasible. The larger numbers of clinical placements required are likely to be unobtainable in some circumstances.

HWA modelling suggests that the policy levers that have the most significant impact on health workforce service delivery are innovation and reform measures, which potentially lead to significant productivity gains and lowering of demand for services.

Productivity gains can be made through workforce reforms such as changing models of care, adjustments to practitioners’ skills mix, health professionals working to their full or expanded scope of practice, and technological changes, such as utilising ehealth or telehealth innovations.

Lowering demand could be achieved through better health promotion and prevention programs. Options for improving workforce retention (nurses only) include improving the workplace environment (such as provision of adequate equipment and resources), involvement in decision making, leadership support and the ability to practise to the full scope of practice.

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Figure 2.4: Outcomes of innovation and reform scenarios – projection for doctors

Figure 2.4: Outcomes of innovation and reform scenarios – projection for doctors D

Figure 2.5: Outcomes of innovation and reform scenarios – projections for nurses

Figure 2.5: Outcomes of innovation and reform scenarios – projections for nurses D

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Given significant attrition in both nursing education and in nursing careers, increasing the number of nursing student places alone will not address the nursing shortage. As demonstrated in Figure 2.5 above, measures to improve workforce retention projected a significant impact in reducing workforce shortages.

Workforce retention increased dramatically in 2007-08, with speculation that this was caused by the impact of the global financial crisis on nurses’ retirement plans.

Whatever the cause, a continuation of these exit rates could cause a decrease of 77% in the shortage forecast by the HWA. The best case scenario using this 77% reduction is a shortage of around 25,000 nurses. The reality is likely to be somewhere between this figure and HWA’s more extreme projection. HWA will continue to update its 2025 projections as more data becomes available, nevertheless this is still a large projected shortfall regardless of the scenario modelled.

This volatility in the forecasts illustrates the difficulty of making reliable predictions in the area of workforce, and the many challenges facing policy makers seeking to make investment and planning decisions in this area. The consequences of investment decisions made on the basis of poor or inadequate data are considerable.

There has been much academic debate as to whether there is in fact a shortage of doctors in Australia, which is not surprising given the substantial increase in domestic graduate numbers outlined earlier. The Too Many GPs research report states that over-servicing by GPs is showing up in high bulk-billing rates and is an indicator of over-supply in Australia (with the exception of some remote areas).31 The report has some useful observations and has prompted debate. It needs to be noted that HWA has disputed some aspects of the methodology of the Too Many GPs report.32 While new research and an alternative perspective is useful, the majority of stakeholders consulted during this review consider the HWA data at least a useful starting point for workforce planning.

HWA modelling indicates that increased demand and decreasing working hours for doctors is likely to increase the projected workforce shortage. The report found that there was a maldistribution of doctors across regional and remote areas. The modelling also indicates that the maldistribution of doctors is even more highly problematic in the case of medical postgraduate training (specialist training) which will need to be increased in line with increasing medical graduate numbers and graduate demand. If the availability of advanced training places is kept fixed at the number required for current need then there will be an increased pool of pre-vocational doctors that are unable to move through training. However, if training places are set according to increasing demand then the specialist workforce will expand at a greater rate.

Workforce data showed the numbers of medical specialists is increasing, but the workforce is not evenly distributed. There is a growing trend towards specialisation and sub-specialisation, and an insufficient number of generalists. The specialties estimated to be in shortage by 2025 are obstetrics and gynaecology, ophthalmology, anatomical pathology, psychiatry, diagnostics radiology and radiation oncology. The specialties of cardiology, gastroenterology and hepatology and surgical specialties are currently meeting demand for health services, however projections indicate that there will be an increasing number of these specialists, exceeding projected demand by 2025.33

The policy environment and the shift to primary care

It is important to recognise the implications of wider changes to health policy for the development of the health workforce. In particular, the national health reform process has led to a shift in focus away from acute care and toward more coherent delivery of joined up primary health care with a focus on the prevention of chronic disease. This is entirely rational, both from the point of view of community wellbeing, and from a budget and expenditure perspective, with, ideally, an emphasis on early intervention and preventative health initiatives rather than expensive acute and crisis care.

General practice has traditionally been the initial ‘gateway’ to the health system. Recent initiatives have shifted responsibility for even more health services to the primary care setting. Regionally based agencies such as Medicare Locals have an expanded role and an overarching responsibility for health care planning in their communities.

Over the past nine years, since 1 July 2004, general practices have had access to Medicare rebates for the development of chronic disease care plans. Rebates are also available for allied health sessions that are delivered as part of those plans. An important development in primary care in the 2010 budget was for the first time Medicare rebates became available for nurse practitioners and eligible midwives. The Practice Nurse Incentive Program (PNIP), which commenced in January 2012, provides up to $125,000 a year to eligible general practices to employ practice nurses working to undertake activities such as immunisation, wound management and cervical screening, as well as care coordination for clients with chronic conditions. PNIP is discussed in more detail in Chapter 7.

Nationally and internationally, it has been increasingly recognised that people with chronic and aged related diseases are being admitted and treated in acute care where they may be more appropriately, safely and efficiently cared for in the community. Hospitalisation may have secondary impacts, such as hospital-acquired infections, falls, reduced strength and mobility. Hospitalisation of patients with chronic diseases results in pressure on ‘beds’ for clients who require admission for acute conditions, to have surgery or to have diagnostic tests performed.

Increasingly, jurisdictional health departments have developed programs to reduce ‘unnecessary admissions and readmissions’ of these clients. For example, NSW has a chronic care program (Connecting Care) and Victoria has the Hospital Admission Risk Program (HARP). These programs enhance the connection between general practices/primary care and the acute care sector, especially at client ‘transition’ points: on discharge from an admission or following assessment on presentation at emergency departments. The overall aim of these programs is to improve inter-disciplinary primary care in the community, empowering clients and their carers to manage their own health and to trigger early intervention strategies which would reduce the likelihood of admission to the acute sector.

At the national level, the Royal Australian College of General Practitioners (RACGP) is advocating that the new care model referred to as the ‘patient-centred medical home’ needs to be seriously explored in Australia. This is evidence that major stakeholders are interested in developing enhanced primary care models to better meet community needs in the rapidly changing health care environment.

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Box 2.4: The medical home model34

The patient-centred medical home is described as a health care setting to which patients feel they “belong”, providing more structured, long-term care rather than episodic treatment of disease.

The underlying concept of this patient-centred medical home system is that the GP and the practice develop a relationship with the patient. It can also be described as a “partnering” relationship – in which the GP and other health professionals work with the patients, and quite often their families, helping them to manage and organise their own care.

The model has an emphasis on understanding and respecting each patient’s needs and preferences, as well as their culture and values. The core principles of this model revolve around the provision of care that is:

  • patient-centred;
  • comprehensive;
  • team-based;
  • coordinated;
  • accessible; and
  • focused on quality and safety.

The model has been derived from experiences in the United States, where a growing body of evidence is beginning to be compiled about this model of service delivery.

In the Australian context, the debate around this model is examining both its clinical merits as well as potential funding systems to support its delivery. RACGP representatives have also raised issues about how existing structures, such as Medicare Locals, could design activities to support this type of comprehensive approach to primary care and champion this approach.

The Commonwealth has recently flagged its interest in working with stakeholders such as the RACGP and General Practice Registrars Australia (GPRA) to explore evidence-based approaches to implementing this type of system.

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Despite these moves, the provision of acute care in the Australian hospital system remains, necessarily, the focus of intense community concern; and the health care costs of the acute sector have also continued to escalate.

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Increased skills utilisation and productivity - national industry perspective

It can be argued that health industry productivity has been largely driven by advances in technology, such as enhanced diagnostic tools, better prostheses, more reliable devices and more effective medicines,35 rather than through reform in the way the services are delivered in terms of workforce. Additionally, as has become evident during various consultations and roundtables in the course of this review, disciplinary demarcations have meant that the benefits of advances in technology have not been fully realised. Contemporary workforce structures have not proven to be particularly responsive to changing population needs nor in some cases to technological advances.

Because of its traditional professional base and heavy reliance on public funding, the health industry has taken longer than other industries to face the realities of the need for changes in work practices and management reform. With some notable exceptions, the solutions generated have focused heavily on producing more of the existing workforce to meet demand, paying financial incentives to try to encourage rural distribution of the health workforce in both education and practice programs. Only relatively recently it appears, has the focus shifted to considering innovative responses through expanded practice and skill redefinition.

The health industry is one of Australia’s largest, with around 1.2 million people employed (if those in the social assistance sector are included). The health and social assistance sector is also a highly educated sector, with more than 77% having post-school qualifications, compared to other industries at 66%.36

Health is competing for its slice of the financial pie – 8.7% of GDP in 2008 and increasingly competing for new workers with other industries (such as the mining industry).37 As Australia ages, to restate the obvious, there will be increasing demand for health workers.

Skills Australia (now the Australian Workforce and Productivity Agency), a statutory authority, was set up in 2009 to research and assess skill needs across industry, and to inform Governments on policy and on the needs of industry around skills with the aim of enhancing productivity across all industries in Australia.

The Skills Australia report Better use of skills, better outcomes: A research on skills utilisation in Australia (April 2012) examined best practice local initiatives across different industries. The report notes that skills utilisation has emerged as an important policy issue both domestically and internationally, and that skills utilisation is a driver for increased productivity and workforce retention.

Skills utilisation has been shown in Australia to be a driver where the labour market is tight and employers are keen to maximise the skills of their workforce, and where skilled workers are looking for job satisfaction. Skills utilisation is important to maximise the contribution that people make to the workplace and the extent to which an individual’s abilities are harnessed to optimise organisational performance. Further, Skills Australia notes that better utilising the skills of workers increases job satisfaction with better retention.38

Many senior stakeholders within the health sector will freely concede that it is not feasible for the health sector to see itself as protected from the need to find increased productivity and efficiencies in the way services are delivered. Lessons to be learnt from other industries in approaching innovation and increased skills utilisation may assist the health sector in breaking down traditional professional barriers and silos which impede innovation.

Health workforce program and policy implications

Even if substantial reform is undertaken, it is likely that the increasing demand for health services will result in a shortage of doctors and nurses, and a likely shortage of dentists and some allied health professionals. This has consequences for government policy in terms of training, immigration, role reform and incentives used to encourage a more even distribution of health professionals across Australia. A number of training and support issues were highlighted in Health Workforce 2025 which will require government action.

The HWA modelling indicated the most effective policy intervention for meeting the increased demand in health services was adopting a process of reform and innovation to increase the productivity of the future workforce to meet future demand. Along with the use of technology, increased productivity can be gained through role re-design which will allow health practitioners to work at the fullest extent of their scope of practice, encourage greater role flexibility and multidisciplinary learning. Enabling practitioners to utilise more varied and transferable skills will also assist to retain the health workforce.

It is critical that workforce innovation results in not only improved productivity, improved retention and job satisfaction but also that the safety and quality of care is not affected. This requires national coordination across stakeholder groups including professional bodies, industrial bodies, employer groups and professional registration boards. Health professionals themselves must also be consulted and supported through any process of change. While the focus of this review is primarily on existing Commonwealth programs it is important that this pressing need for innovation is acknowledged and that sensible, evidence-based change is embraced in the further development of the initiatives discussed in the chapters to follow.

25 Commonwealth of Australia, Intergenerational Report 2002–03 – Budget Paper 5, Commonwealth of Australia, Canberra, 2002, p. 22

26 Australian Institute of Health and Welfare. Older Australia at a glance: 4th edition, Cat. no. AGE 52. Canberra: AIHW, 2007,pp. 105-115

27 Australian Bureau of Statistics, National Health Survey, 2007-08, Summary of Results, Australia, Cat No 4364.0, ABS, Canberra. 2008

28 Australian Institute of Health and Welfare. Risk factors contributing to chronic disease. Cat No. PHE 157. Canberra: AIHW, 2012, p.5.

29 Productivity Commission , Australia’s Health Workforce, Research Report, Canberra, 2005

30 Health Workforce Australia, Health Workforce 2025 Volumes 1–3, Health Workforce Australia, Adelaide, 2012.

31 Dr Bob Birrell, Too Many GPs, CPUR Research Report March 2013, Centre for Population and Urban Research, Monash University, accessed at

32 HWA, Response to Dr Bob Birrell’s report “Too many GPs”, media release, March 2013, accessed at

33 HWA, Health Workforce 2025, Vol 3 p. 9

34 Royal Australian College of General Practitioners, Laying foundations for the medical home – RACGP Submission to the Minister for Health, Federal Budget 2013-14, March 2013.

35 Productivity Commission, Impacts of Advances in Medical Technology in Australia, Productivity Commission Research Report, Aug 2005, pp. 104-106

36 Skills Australia, Industry Snapshot 2010: Healthcare and Social Assistance, information paper, Skills Australia, Canberra, p. 1

37 The World Bank, Health Expenditure, total (% of GDP), accessed at

38 Skills Australia, Better Use of Skills, Better Outcomes: A research report on Skills Utilisation in Australia, April 2012 pp. 1–2