Getting to grips with the earnings for a GP in Australia

Doctors notes

Doctors notes

The amount a GP earns in Australia is a subject of much discussion. Here’s our take on it, based on feedback from some of our clients across Australia

Almost all GPs are paid on a “fee per service” system. This means that you get a proportion of the income generated each time a patient comes to see you. Usually, the “percentage of billings”, as it’s called, is around 65% to 70%. Thus earnings are not set – but you do earn in direct proportion to the number of patients, the age and the complexity of the medicine you do.

The data you need to calculate your likely earnings is as follows:

Average bill x number of patients per hour x number of hours per day x number of days per week x number of weeks worked per year

(N.B. You’ll only get paid when you see patients – so there’s no holiday pay or sick pay or pensions.)

Based on discussions with various GPs and clinic owners in Australia, these are typical numbers to use:

Average bill

$50 (it can be higher). This allows for the basic Medicare bill of $37.05 being supplemented by longer appointments and or children and the elderly (both of whom are paid at a higher rate) – and some work in the evening and at weekends

Average patients per hour: 4.5

Hours consulting patients per day: 8 (excluding any breaks for lunch etc)

Days worked: 5 per week

Weeks per year: 46 (this allows for 6 weeks of holidays)

Using these numbers, the annual billings amount to $414,000.

If you are on a 65% deal, then earnings for you are: $269,100

If 70%, then $289,800

These figures are before deducting costs (such as MDU, pension, home office expenses etc). Then you need to deduct tax, which at this level of income is around 37%

By the way, the distinction between 65% and 70% isn’t a simple one. To achieve billings of over $400,000, you’ll need the support of the practice manager and the nursing team to help with setting up appointments, dealing with the vagaries of the Medicare billing system and helping with care plans etc. The needs of the local population make a difference too – more complex patient needs mean higher bills. Because of this, there is often little or no difference in income for a GP between a practice offering 65% and one offering 70%

Just to give you some real world figures based on conversations and emails with clinics over the past few months:

  1. Last week a clinic in QLD said that the doctors there were billing between $2,000 to $3,000 per day. At 65% of billings, this is $1,300 to $1,950 of income for the doctor per day
  2. A clinic in Perth said in early 2016 that the GP we had recruited for them was billing on average $3,500 per day.
  3. The annual billings at a corporate group of clinics are stated as being $480,000 per GP. At 65% of billings, the GPs are earning $317,000  (N.B. this is an average across a lot of GPs and there will be variation depending on hours worked and the locations etc). The average bill is over $50
  4. A GP in the Melbourne area, billed $73,000 over an 8 week period in late 2016 (data based on actual figures submitted by the practice). This equates to $1850 per day of billings and earnings (or $425,500 annually). As this particular GP is on a contract with 70% of billings, the earnings would be $1,295 per day (annualised, based on 46 weeks, this is $297,850)

 

 

 

 

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Susanne