IBISWorld Market Research
Australia’s ageing population drives demand for GP services.
Melbourne, Australia (PRWEB) November 23, 2013
General practitioners (GPs) are the first point of contact in the medical system. The Federal Government provides assistance to the industry via Medicare by covering the schedule fee of each GP consultation. GPs can charge the schedule fee (bulk-billing) or a higher price, which requires a patient to pay the gap between the schedule fee and the set price. Bulk-billing rates have climbed to about 82% over the past five years, further diminishing the out-of-pocket cost to the patient. Therefore, with out-of-pocket patient costs considerably lowered by Medicare, growth in industry revenue depends on growth in the volume of services provided. IBISWorld industry analyst David Whytcross states “demand for GP services has steadily grown over the past five years as Australia's population increases and ages.” The General Practice Medical Services industry is forecast to be worth $10.1 billion in 2013-14, after strong annualised growth of 3.8% over the past five years and forecast growth of 3.5% in the current year. Older people use the services of GPs more often than younger people because they are more susceptible to disease, chronic illness and minor ailments. They also require more prescription medications and more regular health check-ups.
Similar trends are expected over the next five years. Bulk-billing rates are forecast to remain stable, leaving revenue to grow in line with demand. The population will continue to age, increasing demand for GP services. General practices are expected to expand because larger practices are able to obtain high profit margins. According to Whytcross, “Federal Government initiatives such as Medicare Locals, GP Super Clinics and Medicare rebates for telehealth services will increase the accessibility of GP services across the country, particularly to those in rural and remote areas.” Hence, demand for GP services is expected to increase, driving industry growth.
The General Practice Medical Services industry is characterised by a low level of market share concentration and a high degree of fragmentation. The industry comprises many small-scale businesses that are closely tied to local community needs. According to the Australian Bureau of Statistics, almost half of general practices operated as sole proprietorships and only 1.9% of general practices had 20 or more employees in June 2012. While the industry is consolidating as many practices are growing, the aid of Medicare continues to allow smaller practices to remain viable despite smaller economies of scale. Owner-operators tend to focus on profit maximisation more so than employees of a larger clinic. This focus can result in high profit margins for smaller practices and reduces the need for consolidation. For more information, visit IBISWorld’s General Practice Medical Services report in Australia industry page.
Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau
IBISWorld industry Report Key Topics
This industry is made up of companies and practitioners that primarily provide general practice services.
Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios
About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.