General Practice Medical Services in Australia

 Welcome to the first post of this new “10 things to know” series from Leader Accountancy. We aim to help you make more informed business decisions by providing critical updates on the industries we are currently working with. Just the other example to show we are not like other reactive accountants sitting behind the desk. We do work with you.

The era of the reactive business model is gone and gone forever. To survive this “two-way economic pathway”, you and I have to be actively looking for ways to navigate this strong current, or we will be forgotten.

To fit into your busy schedule, I have selected ten most important points for you to consider. Please feel free to contact us for more information. We can always produce a customised and comprehensive industry report for you.

GP instrust forcast

medical centre industry performance

The General Practice Medical Services industry has grown steadily over the past five years. General practitioners (GPs) are the first point of contact in the medical system, providing direct treatment to patients or diagnosing their problems and referring them to a specialist or a general hospital.

New development

Australia’s population is ageing rapidly, this has created a strong demand for General Practice Medical Services.

The Australian Government has pushed forward with changes to Medicare funding for GPs, with a $5.00 reduction in the schedule fee for a standard consultation expected to be implemented on 1 July 2015 (subject to the passage of legislation).

There are a lot of mergers and acquisitions between GP practices,  the most common intention is to create economy of scale in the larger practices. Bulk-billing rates have increased in these larger scale GPs because administrative and overhead costs are reduced per GP. Larger practices can also use GP services as a lead to attract more patients who then can be referred to in-house specialists.


The competition in this industry is medium and the trend is increasing. The major source of competition between GPs is comparative locations.

GPs also face increased competition from alternative health therapies, e.g. Chinese medicine.


Due to the limitations and regulations, import and export of GP services does not occur.

Capital Intensity

This services industry requires a high level of highly qualified labour input. No costly medical equipment is needed to treat the majority of patients.


GPs are able to provide a wide range of services due to their broad scope of training and expertise.

Key success factors

Establishments should be attractive and welcoming. The location should be easy for people to access and easily noticed. Parking should be convenient.

GPs should target areas of high demand and work at gaining a good rapport with patients and referrers. Pricing should be matched to patients’ ability to pay.

Cost structure

Wages are the biggest cost for GPs. This item accounts for 41% of the total income on average . Rent is about 5% of the total income. After a few other costs, a 25% of profit remains.

Technology and systems

The latest IT innovations have the potential to not only boost practice productivity and reduce administration costs, but also give the doctors an opportunity to conduct consultations remotely.

A streamlined approach to secure electronic records of a patient’s medical history is being developed by federal, state and territory governments through the National Electronic Health Transition Authority (NEHTA).

Revenue volatility

The industry is highly insulated from external economic conditions, enabling the steady revenue growth that has characterised the industry.

Regulation, policy and industry assistance

Extensive requirements have been put into place for qualifications in this industry to ensure high quality medical care for all patients.

GPs receive Australian Government assistance through Medicare as schedule fees. Bulk-billing rate is over 80% over the last five years.


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