Let's meet our 2 Drs from a previous blog again - SM & GT. This time they're joined by a third: HS.
SM is a GP.
HS is a hospitalist.
GT is still thinking!
Consider the cost of seeing a patient by the first 2. As a GP, SM is based in the community. Patients come to see him and he has access to unreferred patients (a big plus compared to HS).
Contractors (SM is one) typically pay the surgery owner somewhere between 25-35% of their billings to see patients. I'm told the owners in turn only make about 10-15% profit on that.
So, in order for a fully qualified, board certified specialist to see a patient in the community, he or she has to spend somewhere in the vicinity of 25% of their fee just to enable that visit. In other words, General Practice is a small business and the cost of running the service is borne by the professionals themselves.
Now consider our colleague HS. He sees patients in the hospital. Who bears the cost of facilitating that encounter? Why, us ofcourse! As tax payers.See here for typical costs incurred at hospitals
Hospitals are federally funded and essentially are a service run by the Govt.
No pretext of making profits here (not to be confused with savings). Now, you might say hospital tariffs are fixed whereas GPs can and do charge what they like.
True, but the principal difference in funding stands.
Equally, market forces rule and we know greater than 90% GP visits are Bulk Billed.
Having analysed the above, what option do you think GT went for?
Is there a 3rd way?
Food for thought dear readers
Happy New Year to you all.
Gaurav
SM is a GP.
HS is a hospitalist.
GT is still thinking!
Consider the cost of seeing a patient by the first 2. As a GP, SM is based in the community. Patients come to see him and he has access to unreferred patients (a big plus compared to HS).
Contractors (SM is one) typically pay the surgery owner somewhere between 25-35% of their billings to see patients. I'm told the owners in turn only make about 10-15% profit on that.
So, in order for a fully qualified, board certified specialist to see a patient in the community, he or she has to spend somewhere in the vicinity of 25% of their fee just to enable that visit. In other words, General Practice is a small business and the cost of running the service is borne by the professionals themselves.
Now consider our colleague HS. He sees patients in the hospital. Who bears the cost of facilitating that encounter? Why, us ofcourse! As tax payers.See here for typical costs incurred at hospitals
Hospitals are federally funded and essentially are a service run by the Govt.
No pretext of making profits here (not to be confused with savings). Now, you might say hospital tariffs are fixed whereas GPs can and do charge what they like.
True, but the principal difference in funding stands.
Equally, market forces rule and we know greater than 90% GP visits are Bulk Billed.
Having analysed the above, what option do you think GT went for?
Is there a 3rd way?
Food for thought dear readers
Happy New Year to you all.
Gaurav
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