Payroll tax risks future of hundreds of clinics: HotDoc survey

Hundreds more general practices could close due to the Victorian Government’s approach to payroll tax, a survey by the medical appointment booking platform HotDoc suggests.
 
In the research, which went out to 310 clinic owners and managers nationally, around one in six (16.5%) reported concern about closures, including the viability of their own clinic.
 
According to a recent survey by Cleanbill, there are 1553 clinics in Victoria, with 16.5% of those equating to around 256 at risk of closure.
 
The HotDoc research indicates that 95% of clinics in Victoria plan to increase patient fees in response to any additional payroll tax burden and operational compliance costs.
 
The average rise would be around $12 for a standard consultation, it reports, meaning out-of-pocket costs are likely to go up to $52.
 
HotDoc founder Dr Ben Hurst – who worked as a doctor and psychiatrist before setting up the booking platform – said concerns over patient access prompted the decision to seek more information.
 
‘One of the things that we’ve seen over the last couple of years … is that accessibility as one of the most important determinants of patient experiences is under threat,’ he told newsGP.
 
‘We’ve seen this payroll tax issue rumbling for some time now.
 
‘We were concerned that it was going to impact that GP access at a greater level, and so we did the survey, and were pretty concerned by the results.’
 
The HotDoc research closely echoes the findings of a newsGP poll run last August, in which 94% of 1543 readers said their clinic would need to raise their fees if the payroll tax burden increases.
 
Of those, more than half (56%) said the fee rises will be more than $20.
 
HotDoc also asked more than 1000 patients about the likely impact of payroll tax changes on attendance, with their feedback suggesting more than one in a quarter (28%) would see their GP less frequently if fees increased, with 7% saying they would stop going altogether.
 
‘When you get to the heart of the cost-of-living challenge in Australia, a really important question to ask patients is “can you afford to see your GP?” Dr Hurst said.  
 
‘Medical centres are not in a position to absorb the increase that they will incur by paying a payroll levy on their on their doctors, and equally patients would find it very difficult to be able to pay that additional $12 per appointment.
 
‘The medical centres that are challenged the most by this are ones that rely on bulk billing, because they aren’t in a position to raise their fees like private clinics.’
 
RACGP President Dr Nicole Higgins said the figures are sobering.
 
‘This gives more evidence of the unacceptable financial pressures on practices in Victoria,’ she told newsGP.
 
‘At a time of a cost-of-living crisis, we have got the Allan govt taxing Medicare.
 
‘We have seen clinics with huge, retrospective payroll tax bills, which mean they simply won’t be able to keep their doors open to their patients.
 
‘This is the last thing the healthcare system needs. We simply can’t afford to lose any more practices due to this new application of payroll tax.
 
‘This will be devastating for the patients and communities that lose their GPs.
 
‘The RACGP is urging the Victorian Government to find a permanent solution – nobody in Australia should miss out on access to timely and affordable GP care.’
 
Further analysis of HotDoc data suggests the amount of clinic closures around the country has accelerated dramatically since 2021, a trend Dr Hurst described as ‘very concerning’.
 
Clinic closures recorded by the platform stood at 15 in 2020–21, compared to 93 in the most recent financial year.
 
While that number is less than the figure gathered by newsGP last year, Dr Hurst said HotDoc tends to have a lower proportion of smaller clinics, which are often those at most risk of closure.
 
According to responses from PHNs around the country at least 184 practices had closed in 12 months, with the rate of new openings occurring at a significantly slower rate. Almost 50% of PHNs were unable or unwilling to provide data at the time.
 
Meanwhile, RACGP Victoria Chair Dr Anita Muñoz told News Corp that the payroll tax issue is ‘the biggest threat to affordable care in our state’.
 
Victoria Treasurer Tim Pallas has previously said he would intervene if any general practice is under threat of closure due to financial pressures.
 
‘This Government has no interest in any GP clinic closing their doors, and I would be inclined to use my “ex gratia” power to prevent that happening were any GP clinic to become insolvent as a result of a payroll tax liability [provided] the clinic had engaged with the [State Revenue Office] in good faith to try and reach a settlement,’ he wrote in a letter that emerged publicly last year.
 
This week, a State Government spokesperson told the Herald Sun that there ‘has been no change to the way payroll tax is assessed or enforced in any sector, including payments made by medical centres to GPs’.
 
‘We will continue to work constructively with GPs, and encourage any clinic with an issue about an assessment to talk to the State Revenue Office,’ they said.
 
Log in below to join the conversation.

general practice payroll tax