Cost impact of high staff turnover on primary care in remote Australia
Yuejen Zhao A , Deborah J. Russell
B F , Steven Guthridge C , Mark Ramjan A , Michael P. Jones D , John S. Humphreys E and John Wakerman B
A Northern Territory Department of Health, PO Box 40596, Darwin, NT 0800, Australia. Email: yuejen.zhao@nt.gov.au; mark.ramjan@nt.gov.au
B Flinders Northern Territory, School of Medicine, Flinders University, PO Box U362, Casuarina, NT 0815, Australia. Email: john.wakerman@flinders.edu.au
C Menzies School of Health Research, PO Box 41096 Casuarina NT 0811, Australia. Email: steve.guthridge@menzies.edu.au
D Faculty of Human Sciences, Macquarie University, North Ryde, NSW 2109, Australia. Email: mike.jones@mq.edu.au
E Monash Rural Health, Monash University, PO Box 666, Bendigo, Vic. 3552, Australia. Email: john.humphreys@monash.edu
F Corresponding author. Email: deb.russell@flinders.edu.au
Australian Health Review 43(6) 689-695 https://doi.org/10.1071/AH17262
Submitted: 14 November 2017 Accepted: 20 July 2018 Published: 30 August 2018
Journal Compilation © AHHA 2019 Open Access CC BY-NC-ND
Abstract
Objectives The aim of this study was to estimate the costs of providing primary care and quantify the cost impact of high staff turnover in Northern Territory (NT) remote communities.
Methods This cost impact assessment used administrative data from NT Department of Health datasets, including the government accounting system and personnel information and payroll systems between 2004 and 2015, and the primary care information system from 2007 to 2015. Data related to 54 government-managed clinics providing primary care for approximately 27 200 Aboriginal and non-Aboriginal people. Main outcome measures were average costs per consultation and per capita, cost differentials by clinic, year and levels of staff turnover. Linear regression and dominance analysis were used to assess the effect of staff turnover on primary care costs, after adjusting for remoteness and weighting analysis by service population. Both current and constant prices were used.
Results On average, in constant prices, there was a nearly 10% annual increase in remote clinic expenditure between 2004 and 2015 and an almost 15% annual increase in consultation numbers since 2007. In real terms, the average costs per consultation decreased markedly from A$273 in 2007 to A$197 in 2015, a figure still well above the Medicare bulk-billing rate. The cost differentials between clinics were proportional to staff turnover and remoteness (both P < 0.001). A 10% higher annual turnover rate pertains to an A$6.12 increase in costs per consultation.
Conclusions High staff turnover exacerbates the already high costs of providing primary care in remote areas, costing approximately A$50 extra per consultation. This equates to an extra A$400 000 per clinic per year on average, or A$21 million annually for the NT government. Over time, sustained investments in developing a more stable primary care workforce should not only improve primary care in remote areas, but also reduce the costs of excessive turnover and overall service delivery costs.
What is known about the topic? Population size and geographical remoteness are important cost drivers in remote clinics, whereas elsewhere in Australia the high use of short-term staff to fill positions has been identified as a major contributor to higher nurse turnover costs and to overall health service costs. Nursing staff expenditure accounts for a large proportion (46%) of total expenditure in NT remote health services, whereas expenditure on Aboriginal Health Practitioners (AHPs) comprises only 6%. Annual nurse turnover rates in remote NT clinics average approximately 150%, whereas levels of 40% in other contexts are considered high.
What does this paper add? Annual expenditure for NT remote clinics has increased, on average, by 10% per annum between 2004 and 2015, but small declines in real expenditure have been observed from a maximum in 2012. Expenditure on nursing staff comprises 40% of overall expenditure in remote clinics, whereas expenditure on AHPs comprises less than 5%. The cost impact of every 10% increase in remote nurse and AHP annual turnover has been quantified as an extra A$6.12 per primary care consultation, which equates, on average, to an extra A$400 000 per remote clinic, and an extra A$21 million overall for the NT Department of Health each year. The average real expenditure per primary care consultation has decreased from A$273 in 2007 to A$197 in 2015, representing a statistically significant linear trend reduction of A$7.71 per consultation annually.
What are the implications for practitioners (and other decision-makers)? Adjusting policy settings away from the high use of short-term staff to investment in appropriate training ‘pipelines’ for the remote primary care workforce may, in the medium and longer term, result in reduced turnover of resident staff and associated cost savings. Targeted recruitment and retention strategies that ensure individual primary care workers are an optimal fit with the remote communities in which they work, together with improved professional and personal support for staff residing in remote communities, may also help reduce turnover, improve workforce stability and lead to stronger therapeutic relationships and better health outcomes.
Additional keywords: health funding and financing, Indigenous health, primary health care, rural and remote health, workforce.
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