Australian Psychologist, September 2010; 45(3): 189–196

The Australian Psychology Workforce 4: An analysis of psychologists in

private practice providing Medicare-funded services

DAVID STOKES1, REBECCA MATHEWS1, BRIN F. S. GRENYER2, & K. STOKES1

1
Australian Psychological Society, Professional Issues, Melbourne, Victoria and 2School of Psychology, University of
Wollongong, New South Wales, Australia

Abstract
There have always been independent private psychology practitioners in Australia, yet in the past payment of their services
was largely by a user-pays model. The introduction of Medicare Benefits for patients, under the Enhanced Primary Care
program in 1999, and Better Access in Mental Health Care in 2006, along with Government-funded mental health initiatives
such as Better Outcomes in Mental Health Care introduced in 2001, has provided an alternative funding model for
independent private psychological services. Introduction of these and other Government-funded programs has raised
questions about the responsiveness of the psychology workforce to meet the changing demands for psychological services
created by these reforms. This study aimed to profile the characteristics of 3,587 independent private psychologists who
provide services to clients under these schemes by analysing their responses to the Australian Psychology Workforce Survey.
Of the 44% of psychologists completing the survey who indicated that they had a Medicare Provider Number, only 61% were
in private practice as their main job. The remainder conducted services for Medicare-funded clients as part of a private
practice in a second job. The demographic characteristics, work roles, client groups and income of psychologists with
Medicare provider numbers are reported.

Key words: Independent private practice, medicare, psychology.

and dental interventions. BOMHC was an initiative

Introduction
to assist General Practice by providing funding for
The introduction of new Medicare Benefits Schedule psychological interventions for patients with mental
(MBS) items1 at the end of 2006 for the provision of health needs through Divisions of General Practice.
services to members of the community with mental Before the introduction of these services there had
illness (Better Access to Mental Health Care been a regional and rural initiative called More Allied
initiative, BAMHC) has had a measurable impact Health Services (MAHS) which funded general
on the practice of psychology in Australia. Before practitioners through their local Divisions of General
1999, most visits to private psychology practitioners Practice, to employ or contract allied health practi-
were fully funded by the user, with only a small tioners to provide a range of health services.
proportion of reimbursement through insurance or Psychology services were the most popular of the
other compensation schemes. Prior to 2006, the allied health services sought by general practice
public funding of access to private psychology (Department of Health and Ageing (DoHA),
services by members of the community was on a 2007). Both MAHS and BOMHC programs were
very limited basis under the Enhanced Primary Care not Medicare fee-for-service based.
initiative (EPC) or through the Divisions of General These earlier initiatives were, and are, limited.
Practice-directed initiative called Better Outcomes in EPC is constrained by the heavily capped number of
Mental Health Care (BOMHC). The EPC initiative sessions (five sessions per patient in total per year for
(now called Chronic Disease Management) was any allied health service) and the limited rebate
launched in 1999 to meet demand for the perceived provided. BOMHC is constrained by the small
growth in chronic disease by funding allied health number of general practitioners who completed the

Correspondence: Dr Brin Grenyer, School of Psychology, University of Wollongong, Wollongong, NSW 2522, Australia. E-mail: grenyer@uow.edu.au
ISSN 0005-0067 print/ISSN 1742-9544 online Ó The Australian Psychological Society Ltd
Published by Taylor & Francis
DOI: 10.1080/00050067.2010.501035
190 D. Stokes et al.

training that would enable them to refer for additional staff, including psychologists, within
psychological services under the scheme (Fletcher community mental health services (Goldberg, 2008).
et al., 2009) and for a limited number of sessions Similarly, in Australia there has been an increased
(6 þ 6). focus on general health conditions and in particular,
The MBS-funded rebates provided to commu- mental health. The substantial funding commitment
nity members for therapy services under the by the Australian Government to mental health and
BAMHC initiative are considerably more accessible chronic health services to the general population
and better funded but still for a capped number of through Medicare is a proactive approach to meeting
sessions and payment levels are still well below the community needs. With a high proportion of
Australian Psychological Society’s (APS) recom- psychologists in Australia working in private practice
mended fee for psychological service. Nevertheless, (Byrne & Davenport, 2005), the MBS initiatives led
they have led to a significant increase in access to to both an increased workload for psychologists and
psychological services for the public. Under this increased access to psychological services for mem-
initiative, any general practitioner can refer directly bers of the public.
to a psychologist or other allied health practitioner Medicare Australia reports that for the year
with experience and training in the provision of between July 2008 and June 2009, general practi-
mental health services. Up to 12 sessions per tioners created 605,225 Mental Health Treatment
calendar year are rebatable for clients meeting Plans which resulted in 901,188 sessions of treat-
eligibility requirements and under special circum- ment by clinical psychologists and 1,566,882 treat-
stances up to 18 sessions per year are available. ment sessions by registered psychologists (Medicare
The uptake and support for this initiative has been Australia, 2009). Additional data from Medicare
significant both in terms of community access Australia suggests that the volume of referrals to
(Medicare Australia, 2009) and patient outcomes psychologists accounts for about 19.2% of all allied
(Giese, Lindner, & Forsyth, 2008). In addition, health services under MBS (second behind phy-
there has been significant support for this initiative siotherapists) and constitutes 5.3% of all health
from health practitioners. service referrals.
The implementation of these funding initiatives to Investigations of both practitioners and clients of
increase access to allied health services can be seen to psychologists have shown considerable endorsement
be innovative when compared to healthcare schemes of both treatment success and the necessity of these
in different countries (McDonald, Harris, Cum- items to enable members of the community to
ming, Davies, & Burns, 2008). Across most western achieve access to psychological services (Fletcher
countries there has been movement away from the et al., 2009; Giese et al., 2008; Mathews & Forsyth,
provision of hospital-based mental health care 2009).
towards increasing community provision of services The BAMHC program created a two-tiered
and in particular the provision of mental health system that distinguished between services from
services within primary health care. In the United clinical psychologists and four other mental health
States, Government funded agencies such as Med- service providers: registered psychologists, social
icare and Medicaid provide services to individuals workers, general practitioners (with mental health
seen to be disadvantaged (e.g., those over 65, low training) and occupational therapists (with mental
income earners). However, access to psychological health training). Clinical Psychologists, defined by
services through these organisations even for the eligibility for membership of the Australian Psycho-
most disadvantaged is limited and there has been a logical Society (APS) College of Clinical Psycholo-
call for policy change to allow increased psychology gists, are considered to have specific expertise in
coverage in Medicare (Karlin & Humphreys, 2007). diagnosing and treating mental illness, generally
The model for more services however, continues to from the completion of a postgraduate degree. It
be through increasing private health insurance cover- rests with the general practitioner to identify the
age rather than direct government funding. clinical complexities and co-morbidities of a patient
Health systems across Europe vary considerably which would prompt a referral to a clinical psychol-
but generally, in most developed countries the role of ogist as opposed to a registered psychologist or one
the private sector is expanding (Muijen, 2008). In of the other three providers. Where the patient issues
many European countries services in mental health are not complex and chronic and the patient is seen
remain inadequate and inequitable when compared to be appropriate for a set of specified interventions
to the provision of other health services (WHO called Focussed Psychological Strategies2, the refer-
Europe, 2005). An exception is in the United ral could be to one of the other four mental health
Kingdom where mental health expenditure is greater service providers. The number of claims for services
than that in other European countries. In addition, to clients by psychologists for mental health treat-
recent changes have allowed increased funding for ment items compared to the other three professions
 Psychologists providing Medicare-funded services 191

shows that the large bulk of these services are practitioners (IPPs) as this was the only sector
provided by psychologists (Medicare Australia, (private practice being a necessary pre-requisite)
2009). who are eligible to provide services for clients funded
What is not provided in Government analyses of under Medicare. Those salaried psychologists with
these initiatives is specific data about the service MPNs who indicated that they provided some
providers themselves: where they are situated, the private practice services (e.g., as part of a second
nature of the services provided and their capacity to job) were retained in the study.
meet continuing community demand. This paper
extends on separate studies utilising the National
Materials
Psychology Workforce Survey data set that provides
a profile of Australian psychologists (Mathews, A survey instrument (The National Psychology
Stokes, Crea & Grenyer, 2010 – this issue; Stokes, Workforce Survey) was developed to gather informa-
Mathews, Grenyer & Crea, 2010 – this issue) by tion about registered psychologists in Australia. The
investigating characteristics of those psychologists survey instrument aimed to profile psychologists in
providing services under the MBS scheme. It is general including qualifications, registration, profes-
necessary for all providers who wish to offer services sional development activities, future work intentions,
under Medicare-funded programs to hold a Medi- work roles, client groups and work location. Re-
care Provider Number (MPN). The basic require- sponses to only a subset of the questions in the
ment for a provider number is state registration as a National Psychology Workforce survey were of
psychologist. As previously reported (Mathews interest in the current paper. Questions of interest
et al.), approximately a quarter of psychologists have addressed whether the psychologist had a MPN,
a second job and the majority of these second jobs whether they worked in private practice, psychologi-
are as independent private practitioners (IPPs). cal work issues such as client types and psychology
The paper utilises a set of data collected by a roles, involvement in the various Medicare initia-
national survey of the psychology workforce funded tives, income and location of practice.
by the NSW Psychologists Registration Board, under
the auspices of the Council of Psychologist Registra-
Procedure
tion Boards (CPRB) and facilitated by the APS.
Whereas Mathews et al. (2010 – this issue) profiles of The survey instrument was administered as an online
the whole psychology workforce and Stokes et al. survey. The distribution of surveys was facilitated by
(2010 – this issue) compared the characteristics of psychology registration boards across Australia.
independent practitioners and employed psycholo- Distribution to registrants was via a web-link in an
gists (psychologists in salaried employment), the email or personalised letter, or through information
current paper aims to investigate the characteristics provided on the board’s website or newsletter. The
of independent practising psychologists who may as APS also assisted by distributing reminder emails to
part of their work provide services under MBS. It is their members encouraging participation. A more
important to note here that this is not a study of detailed description of the methodology can be
practitioners who derive all their income from MBS found in Mathews, Stokes, Crea and Grenyer
items or other government-funded programs, but of (2010 – this issue). A Glossary of Terms was
practitioners who derive some income through the developed to guide participants through the survey
MBS scheme. Analyses of Medicare-funded psychol- and to reduce ambiguity in understanding key
ogy services are provided elsewhere (e.g., Fletcher concepts. Relevant terms from the Glossary are
et al., 2009). shown in Table 1.

Method
Results
Participants
Demographics
Participants were a subset of a larger cohort of
surveyed psychologists (n ¼ 8,086) who had com- Of the approximately 25,800 registered psychologists
pleted a range of questions about their demo- in Australia in 2008, 11,897 (46%) responded to the
graphics, qualifications, work roles, income and Australian Psychology Workforce Survey. Of this
work values. This subgroup had also indicated that group 8,086 identified themselves as fully registered
they held a Medicare Provider Number (MPN). and currently employed. The subset of that sample
Although some of the salaried sector of psychologists identified in this paper were those who held a MPN
also reported holding MPNs, the focus of the and were involved in IPP service provision in either a
analysis is on their roles as independent private main or second job. There were 3,587 participants
192 D. Stokes et al.

who met these criteria (44.36% of those registered and the largest proportion (24.6%) were members of
and employed). the College of Clinical Psychologists. The majority of
Of this sample, 73% (n ¼ 2619) were female and this group were psychologists in IPP in their main job
27% (n ¼ 968) were male and the mean age was 48 (n ¼ 2,171, 61%). Just over one third (1,314, 39%)
years (SD ¼ 11.4, range: 24–87 years). Fifty-five per were in salaried/employed positions for their main
cent of this group had postgraduate qualifications jobs (employed public sector, n ¼ 498; employed
and 41% held APS College membership. Some private sector, n ¼ 916; 14% and 25%, respectively)
participants were members of more than one College and therefore conducted Medicare-funded services
as part of a second job in private practice.
The percentage of time allocated to interventions
Table 1. Relevant terms included in the Glossary provided in the and services that could potentially be offered under
Australian Psychology Workforce Survey Medicare is displayed in Table 2. Participants
Psychology workforce The total number of persons employed reported spending a considerable amount of time
or employable as psychologists as in other roles and completing other professional
defined by State and Territory activities not captured by the MBS such as cognitive
Psychologists Registration Boards. assessment, health promotion, and personal devel-
Psychological service Any service provided by a psychologist to
a client including but not limited to,
opment/coaching. Table 2 reports these as ‘‘Non-
professional activities, psychological Medicare eligible services’’. Hence, the percentages
activities, professional practice, reported in Table 2 are proportions of the total hours
teaching, supervision, research, of work for participants. The client groups serviced
professional services, and by participants as part of their main or second job are
psychological procedures.
Private practice An income-generating service run by a
displayed in Table 3. The data reported here are
psychologist. based on hours worked per week.
Work setting The organisational context in which you
are employed as a psychologist (e.g.,
hospital, tertiary institution, private Access to services
practice).
Client services The provision of psychological services
The issue of access to, and location of, psychologists
for a client. has been well covered in Mathews et al. (2010 – this
Public sector In a workplace setting, the public sector issue) and centres on the concept of a distribution of
refers to an organisation or body services (psychologists) based on postcodes. An
which is largely Government funded, analysis for this sample with regard to Accessibility/
whether national, regional or local/
municipal.
Remoteness Index of Australia (ARIAþ), (Australian
Private sector In a workplace setting, the private sector Bureau of Statistics, ABS, 2001) as a measure of
refers to an organisation or body location (remoteness) is set out in Table 4. ARIAþ is
which is privately owned and not classification system of remoteness based on mea-
Government administered including sures of access to community infrastructure. It
Non-Government Organisations
(NGOs).
provides a score that reflects distance from resources
Medicare provider The number provided to a psychologist such as schools, hospitals and shopping centres. For
number once they have registered with a detailed discussion and explanation of ARIAþ see
Medicare Australia to provide Mathews et al.
psychological services under any The ARIAþ scores for psychologists in this sample
Medicare Australia initiative.
Fee for services The total amount in dollars a
were based on the location of their private practice
psychologist charges per hour. when identified as either their main or second job.
Many of the IPPs were found to practice in more

Table 2. Total number and percentage of hours participants reported spending in psychology roles/services to clients

Main job Main job 2nd job 2nd job

Psychology role (hours) (% of hours) (hours) (% of hours)

Counselling 30,814.80 26.93 4848.82 28.26

Mental Health Intervention 32,077.50 28.04 4950.86 28.86
Behavioural Assessment 4886 4.27 635.25 3.70
Drug/Alcohol/Addictions 3990.50 3.49 482.20 2.81
Physical health/rehabilitation 2896 2.53 313.20 1.83
Non-Medicare eligible services 39,753.20 34.74 5925.63 34.54
Total 114,418 100 17155.96 100
n 3511 1541
 Psychologists providing Medicare-funded services 193

Table 3. Total number and percentage of hours participants spent servicing different client groups in their independent private practice

Main job (hours) Main job (% of hours) 2nd job (hours) 2nd job (% of hours)

Age group (years)

Infants (0–2) 682.95 0.72 138.10 0.94
Pre-school (3–4) 1956.35 2.06 302.60 2.05
Children (5–12) 7583.30 7.99 1133.70 7.68
Adolescents (13–17) 9974.90 10.49 1490.47 10.09
Young adults (18–24) 16,009.90 16.84 2847.63 19.29
Adults (25–64) 53,751.80 56.55 8119.27 54.99
Older adults (65þ) 5094.20 5.36 734.22 4.97
Total 95,053.40 100 14765.99 100
n 3378 1447
Group type
Individuals 3360 45.08 10925.18 77.38
Families 1270 17.04 1065.90 7.55
Groups 654 8.77 640.25 4.53
Non-Medicare clients 2169 29.10 1487.15 10.53
Total 7453 100 14,118.48 100
n 3471 1446
Specific client groups
CALD 14,366.41 62 2162.12 58.75
ATSI 2623.67 11.32 359.87 9.78
Other 6183.10 26.68 1158.3 31.47
Total 23,173.18 100 3680.29 100
n 1870 615

Note: CALD ¼ Culturally and Linguistically Diverse; ATSI ¼ Aboriginal and Torres Strait Islander.

Table 4. Private practice locations* of participants, based on APS classification of ARIAþ

Category ARIAþ range Description IPP n (%)

1 0–0.10 Metropolitan and very major cities 2122 (69.14%)

2 40.10–0.25 Outer suburban and large regional cities 183 (5.96%)
3 40.25–2.40 Outlying suburban, regional areas & towns 524 (17.07%)
4 42.40–5.92 Outer regional 221 (7.20%)
5 45.92–15.00 Remote 19 (0.62%)
Total 3069 (100.00%)

*Participants could indicate more than one location of practice.

Table 5. Reported waiting periods for clients of participants was practising in a metropolitan location although
Independent private practice
those in IPP demonstrated considerable representa-
tion across areas.
n % The current study looked at the average time
period clients may be required to wait to access a
51 week 485 22.4
psychologist. Table 5 outlines the waiting list data for
1–2 weeks 959 44.3
2–4 weeks 456 21.1 the participant group. It is largely similar to the larger
4–6 weeks 145 6.7 group of psychologists in IPP as demonstrated in
6–8 weeks 62 2.9 Stokes et al. (2010 – this issue) with most partici-
48 weeks 56 2.6 pants being able to schedule a service within a 4-
Total 2163 100.0
week period.

Income
than one location often providing multiple post Table 6 examines the pattern of participant service
codes. This explains the discrepancy between the provision under Government-funded initiatives. The
number of locations and the number of practitioners. first column records the number of participants
As expected, the larger proportion of participants reporting use of each funding system and the second
194 D. Stokes et al.

column reports on the number of participants who participants working at least 35 hours indicated that
ranked the funding arrangement as the one most they earned between $75,000 and $99,999 per
used by their clients. Although many funding annum closely followed by the $60,000–$74,999
arrangements were endorsed by participants as being category. It should be noted that this is an overall
used by their clients, BAMHC has clearly been figure of the income of the practitioners studied,
accessed the most. Information about participation and therefore includes a combination of salaried
in the BOMHC initiative was collected even though employment, private insurance-funded services, pri-
this is not a Medicare initiative. The BOMHC vate out-of-pocket funded services, Medicare-funded
initiative is a longstanding program with consider- services, and other sources of income.
able support and it was of interest to see that it
continues to have support with 30% of participants
Discussion
reporting that they work within this program.
Table 7 reports the income of participants working This study set out to characterise a group of
more than 35 hours per week. Income reflects the psychology private practitioners who had completed
total income from all sources. The income is for a national workforce survey and had indicated that
main and second jobs combined where participants they have a Medicare provider number. Having this
provided this information (n ¼ 3,587). Reasons for provider number allows them to provide services
exclusion from income data are: did not provide under a range of Medicare-funded schemes. The
income data (n ¼ 228); did not provide hours worked mean age and gender mix of this participant sample
per week (n ¼ 62); and worked less than 35 hours was similar to that found among the broader group of
per week (n ¼ 1605). The largest proportion of independent private practitioners in the workforce
sector study (Stokes at al., 2010 – this issue). Of
particular interest is the high percentage of psychol-
Table 6. Profile of the funding schemes utilised in the practices of ogists (39%) whose main job is in the employed
participants sector and who also hold a MPN thereby making
Most used themselves eligible to provide Medicare-rebated
Funding arrangement n/(%) (n) services to the community in a private capacity.
Constituting approximately two-fifths of the partici-
Better Access to Mental Health Care 3376 (94.2) 2125 (59.2) pants, this is a significant proportion of the workforce
Better Outcomes in 1086 (30.3) 105 (2.9)
Mental Health Care/ATAPS who does, or potentially could, provide independent
Medicare Chronic Disease and 803 (22.4) 18 (0.5) private practice services in addition to their salaried
Enhanced Primary Care role. Survey questions did not address whether all
Pregnancy Support Counselling 148 (4.1) 0 (0) participant with a MPN actually provided services in
private practice. Anecdotal information suggests that
Note. Column 1 records frequencies and percentages for funding
a small group of psychologists with a MPN do not
source for clients of private practitioners. ‘‘Most used’’ column
records numbers of the highest ranked by practitioners. Data in currently provide private practice services, although
table excludes other funding sources such as private health they may choose to do so in the future.
insurance, private payments, contract and consultancy funding. The results also showed that a considerable
percentage of the participant group were members
of an APS College. The high representation of
college membership is likely to reflect the fact that
Table 7. Taxable income for participants working full-time (435 membership eligibility of the APS College of Clinical
hours/week) in independent private practice (income for main and Psychologists was needed to receive ‘‘clinical psy-
second jobs combined) chologist’’ classification under the MBS items.
n % Although the issue of access to psychologists has
been discussed in the other papers in this special
Under $40,000 187 9.8 section (Mathews et al., 2010; Grenyer, Mathews,
$40,000– $59,999 310 16.2 Stokes, & Crea, 2010; Stokes et al., 2010), it is
$60,000–$74,999 436 22.8
$75,000–$99,999 494 25.9
particularly relevant for psychologists with MPNs as
$100,000–$149,999 291 15.2 it has been of interest to government who regularly
$150,000–$199,999 50 2.6 review their health initiatives to ensure availability of
$200,000þ 43 2.3 services to a broad sector of the public. There has
Prefer not to answer 99 5.2 been ongoing concern expressed about whether there
Total 1910 100
is a sufficient number of psychologists to meet
Note. Data combines all income funding sources, including salary, the demand in the community for access to
private insurance, Medicare, private payments, consultancy and services, particularly in rural areas (Dunbar, Hickie,
contract fees. Wakerman, & Reddy, 2007). This study indicates
 Psychologists providing Medicare-funded services 195

that a considerable proportion of psychologists There are several limitations to this study. The first
providing Medicare services are located in non- of these is the use of waiting time as a measure of
metropolitan locations. Utilising a conservative score accessibility. Clearly, a more objective and accurate
(0–0.25) on the ARIAþ for classification of ‘‘me- measure than self-report is needed. The proposed
tropolitan’’ places, 25% of participants were outside investigation of this initiative by the government may
of metropolitan areas. In addition, psychologists who provide a clearer set of data on waiting periods.
hold MPNs but whose main job is in the employed Further, the impact that fees for service provision
sector may not yet be providing an IPP service to may have on access was not investigated in this study
their community but may potentially do so, making and should be considered in evaluation of these
them a prospective source of psychologists eligible to programs.
provide Medicare-funded services to the public. The data indicate that many practitioners have
Further investigation should seek to determine how made the new Medicare initiatives a substantial part
many psychologists with MPNs are not currently of their practice, particularly participation in the
offering private practice services, or if offering private Better Access program. In other words, psychologists
practice services, are not currently offering any have responded to the demand for private psycholo-
services under the Medicare initiatives. In addition, gical services that have been generated by general
there needs to be consideration of what enablers practitioners being able to refer their patients to
could be put in place to promote uptake of these Medicare-funded and therefore affordable psycholo-
services by this group in order to benefit the gical services. The data reported here confirms a
community. substantial workforce of psychologists offering Med-
Those currently working in IPP were found to be icare-funded services distributed across metropolitan
particularly well represented in outer metropolitan and non-metropolitan locations and servicing a
regions with 25% of these psychologists reportedly diverse group of the community.
providing services in regional and rural locations.
This proportion compares favourably to ABS popu-
lation statistics for those living outside of the
Notes
metropolitan region (approximately 35%; ABS,
2006). However, it is acknowledged that this is a 1 Medicare Benefit Schedule identifies those services and the fee
cumulative figure and will not reflect the variation in for which the Government provides a rebate to a service
recipient.
access across localities. 2 A range of interventions deemed by the Australian Government
The other factor that impacts on access documen- Department of Health and Ageing to be evidence-based have
ted in this paper is that of waiting lists. The findings been identified as Focussed Psychological Strategies. Further
indicate that the vast majority of psychologists in the information on the MBS initiative can be found at www.health.
current study have openings for referrals within a gov.au
period of a few days to 4 weeks. While these figures
are based on self-report and hence this is a limited
measure of access, it does indicate continuing References
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