Wonky Health asks: will deregulation of higher education be a nightmare for the health sector?

As suggested in the tweet below by AMA vice president Dr Stephen Parnis, there are widespread concerns about how the Federal Government’s proposed deregulation of higher education wil

Melissa Sweet — Health journalist and <a href=Croakey co-ordinator" class="author__portrait">

Melissa Sweet

Health journalist and Croakey co-ordinator

As suggested in the tweet below by AMA vice president Dr Stephen Parnis, there are widespread concerns about how the Federal Government’s proposed deregulation of higher education will affect the health system.

Parnis was scheduled to present in Canberra this morning to a Senate Education and Employment Legislation Committee inquiry into the proposed reforms.  Public hearings are also scheduled for Melbourne tomorrow.

Meanwhile, in his latest Wonky Health column, Dr Tim Senior says that making university education more expensive will have wide-ranging implications for our health. Indeed, he suggests, it will be something of a nightmare.

Dr Tim Senior writes:

I have a recurring dream. I dream that I am back at my interview to get in to medical school.

“Why do you want to be a doctor?” I am asked. My eyes moisten, and I give the answer thousands like me are giving across the country. “Because I want to help people,” I say.

Then, from behind the desk, up pops Christopher Pyne. “Help people?” he screeches at me. “Help people?

“The only reason for getting a degree is to line your own pockets. I cannot conceive of any other reason for wanting a degree. You want to make money! I am not going to support you to make a packet off the back of hard working people like Gina Rinehart.”

I always wake in a cold sweat, before I realise that this is a dream, with no basis in reality.


Christpher Pyne, the Education Minister, clearly wants a higher education sector that is high quality, saying “If we don’t act, and act now, we risk (the) system falling into a downward spiral towards mediocrity.”

This will be achieved, he tells us by “set[ting] our higher education providers free.” So what are the changes that will achieve this?

  • HECS-style loans expanded to higher education courses other than degrees, and to institutions other than public universities
  • Increasing the interest rate on HECS-HELP loans
  • Deregulating the fees charged by Universities.
  • Reducing the contribution of government to Universities tuition fees by 20%

For a policy that is supposedly focussed on quality, it seems very well disguised as a policy focussed on costs.

The argument goes that those with a University degree are more likely to be employed and earn more than those without so they can afford to pay more. (There’s a really good ABC Fact Check on the different ways of calculating the pay difference of graduates and non-graduates. It’s broadly true, and some measures agree with Christopher Pyne’s statements.)

But taking on this debate assumes that the only person to benefit from someone’s degree is the graduate herself. Every time you drive over a bridge without it collapsing under you, every time a child is taught in a school, every time you successfully send a text message, speak to someone by phone, or even watch The X Factor, you are benefiting from a string of university graduates who made that possible for you.

I suspect there is a very strong argument to be made that nurses (and teachers) benefit society a great deal more than they get in salary. Many of those working in the health services are graduates, including nurses, physiotherapists, speech and language therapists, occupational therapists, pharmacists and, of course, doctors. Also many of the managers, public health practitioners and health policy experts are graduates.

In claiming that those without degrees don’t want to subsidise those who get them, we are also claiming that those without degrees don’t want there to be trained health professionals available when they need them. I don’t see anyone making this point.

Would making degrees more expensive, both as a result of universities charging more and students being asked to contribute more, have an effect on our future health workforce?

I’m going to follow the old rule of “write what you know” for a moment, and follow this train of thought for medical degrees, just because that’s the one I’ve got, and that’s where most of the evidence is, as far as I can tell. (Please do write in the comments if you have views on the effect of this policy in other health professions, too. There’s some excellent information here on the likely cost increases of different degrees, including health related degrees).

Medicine is one of the most expensive courses, partly because it takes anything from between 5 and 7 years to get the basic qualification. It does result in higher income than many other professions, too.

In 2010, Melbourne University created some controversy with a Medical Degree which bypassed the government’s ban on charging full fees with a 4 year graduate entry MD program costing $204,000 in total. Bond University charges $331,280 for its Bachelor of Medicine, Bachelor of surgery program if you enter next year. If you plug in medicine into the website (run by Greens Senator Lee Rhiannon) then it claims a total cost of $355,548, taking more than 50 years to pay off.

There are two crucial decision points potentially affected by these costs. The first is what specialty junior doctors choose; and the second is whether to enter medicine at all.

In theory, having high levels of debt should lead medical graduates to choose medical specialities that will earn them more so they can pay off their debt more quickly.

The best evidence on the earnings of different medical specialities comes from the MABEL (Medicine in Australia: Balancing Employment and Life) survey. Their report showed that overall, GPs earned 32% less than specialists. This might be important, because, as Barbara Starfield showed, employing more primary care physicians decreases mortality, whereas employing more specialists is associated with increased mortality.

Could it be that the suggested university funding policy will worsen population health? (People might be interested in subsidising population health, if so.)

The evidence is a bit mixed, but it looks like future earnings do influence career choice, and that those with higher debt are influenced more, and are more likely to choose based on earning potential. (We are already seeing this, with the number of GPs being static, while the number of specialists is rising.)

The MABEL survey also broke down different work and geographical factors and how they related to pay. GPs in regional and rural areas earned more than other GPs, so, conceivably, the policy may be good for these areas (though that would be a very broad brush to solve a workforce problem).

However, it would be most likely make recruitment of GPs into Aboriginal and Torres Strait Islander Health, which we keep telling ourselves is a priority, much harder. Areas such as the outskirts of Sydney would also struggle to recruit much needed GPs.

It’s also possible that high debt would make doctors increase their fees, resulting in a more expensive health system.

Would high fees and the prospect of high debt put people off applying to do medicine?

The evidence here is less clear, I suspect because it’s easier to survey those who already got in. One large study in the UK showed that debt does not affect the choice to go to university, except for those in lower socioeconomic classes.

In other words, higher student debt will restrict entry to health careers, especially medicine, to richer families even more than it does already. Given the well known relationship between poor health and low income, this will put further distance and between doctors and many patients resulting in misunderstandings.

The particular needs of Aboriginal and Torres Strait Islander people becoming doctors (and other graduate health professionals) warrant a special mention. It’s generally agreed that we need to increase the numbers of Aboriginal and Torres Strait Islander people in the health workforce, and the Australian Indigenous Doctors’ Association has done great work on this in medicine.

With many Indigenous doctors going in to medicine later in life, and having significant family and cultural obligations on them after graduating, the likely debt will put many off (Note from Croakey – see recent comments by AIDA president Dr Tammy Kimpton raising similar concerns).

Making medical degrees particularly expensive may well stimulate other policy options in the future, such as increasing GP income relative to specialist income, relying more on less expensive non-doctor workforce for many tasks, shortening medical training, or financial incentives for working in particular areas or fields. There are no major proposals for doing any of these things, though (with the possible exception of increasing the amount done by non-medical workforce) and there’s not much evidence for any of these.

So it seems entirely plausible that the proposed university funding policy will have the effect of confining medicine to a well-off section of the community, encouraging people to work in high paying specialist fields, reducing the number of people working in low-paid “priority” areas.

Perhaps it may ultimately even increase early deaths for Australians. We can only hope that it all turns out to be just a bad dream.

• Tim Senior and Croakey thank and acknowledge all those who contributed to the crowd-funding campaign to support Wonky Health – more details here. 

All Wonky Health columns are compiled at this link. The previous column investigated changes to GP training.




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