Dr Kerryn Phelps, AMA President, to the Country Mayors Association of NSW, Sydney

Gripped by drought, living in constant fear of bushfires, stricken with uncertainty - like the rest of the world - by terrorists acts and threats, and battling with the perennial problems of lost services and poor mobile phone reception, and on it goes.

Country Australians have the enviable quality of confronting challenges, beating them, and moving on to the next one. Life goes on.

The resilience and eternal optimism, good humour and mateship of country Australia is the image we believe to be the true Aussie character.

But still the challenges keep coming.

Later this morning you'll hear from the NSW Police about law and order.

And soon-to-retire Minister for Local Government, Harry Woods, will talk in broader terms about the issues facing the people of regional New South Wales - the people you represent.

I want to talk to you about yet another challenge facing regional Australia - the availability of quality affordable medical services, now and into the future.

You know, equal access to the best possible doctors and nurses and hospitals and medicines and treatments- wherever you live in Australia.

Like water, doctors are fast becoming a rare but valuable commodity in country towns and communities - no more so than in regional New South Wales.

It's not fair, I know, but it's happening.

A combination of factors is conspiring to rob country people of their doctors and other health professionals and services.

Medical indemnity, a neglected Medicare, inadequate doctor training numbers, the bureaucratisation of medicine, long and unsafe working hours, and the age-old problem - getting worse - of recruiting and retaining doctors in rural and remote communities.

Another soon-to-retire fellow, Allan Fels, has also done his bit to make it harder for doctors to work in regional Australia.

The draconian application of the Trade Practices Act has made it difficult for doctors in the country to cooperate on rosters or negotiations with hospitals to allow them to provide seamless medical services 24-hours-day, seven-days-a-week. Bureaucracy gone mad.

You have seen it all and you have seen how all these factors are not good for your communities.

The Australian Bureau of Statistics found that rural and remote GPs work at least 11 hours a week above the national average.

The average age of procedural GPs - the typical country family doctor -is between 45 and 50, and 34 per cent of country GPs are over 50.

The GPs in your towns are probably male, nearing retirement age, and are having trouble getting young doctors to move in to take their places.

Otherwise, they are overseas-trained doctors who are there to fill gaps for a short time - although some, thankfully, are there for the long haul.

So you have an overworked late middle-aged bloke who has been part of the community for ages or you have a qualified foreign doctor who in most cases is in town for the short term.

Meanwhile, the people in your towns, like all people, get sick or have accidents or want advice or seek counselling, but getting in to see the doctor is not as easy as it sounds.

In many cases people have a long wait or they may even have to go to another town.

The tradition of the local doctor - the family doctor - is disappearing. Another community icon bites the dust.

We have to reverse this trend.

I think the medical professional and community leaders - you, the mayors - can make a pretty handy and effective lobbying force, if we work together.

Action from governments - all governments - is needed…and soon.

So, what do we have to do?

The first thing we have had to do is get the Government to admit that there is a shortage of doctors, especially in regional Australia.

I'm pleased to say that I think this message is finally getting through.

Up until recently, the Government has stubbornly held the line that there is no shortage of doctors, simply a maldistribution of doctors.

All they had to do was to provide enough incentives to doctors working in the cities and stand back for the stampede of doctors to rural and regional areas. So they thought…

Solid AMA research from earlier this year - prepared by Access Economics - indicated a shortfall of somewhere between 1200 and 2000 GPs nationally, with at least 700 more needed in country areas. But the shortages are not confined to rural and regional areas.

Based on what we are hearing from local communities, these estimates may well be on the conservative side.

The problem is, however, that you cannot train and deploy a medical workforce overnight. It takes time. And money. And good policy. None of which we have at the moment.

Here are some of the structural and policy problems.

Australian medical schools are not graduating enough doctors to fill all of the available training places. There are not enough post-graduate training places to meet demand.

The Australian Medical Workforce Advisory Committee notes that a number of specialist colleges will not fill their training places this year.

Overall training intake requirements in 2003 are estimated at 1489 compared with around 1200 medical school completions.

The GP workforce shortage is greatly exacerbated by the restriction on the number of training places to some 450 per year and by the declining participation rate by GPs as a consequence of a relative fall in remuneration, increased stress and worsening general working conditions.

What this means is that poor planning will lead to even greater doctor shortages in five or ten years if policy isn't changed now.

As mentioned, the shortfall has been partially covered by a major increase in the recruitment of overseas trained and temporary resident doctors.

At 30 June 2002 there were an estimated 2899 temporary resident overseas-trained doctors working in Australia.

This number is about 7% of the total medical workforce and has increased by 70% in the last five years.

But this is an unsustainable policy because all developed countries are experiencing similar shortages and are competing for doctors from the same developing countries.

Poorer countries are losing their already inadequate precious medical resources.

There is a case for streamlining the procedures for appointing doctors to "Area Of Need" (state) and "Workforce Shortage" (Commonwealth) programs, which need to be as simple and as flexible as possible.

There are other factors exacerbating the shortage of GPs.

First and foremost is the pressure on GPs to bulk bill.

Until recently, over 80% of GP services were bulk billed.

GPs in medium to low income areas bulk billed all their patients and most other GPs bulk billed pensioners, healthcare cardholders and other disadvantaged groups.

There was a time when bulk billing was considered administratively convenient and it avoided any conflict with patients over fees.

That was when there was some correlation between the Medicare patient rebate and the cost of providing the service. Those days are long gone.

The decline in the value of the Medicare Benefits Schedule (MBS) has forced many GPs to realise that the Medicare rebate is not an adequate return for a standard consultation. Yet many GPs still try to provide a service for the Medicare fee, especially if they are in an area with high numbers of unemployed people, elderly or pensioners.

To give you an idea, the Medicare patient rebate for a standard GP consultation up to 20 minutes is currently $25.05. When you factor in paperwork and other non face-to-face activity, a GP may see three patients an hour.

When you take out staff and equipment costs, superannuation, child care, electricity, rent, insurance and all the rest, that's not much of an income for a professional who has studied and trained for more than ten years.

As a consequence, bulk billing has declined to around 70% overall. Anecdotal evidence is that it is lower than that and is going to get a lot lower…and fast.

It is as low as 36% in the electorate of Murray (around Shepparton, Victoria) and 41% in Eden-Monaro (southeast NSW).

It has remained high in some of the lower income inner city electorates such as Blaxland (around Bankstown) at 98.5 % and the neighbouring electorate of Reid (around Granville) at 98.2% but I think that is only temporary.

The Government has rejected trying to directly address the issue of declining bulk billing through increased rebates reflecting the costs of running a practice.

The Government is trying instead to overcome workforce shortages by agreeing to more overseas-trained doctors, providing subsidies to rural GPs and funding a range of mostly short term measures to get trainee doctors and others into areas of workforce shortage.

There is little evidence that these subsidy schemes are coming close to adequately addressing the problem, because they are still based on the flawed assumption that there are plenty of doctors but they are in all the wrong places.

The other issue is that remuneration is a fair way down the list of reasons doctors decide to stay in rural areas. Other lifestyle issues such as employment opportunities for spouse and educational opportunities for children are very prominent concerns.

Worse, there is little or no thought being put into long term solutions - doctors for the next generation of Australians.

The medical workforce burns out while our politicians fiddle at the edges.

GPs work 53 hours per week on average, not including on-call.

Female GPs (who form an increasing proportion of the workforce) and younger GPs are quite sensibly not prepared to commit to a working life of 50 to 60 or more hours a week.

Analysis of extensive survey data by Access Economics shows a clear relationship between working hours and remuneration.

At the present time, economic pressures are clearly influencing GPs to seek alternative medical or non-medical careers.

As you are all too painfully aware, many people in regional Australia are not getting the primary health care that they need and deserve.

The rural GP shortage is a long standing and intransigent problem.

While many country GPs say they love their work, they are growing increasingly disillusioned and disenfranchised as a result of workforce conditions, and a significant number are voting with their feet.

They are moving on or moving out of medicine, or blending consultation time with other pursuits.

And it's not just the workforce that is being eroded.

Technological and support facilities have been reduced meaning that many small country hospitals have closed, greatly decreasing practice opportunities for both specialists and general practitioners.

Consequently, appropriate treatment choices for patients are even more limited.

For country GPs, issues such as spouse's career, children's schooling options (particularly later years schooling), long hours with lack of relief and lack of specialist support, isolation and indemnity issues are perhaps as significant as remuneration issues or even more so.

All these factors increase with remoteness, although large rural centres are seen by many GPs as having the best of both worlds - most of the advantages of urban areas with few of the disadvantages of remote areas.

The AMA has offered to work with the Government to produce a White Paper dealing with GP workforce and financing issues.

Such a Paper would require considerable input from regional communities - your towns.

The AMA has submitted ideas to Government to kickstart this process.

Any mandatory or non-mandatory pressure on GPs to bulk bill - as floated in the media this week - must be avoided. They would only cause a stampede of doctors out of the workforce.

The short-term policies that we are seeking are designed to increase participation and retention, and to reduce rates of retirement through the following measures:

Provision of direct subsidies including professional support and family support for rural and outer urban GPs.

Retention payments for doctors approaching retirement: About 30% of the current GP workforce are over 55 years of age.

These doctors tend to work longer hours and, if they are lost to the workforce in the next few years, this will significantly worsen the situation particularly in rural and outer urban areas.

A major reduction in red tape in order to maximise patient time and to reduce the disincentives of high levels of administrative work for GPs.

Re-skilling programs for doctors to re-enter the GP workforce.

Programs of sabbatical leave for doctors spending significant periods of time in rural areas so that they may have the opportunity to gain additional skills; for example, in obstetrics or anaesthetics.

Support for a rural/urban GP practice partnership program in which a rural practice partners with an urban practice in order to share skills and resources.

For example, an urban doctor may spend some time gaining experience in a rural practice while, at the same time, providing 'locum' relief for the rural doctor.

A support program run through the RACGP for professional, clinical, educational and personal support for GPs.

Support for general practices through the provision of practice nurses including support for population/preventative care schemes implemented by practice nurses under GP supervision.

Support to establish computer systems will also assist in reducing isolation and providing valuable resources to underpin clinical decision making and educational programs.

The AMA is calling for an increase GP training places from the current 450 - estimated to be just 420 this year - to at least 600 per year.

In the longer term, Australia needs at least 300 more medical graduates per year but this must be done on a basis of evidence of current and future needs.

The number of medical school places, particularly rural medical school places, also needs to increase significantly.

The AMA also recognises that rural school students should be given every opportunity to enter the medical profession.

Early exposure of school students to rural medical practice is critical in engendering enthusiasm to pursue a medical career.

This should then be supported through rural origin scholarship schemes and university enrolment practices that increase the number of rural medical students to reflect the proportion of rural people in the Australian population.

Early and continued exposure for medical students to rural practice is another important factor in providing new graduates with the confidence to take on rural practice.

I strongly caution against any suggestion to limit provider numbers to geographical areas. That would be the fastest way to destroy medicine in this country. It happened to teaching in the 1970s when graduates were forced to work only where they were told, and the teaching profession has never recovered.

Academically gifted students would simply turn their backs on medicine as a career if they felt they would not be able to live and work where they chose.

We have to start seeing practical grassroots solutions to grassroots problems.

In an ideal world, the kids from country towns would go off to study medicine or law or teaching and come back to the same towns to start a family of their own as the local doctor or lawyer or teacher.

But it doesn't happen that way. Not that anything is being done to help it happen that way.

I note that some towns have gone to great lengths to attract and keep doctors.

They have offered housing and educational opportunities for the kids and so on.

This is admirable and works in some cases by overcoming lifestyle barriers blocking some doctors from moving west in New South Wales.

However, the onus should not be on the local communities to do all the grunt work.

The tough decisions - the right decisions - have to be made at the very top. In Canberra. In Sydney.

The AMA and others such as the mayors of the towns continue to make the case for change.

It should not have to be a process of change through conflict or confrontation.

We need to see some collaboration, some teamwork, people working together. After all, that's what Australians are good at.

We need policies and planning to ensure that all Australians no matter where they live, rich or poor, continue to have affordable and equal access to the best possible health services.

We can't have a two-tiered health system - one for the haves and one for the have-nots. Or one for the city and one for the country. That's just not fair.

We've got to start now to fix the inequities and the injustices to build a better system not just for our towns and suburbs today, but for our kids and their kids.

Thank you. I'm happy now to hear your stories and answer your questions.