Australia and New Zealand Health

Policy BioMed Central

Research Open Access

Issues facing the future health care workforce: the importance of
demand modelling
Leonie Segal* and Tom Bolton

Address: Health Economics and Policy Group, Division of Health Sciences, University of South Australia, Adelaide, South Australia, Australia
Email: Leonie Segal* - Leonie.Segal@unisa.edu.au; Tom Bolton - Leonie.Segal@unisa.edu.au
* Corresponding author

Published: 7 May 2009 Received: 9 May 2008

Accepted: 7 May 2009
Australia and New Zealand Health Policy 2009, 6:12 doi:10.1186/1743-8462-6-12
This article is available from: http://www.anzhealthpolicy.com/content/6/1/12
© 2009 Segal and Bolton; licensee BioMed Central Ltd.
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/2.0),
which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract
This article examines issues facing the future health care workforce in Australia in light of factors
such as population ageing. It has been argued that population ageing in Australia is affecting the
supply of health care professionals as the health workforce ages and at the same time increasing
the demand for health care services and the health care workforce.
However, the picture is not that simple. The health workforce market in Australia is influenced by
a wide range of factors; on the demand side by increasing levels of income and wealth, emergence
of new technologies, changing disease profiles, changing public health priorities and a focus on the
prevention of chronic disease. While a strong correlation is observed between age and use of
health care services (and thus health care workforce), this is mediated through illness, as typified
by the consistent finding of higher health care costs in the months preceding death.
On the supply side, the health workforce is highly influenced by policy drivers; both national policies
(eg funded education and training places) and local policies (eg work place-based retention policies).
Population ageing and ageing of the health workforce is not a dominant influence. In recent years,
the Australian health care workforce has grown in excess of overall workforce growth, despite an
ageing health workforce. We also note that current levels of workforce supply compare favourably
with many OECD countries. The future of the health workforce will be shaped by a number of
complex interacting factors.
Market failure, a key feature of the market for health care services which is also observed in the
health care labour market – means that imbalances between demand and supply can develop and
persist, and suggests a role for health workforce planning to improve efficiency in the health
services sector. Current approaches to health workforce planning, especially on the demand side,
tend to be highly simplistic. These include historical allocation methods, such as the personnel-to-
population ratios which are essentially circular in their rationale rather than evidence-based. This
article highlights the importance of evidence-based demand modelling for those seeking to plan for
the future Australian health care workforce. A model based on population health status and best
practice protocols for health care is briefly outlined.

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Background Influences on the health workforce supply

The challenges facing Australia's health workforce have The health care workforce incorporates a range of voca-
been the subject of recent intense public interest, with per- tions operating in different industry settings; medical
ceptions of widespread and increasing workforce short- practitioners, nurses, allied health professionals (physio-
ages that could impact upon patient care [1-4]. This therapists, dieticians, occupational therapists, optome-
mirrors concerns about health workforce shortages inter- trists, clinical psychologists, social workers, indigenous
nationally, for example as expressed by the World Health health workers etc.) and other occupations, working in
Organization – although for WHO critical shortages are hospitals and other institutional settings (eg residential
particularly identified with sub-Saharan Africa and Asia care facilities) and community settings including private
[5]. practice, community health services and non-health set-
tings (such as schools and workplaces). There are over
Perceptions of health workforce shortages are driven in 450,000 paid health professionals in Australia, of whom
part by concern by policy-makers of the impact of 'popu- over 50% are nurses, 12% medical practitioners and 9%
lation ageing' upon the supply of and demand for health allied health professionals [5,15,16].
professionals [6,7]. A major demographic shift towards an
older population has been occurring in the Australian As noted the ageing of the population and the associated
population over several decades (the product of increas- ageing of the health workforce as illustrated, for example,
ing life expectancy, lower birth rates and the ageing post- in Figure 1[17-20] for the Australian nursing workforce is
war baby boom generation). As this shift has been occur- postulated to be precipitating a crisis in heath workforce
ring, government inquiries have sought to understand supply.
how the change in the population age structure might
impact on the capacity of the health workforce to deliver Commentators have cited the increasing proportion of
needed services. health care workers reaching retirement age, the tradition-
ally lower per-person hours worked with increasing age
The Productivity Commission in its 2005 report on Aus- combined with feminisation of the medical workforce
tralia's health workforce, details shortages in the health also associated with lower average hours per worker – as
workforce "in general practice, various medical specialty undermining workforce supply [6]. Exacerbated by
areas, dentistry, nursing and some key allied health areas." increasing pressures in the work place, especially in public
[6]. It suggested shortfalls of 800 to 1300 GPs in 2002 hospitals, that result in high rates of staff turnover and
(~5% of the GP workforce), and an anticipated shortfall of departures from the industry [21,22].
10–12,000 nurses (~5% of the nursing workforce) in
2006 and 12–13,000 in 2010; citing the 2004 Australian The major focus of the debate has been the ageing of the
Health Workforce Advisory Committee (AHWAC) 2003– workforce and what is seen as an inevitable decline in
2004 annual report, [8] (This was in turn based on numbers. However, drawing conclusions from cross-sec-
research by Access Economics (2004) [9], Preston [10], tional data ignores the many contrary influences affecting
Shah and Burke [11] and Karmel and Li [12].) Other com- health workforce supply. Participation rates at older ages
mentators have voiced similar concerns about existing and mean hours of work are increasing, especially
and impending health workforce shortages [13]. How- amongst women. This is in part a direct response to pol-
ever, the basis for these observations and predictions are icy, such as changes in superannuation rules and other
highly simplistic models that fail to adjust for any of the regulatory changes specifically designed to delay retire-
complex influences on the demand for and supply of ment[23]. More generally, female participation rates in
health workers, as described below. They thus fail to pro- Australia are increasing across all age groups, related to
vide a sound basis for health workforce planning, which delayed child rearing, smaller family size, policy changes
requires a sophisticated understanding of the main drivers in childcare and changes in community attitudes. This has
of demand and supply. A factor recognised in the recent seen female participation rates increase from 42.3% in Jan
establishment of a National Health Workforce Taskforce 1979 to 58.4% in March 2008 [23,24]. Projections under-
through AHMAC (Australian Health Minister's Advisory taken by Evans & Keeley [25] suggested a dramatic
Council) to take on a health workforce planning role [14] increase in participation rates for older married women in
recognises the complexity of this task and the inadequacy the next two decades; for married women over 55 with
of current approaches to health workforce planning. children post-school age from 59% in 2002 to 89% by
2022. This is highly significant given the largely female
In this paper we discuss some of the key drivers of health health professional workforce. Healy [26] also argues that
workforce demand and health workforce supply and con- an older workforce may also have greater levels of skills
clude with a brief discussion of alternative approaches to and experience and potentially greater efficiency.
modelling health workforce demand.

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Figure
The age 1structure of the Australian nursing workforce 1995, 2001, 2005 Source: AIHW [17-20]
The age structure of the Australian nursing workforce 1995, 2001, 2005 Source: AIHW [17-20].

The supply and mix of health professionals through new workforce in the UK has demonstrated the potential effec-
entrants, training, changing roles and retention of staff tiveness of policy levers. There is no reason to assume a
has shown considerable responsiveness to direct policy similar range of policies would not be effective in Aus-
initiatives as well as the indirect drivers of changing tech- tralia, especially given the strong competition for places in
nology and service demands. This is seen in a constantly clinical schools [31]. The capacity for Australia's health
changing health workforce mix, a process detailed by workforce to expand, despite an ageing workforce is evi-
Duckett [4]. Recent innovative changes to traditional dent from a simple analysis of the available data. Census
health workforce roles in Australia (such as the expanding figures show a growth in the health workforce in Australia
role of the practice nurse and nurse practitioner and the of over 3% per annum, significantly faster than the rate of
development of new para-professional roles) will allow population growth of 1.2% to 1.5% per annum 2000–
an even greater responsiveness to future health workforce 2008) [32]. The AIHW [33] concurred reporting a 26%
supply challenges[27]. The recent focus on chronic dis- increase in the number of people employed in health
ease prevention through the Australian Better Health Ini- occupations between 2000 and 2005, compared with an
tiative is seeing considerable discussion about new allied 18.04% rise in the workforce overall [24].
health roles, such as 'lifestyle coaches'; and the develop-
ment of new courses to train for these community-based Health workplaces in Australia are responding to current
illness prevention roles [28,29]. and projected health workforce and other capacity prob-
lems with a range of reforms. Several successful initiatives
The United Kingdom, for example, has increased the size are described in the Supplement to the MJA, [34]. Papers
of the health care workforce in a short time period, with identify productivity gain and reduced workforce turnover
an appropriately targeted policy mix; including new fund- through redesign of work processes. An example reported
ing for additional consultants, GPs, and nurses within the is Flinders Medical Centre in Adelaide, which employed a
NHS, an increase in medical school places and hospital- 'lean thinking' approach to reorganise care. Key principles
based reforms to improve the work environment [30]. were involvement of 'shop floor staff', a patient focus and
These initiatives have seen in the UK National Health detailed understanding of current work activities. Authors
Service a growth in the number of GPs by 20.1%, of qual- report an increase in productivity, eg 40% increase in ED
ified nurses by 26.8% and of allied health professionals by throughput, over 70% reduction in serious adverse events
35.7% in the period 1997 to 2005 [30]. The health care

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and stabilisation of staffing "within the ED and across background papers to the Australian 2020 summit also
nursing services throughout the hospital" [35] presumes a dominant influence of an ageing population
on demand for health care (and thus the health care work-
Another policy lever has been to use a range of initiatives force) [38].
to supplement the Australian health workforce with over-
seas trained doctors and nurses. The Australian Health However the evidence suggests that the role of ageing is
Workforce Advisory Committee (AMWAC), estimated highly uncertain, as the observed relationship between
overseas trained doctors made up 25% of the Australian age and health care use and thus health workforce require-
medical workforce in 2005, up from an estimated 19% in ment is entirely mediated through illness. It simply is not
1995; (Productivity Commission [6]). The AIHW 2005 correct to use cross-sectional data of health care costs by
medical labour force survey (covering all states except age, for projecting health care use and health care work-
NSW and NT) also reports 78.0% of the health workforce force demand. End-of-life events are consistently found to
trained in Australia, but with considerable variation make a major contribution to health care costs, which,
across the country, (65.5.% WA). Overseas recruitment correlated with increasing age does not mean ageing is an
has been designed primarily to address regional maldistri- independent determinant of health care costs. Calver, Bul-
bution and a past failure to increase training places for sara and Boldy [39] in their study of hospital costs relating
health professionals. High competition from local stu- to end of life events in Western Australia concluded that
dents for training places suggests that a shift towards a "Older decedents were not more likely to be hospitalised
higher local share is feasible, if resourced. than younger decedents in the final three years of life.
Moreover, once hospitalised, their in-patient costs were
The evidence concerning health workforce supply suggests lower." They cited a number of studies that reach a similar
a picture of a health workforce growing, despite an ageing conclusion, including Gray [40] who reported that "the
population and ageing workforce, and one that is highly relationship between age and health expenditure was
responsive to policy levers. The challenge is to ensure the weak and possibly inverse once proximity to death was
policy levers are driven by a sound understanding of allowed for."
health workforce demand. Establishing the desirable level
and mix of the health workforce, which reflects the opti- As noted by Calver and colleagues "Failure to account for
mal mix of health services, needs to be a focus of health proximity to death will overemphasise the impact of pop-
workforce research. Health workforce supply strategies ulation ageing on health care expenditure, because older
can then be devised to meet underlying need. people have a higher probability of dying." International
studies to develop risk adjusters for insurance premiums,
Health workforce demand also find that ageing as an independent variable accounts
Rarely is a clear distinction made between 'expressed' for less than 3% of variation in health care costs [41]. Risk
health workforce demand and underlying need. Expressed adjustment models are increasingly incorporating health
workforce demand is essentially defined by funded places status as the primary drivers. Breyer and Felder [42] also
(essentially current supply plus unfilled positions), while warned against simply undertaking a cross-sectional anal-
the concept of underlying need refers to the health work- ysis of hospital admission rates by age and applying this
force (size and mix) that will meet societal health sector to future population projections, arguing that time before
objectives (including equity) in an efficient manner. In death is a better predictor. (See also Coory (p.581)[43].
the context of market failure as typifies the health sector
and the health labour market[36,37], concepts of Annual death data show that in contrast to (or in part
expressed demand and underlying need are likely to because of) the ageing of the population (people are stay-
depart. In a health workforce planning exercise, it is the ing alive longer) the annual number of deaths in Australia
underlying health workforce need, which in turn reflects is increasing at only a modest rate. The number of deaths
the need for health care – including health promotion – per year over the 10 years from 1995 to 2005 increased by
that should drive supply, not expressed demand. We also a mean of just 0.3% pa (cumulative), with just 5,200 more
note that the latter concept being mediated by supply is deaths in 2005 than 1995 [44]. Strategies to promote
not exogenous. "healthy aging" [45] may further reduce the risk of chronic
diseases and associated disability, although there are also
The Productivity Commission (p.18)[6] argued that the contrary influences, including rising rates of obesity.
demand for health care services and consequently for the
health care workforce will primarily be driven by the ' age- Health workforce models
ing of the population' and associated increasing disability Because of market failure in health care and the health
rates, together with changing technology, changing bur- workforce [35,46], the market will not arrive at an optimal
den of disease, higher incomes and expectations. The health workforce solution meaning a clear role for health

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workforce planning. The improving quality and scope of associated increase in workforce numbers in line with
data collections in the health sector, and linked data sets aggregate population levels. This hardly fits in with the
present the opportunity for more detailed modelling in evidence-based approach increasingly demanded in other
this area. Tools, such as hardware and software platforms aspects of health care or health services research.
capable of undertaking detailed analysis are increasingly
cheap and ubiquitous. The current limitation is in the Classification of approaches
available models and frameworks that make use of these There have been a number of attempts, internationally, to
tools. classify the approaches to modelling health workforce
demand. Segal and Robertson [49] described five distinct
The dominant approach to 'health workforce planning' health workforce forecasting methods:-
has been highly simplistic personnel-to-population
ratios. The logic of such approaches is unclear, especially 1. Historic allocation – commonly the personnel-to-pop-
in the face of wide variations in observed ratios over time ulation method as described above.
and place. For instance, the nursing workforce across 28
OECD countries varied in 2002 from 1.7 nurses per 1,000 2. Budget driven mechanisms – also described as a prag-
population in Turkey to 15.3 nurses per 1,000 in Ireland. matic approach, where service levels and associated work-
At 10.4 practising nurses per 1000 population, Australia force levels are determined in the context of defined
had the 6th highest nursing ratio, higher than the UK at expenditure targets. This method has also been referred to
8.9, US at 7.9, Canada at 9.4 and New Zealand at 9.4. as the service-demands method [50].
Practising physicians in 2005 ranged from 1.5 to 4.9 per
1000 population across the OECD, with most countries 3. Waiting lists – whereby waiting lists are used as an indi-
between 2 and 4, with Australia at 2.7 per 1000 popula- cator of imbalance between supply and demand, which as
tion. (See Figure 2) [47]. noted above is compromised by the impact of supply on
observed demand.
O'Brien-Pallas & colleagues in their international review
of various health workforce models [48] are most critical 4. Professional group planning models – this is similar to
of the ratio-based methods of service provision and the a Delphi method of forecasting, where experts in the field

Figure 2 physicians per 1000 persons, OECD 2005, Source: OECD (2007) [47]
Practising
Practising physicians per 1000 persons, OECD 2005, Source: OECD (2007) [47].

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– in this case health professionals – develop the roles and Economists such as Maynard [54] also highlighted some
responsibilities and determine the appropriate level of of the forecasting challenges of health workforce planning
supply. and especially the possible impact of changes in produc-
tivity and associated new workforce roles. Changes in
5. Needs Assessment models – presume that health serv- technology are likely to affect both how services will be
ices planning and funding should enable and support delivered but also health status and disease profile. This,
patients and citizens to access best practice care (including together with changing community expectations – for
preventions services). A needs-based model developed by instance about the role for prevention – will reduce the
Segal is described in some detail in a recent publication by demand for certain services and associated health profes-
Segal at al [51]. Need is defined in this model by best prac- sionals and increase demand for others. Policy choices,
tise care and prevention protocols, applied to the health around matters such as specialisation or multi-skilling in
status of the population. This is translated into a health the health workforce will also influence how health serv-
workforce allowing various options for mapping skills ice demands are translated into health workforce needs.
and competencies onto occupations. A similar method is For instance, the shift in disease profile towards chronic
described by Ridoutt et al [52] based on work by O'Con- disease and community-based approaches to prevention
nor and Van Konkelneberg (1995) [53]. This type of and management means a greater demand for health pro-
approach offers an objective evidence-based approach to fessionals with expertise to support lifestyle change such
estimating health workforce need. as community and clinical dieticians, exercise physiolo-
gists, educators (public health and clinical), health pro-
Zurn et al [1] have also postulated a framework for analy- motion professionals and the possible role for new
sis of health workforce demand which adopts a needs specialisations. Such changes tend to be gradual and easy
based framework. They identify the broad influences on to identify. They should be capable of being incorporated
population health status – socio-demographic, economic, into health workforce models. The 'needs-based' demand
geographic and cultural, which when combined with model developed by Segal has been devised precisely to
available technology, define the health needs of the pop- incorporate changing circumstances.
ulation. Policy and resource allocation decisions will
influence how health needs are translated into health care It is also important as noted by the World Health Organi-
services and workforce demand (see Figure 3). Health sta- zation [5] that health workforce planning consider the
tus is shown as mutable, influenced by life style and other need for managers/health planners/researchers as well as
factors. This framework is presented as a general schema, the clinical workforce.
rather than a model for estimating health workforce
demand. Translation of the schema into a demand model Summary
would be highly complex, but also highlights the chal- Market failure in the health care labour market and an
lenging nature of this task. apparent mismatch between health workforce supply and
demand (defined by need) underline the importance of
effective health workforce planning.

Socio demographic Policy and

o Age distribution resource mix
o Education
Health
Geographic and Health states
Environmental care
x Disability
Cultural factors service
o Social Norms needs Health
o Behaviour and Self- Health
efficacy
workforce
Economic Factors Technology promotion demand
o Income & wealth

Figure 3
Factors and pathways influencing health workforce demand
Factors and pathways influencing health workforce demand. Source: Zurn et al [1].

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