When we started placing doctors in Singapore we were surprised to find that there was no such thing as a payment award to govern how much doctors are paid. Instead, the remuneration offer is only made right at the end of the recruitment process, varies greatly from case to case and is veiled in a shroud of secrecy.
We have gained some interesting insights into what happens under these circumstances with gross inequities in pay resulting in resentment between colleagues when the cat inevitably gets out of the bag. In more transparent markets, such as the US, more open competition leads to runaway salaries for doctors with costs inevitably being passed on to patients.
Payment awards can be very effective at removing the heat from the earnings debate across large workforces. To be truly effective they must be highly transparent but also flexible to account for market pressures such as hiring to remote locations or hard to fill specialties.
Australia has well-established awards for doctors though one glaring anomaly exists that leads to some undesirable consequences. Namely, each state and territory work to a different award.
Wherever a difference like this occurs between employers who otherwise have similar offerings, financial competition inevitably creeps in. Over the past 10 years, the earning potential of specialist doctors in Australia has skyrocketed. There is little doubt that a significant factor in this has been interstate competition for clinical talent. Queensland and Western Australia, in particular, have moved decisively to gain an advantage over the more populous states in an attempt to build up their respective medical workforces.
This strategy has clearly worked but at a significant financial cost and it is only a matter of time before the likes of New South Wales and Victoria seek to redress the balance with another round of pay hikes - great for doctors - bad for taxpayers.
The recent abolition of state medical boards, in favour of a national registration body for doctors, has been a long time coming, and whilst execution has been problematic the concept is undeniably sound.
Surely Australia can create a single national medical award to put an end to the salary arms race that has been running up health costs over the past few years?