The Australian general practice sector continues to show resilience, with strong fundamentals underpinning demand from both patients and investors.

While profit structures are evolving due to shifts in doctor remuneration, the outlook for practice sales remains steady and balanced. 

Industry Performance and Revenue Trends 

On the surface, revenue growth for GP practices has appeared modest in recent years. However, this does not tell the full story.

Most practices engage doctors as subcontractors, who now typically receive 65% to 75% of their billings, compared with 60% to 65% previously. 

As a result, only 25% to 35% of billings are recorded as practice revenue. In reality, the sector is receiving significant funding growth, driven by Australia’s growing and ageing population and rising demand for management of chronic conditions. 

Cost and Profitability 

The industry maintains a relatively consistent cost structure:

  • Staff wages (excluding doctors): 25% to 30% of revenue 
  • Rent: 3% to 6% of revenue 
  • Purchases: 5% to 15% of revenue 
  • Other overheads: 40% to 50% of revenue 

Average EBIT profit sits at 11.3%, with adjusted EBITDA more typically in the 13% to 17% range. 

Market Outlook 

Looking forward, revenue is expected to grow at around 3.6% annually through to 2030, supported by demographic shifts and sustained healthcare needs.

However, margins are not expected to grow at the same pace, as practices face pressure to pay higher percentages to retain doctors. Bulk-billing rates are declining as practices balance rising wage costs with financial sustainability. 

Current Practice Sales Market 

The sales market for general practices is currently in equilibrium, with supply broadly matching demand. Key trends include:

  • Regional practices are continuing to attract overseas-trained doctors due to immigration pathways. 
  • Amalgamations of smaller practices into larger, more viable businesses. 
  • Private buyers and doctors make up the majority of purchasers. 
  • Corporate buyers enter the market selectively, usually when practices have several full-time equivalent (FTE) doctors under long-term contracts. 

When long-term contracts are absent, corporates often use deferred consideration or earn-outs tied to performance to manage risk. 

What Drives Buyer Interest 

General practices that attract the strongest buyer demand typically have: 

  • Consistent growth in patient numbers and profitability 
  • Long-term, non-retiring doctors in place 
  • Stable rental income from pathology sub-leases 
  • A low reliance on any single GP 
  • Room for expansion without significant increases in rent 
  • A strong patient demographic with capacity for gap payments 
  • Well-managed chronic disease and telehealth services 

Final Thoughts

General practice businesses remain one of the most stable and reliable healthcare assets in Australia. Despite structural changes to profitability, strong buyer demand and resilient healthcare needs continue to support a balanced marketplace.

For practice owners considering succession or sale, preparing the business around the factors that drive buyer interest is key to maximising value. 

Disclaimer: This content is general in nature and not financial or business advice. Please reach out to Clinch Group for personalised advice.