Ask a medical student why they want to work in the bush, and they will just laugh.

That is what a major healthcare provider says about students who have committed to work in rural Australia in return for a government-funded university place.

The "bonded medical programs", an initiative that aims to address doctor shortages in country areas, are ineffective and should be shut down, according to a Senate inquiry's interim report into GP services in regional Australia.

Dr Hamish Meldrum, co-founder of healthcare service Ochre Health, told the inquiry some of the bonded medical students do not understand him when he asks why they want to work in rural areas.

"They laugh at me and say: 'No. Nobody wants to go rural. We just put down that we want to be rurally bonded students so that we can get into medical school," he said.

Subsidised medical studies are one of many government policies failing to address the lack of doctors in rural areas, according to the interim report from the Senate's community affairs committee.

The report makes nine recommendations, including that the government substantially increase Medicare rebates and rethink models for prioritising areas in need of primary healthcare.

The inquiry, which held six public hearings in regional areas, heard costs to provide care are increasing yearly, but successive governments have not boosted patient rebates.

A Medicare freeze meant rebates did not increase yearly at an indexed rate from 2013 until a phased re-introduction in 2017-18, depriving GPs of a pay rise.

The freeze continues to affect doctors' businesses, with rising costs of care deterring students from training as GPs, deepening attitudes that general practice is not a valued profession, and forcing some medical clinics to close.

The report also recommends the government look into the way it classifies some regions as priority areas, using algorithms described at the inquiry as "bad data giving bad decisions".

The committee said it supports the government's goal of improving the distribution of the medical workforce across Australia, and many policies are well-intentioned.

"However, these policies are failing to have a substantial impact and as a result individuals and communities are left with limited or no access to primary health care," the report says.