Governments spent more, individuals spent less, on health care during 2021–22

Spending on health goods and services increased by $13.7 billion to $241.3 billion during 2021–22 as the health system continued to respond to the COVID-19 pandemic, according to a new report by the Australian Institute of Health and Welfare (AIHW). 

Health expenditure Australia 202122 shows that while government spending on health increased, spending by individuals, private health funds and other non-government sources declined. 

‘Total health spending in 2021–22 was equivalent to 10.5% of Gross Domestic Product (GDP), approximately 0.2 percentage points lower than in 2020–21,’ said AIHW spokesperson Geoff Callaghan.

‘After adjusting for inflation, total health spending grew by 6.0% compared with 2020–21 – higher than the average yearly growth rate over the decade (3.4%). This translated to an average health spending of $9,365 per person in 2021–22 – an increase of $484 in real terms from the previous year.’

Recurrent spending on hospitals increased by $4.2 billion (4.6%) in real terms to $96.0 billion, which was partially driven by an increase in hospitalisations involving a COVID-19 diagnosis.  

Recurrent spending on primary health care grew by $8.3 billion (10.9%) in real terms to $84.1 billion, which was associated with increased spending related to the pandemic, such as COVID-19 vaccines and personal protective equipment. Primary health care spending also included $13.6 billion on unreferred (mainly general practice) medical services.

The Australian Government spent $105.8 billion on health, representing a $8.4 billion real increase (8.6%) from the previous year. This was more than double the average annual real growth in the decade to 2021–22 (3.5%) and also higher than 2020–21 (7.6%). State and territory governments spent $70.2 billion on health, an increase of 11.0% ($6.9 billion) from 2020–21 in real terms, and above the average for the decade of 4.0%.

Government spending through the National Partnership on COVID-19 Response (NPCR) was $12.8 billion ($6.6 billion by the Australian Government and $6.2 billion by state and territory governments). Australian Government spending through specific COVID-19 Department of Health and Aged Care programs (outside the NPCR) was estimated to be $12.1 billion. 

Health spending by individuals decreased by 0.9% in real terms to $33.7 billion during 2021–22, Spending by private health insurance providers also decreased by 5.3% ($1.0 billion) in real terms to $17.5 billion. 

‘It is likely that COVID-19 restrictions and temporary suspension of non-urgent elective surgery and non-essential treatments in most states and territories resulted in lower spending by individuals, private health insurance providers, and other non-government entities in 2021–22,’ Mr Callaghan said. 

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