Australian Institute of Health and Welfare (2022) Health expenditure, AIHW, Australian Government, accessed 02 October 2022.
Australian Institute of Health and Welfare. (2022). Health expenditure. Retrieved from https://pp.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure
Health expenditure. Australian Institute of Health and Welfare, 07 July 2022, https://pp.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure
Australian Institute of Health and Welfare. Health expenditure [Internet]. Canberra: Australian Institute of Health and Welfare, 2022 [cited 2022 Oct. 2]. Available from: https://pp.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure
Australian Institute of Health and Welfare (AIHW) 2022, Health expenditure, viewed 2 October 2022, https://pp.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure
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Health expenditure is money spent on health goods and services. It includes money spent by all levels of governments as well as non-government entities such as individuals, private health insurers, and injury compensation insurers. Health spending on goods and services includes hospitals (both public and private); primary health care (unreferred medical services, dental services, other health practitioners, community health, public health, and medications); referred medical services; other services (patient transport services, aids and appliances, and administration); research; and capital expenditure.
The AIHW has been reporting on estimates of health spending in Australia for more than 3 decades. The annual estimates are based on data from the AIHW health expenditure database, which is a collation of more than 50 data sources that capture health spending by governments, individuals, private health insurers, and other private sources in each financial year (AIHW 2021b). Since data from some of the sources could only be obtained with a significant time lag (especially data from state and territory governments, as well as some Government Finance Statistics data), it normally takes between 15 to 18 months after the end of the financial year to release the health expenditure report. The most up-to-date report was Health expenditure Australia 2019–20.
The initial impact of COVID-19 on the whole health system was analysed in Health expenditure Australia 2019–20. In addition, data on spending by governments on specifically identifiable COVID-19 programs are available for 2019–20 and 2020–21. Government COVID-19 spending in 2019–20 and 2020–21 includes:
Data do not include state and territory governments’ spending outside the scope of the NPCR.
Data for comparison are sourced from the Organisation for Economic Co-operation and Development (OECD). The OECD is a forum where governments come together to discuss a range of issues, such as health, with the aim of improving economic and social wellbeing of communities (OECD 2021a). The OECD currently has 38 member countries including Australia, which has been a member since 1971. For more information on the OECD, see OECD.
The OECD uses the System of Health Accounts (SHA) 2011 framework to collect and report data on health expenditure. This framework looks at the consumption, provision, and financing of health care (OECD et al. 2017). The most updated comparable data used on this page are for 2019 (the 2019–20 financial year).
Australia spent an estimated $202.5 billion on health goods and services in 2019–20 – this is an average of approximately $7,926 per person. The real growth (adjusted for inflation) in total health spending (recurrent and capital) was 1.8% more than in 2018–19 and lower than the average annual growth rate over the decade to 2019–20 (3.4%).
In 2019–20, health spending accounted for 10.2% of the gross domestic product (GDP) in Australia, 0.2 percentage points higher than in 2018–19.
See Overview of Health expenditure Australia 2019–20 for more information.
In 2019–20, governments funded $142.6 billion of the total health expenditure (70.4%) with non-government sources funding the remaining $59.9 billion (29.6%).
Of the total government funding in 2019–20, the Australian Government contributed $86.4 billion, with state and territory governments contributing $56.2 billion. In 2019–20, health spending by non-government entities (including individuals, private health insurers, injury compensation insurers and other private sources) decreased by 5.2% in real terms compared with 2018–19. Individuals were the largest contributor to this decline, with spending of $29.8 billion being 7.6% less than in 2018–19. Of the estimated non-government health spending ($59.9 billion) in 2019–20, individuals spent $29.8 billion (49.7%), private health insurers $16.7 billion (27.8%) and other non-government sources $13.5 billion (22.5%).
See Spending trends by source in Health expenditure Australia 2019–20 for more information.
In 2019–20, total health spending was distributed across health services, with estimates of:
The remaining $31.9 billion (15.7%) was spent on other services, research, and capital spending.
The greatest increases in recurrent spending in 2019–20 were for:
See Trends by area of spending in Health expenditure Australia 2019–20 for more information.
The pandemic impacted health spending in many ways, often through increasing the cost and complexity of service delivery in ways that are difficult to quantify. There were, however, some large COVID-19–specific response programs, such as the National Partnership on COVID-19 Response (NPCR) and spending on COVID-19–related programs by the Australian Government Department of Health. Over the period 2019–20 to 2020–21, there was an estimated $20.0 billion spent through these programs ($12.1 billion on the NPCR and $7.9 billion on the Department of Health programs) in current prices.
In 2019–20, spending on the NPCR was estimated to be $4.5 billion in current prices ($2.5 billion by the Australian Government and $2.0 billion by state and territory governments). Note that the pandemic only started about 4 months before the end of the 2019–20 financial year. During 2020–21, government spending through the NPCR was $7.7 billion ($4.0 billion by the Australian Government and $3.7 billion by state and territory governments) (Figure 1). The components of the Australian Government spending in 2020–21 were:
As part of the NPCR, state and territory governments also funded $1.3 billion on hospital services payments and $2.3 billion on state public health payments.
The bar chart shows spending on the National Partnership on COVID-19 Response (NPCR), funded by both Australian Government and state and territory governments over the period 2019–20 to 2020–21. In 2019–20, the Australian Government funded $2.4 billion while state and territory governments contributed $2.0 billion. In 2020–21, the Australian Government spending on the NPCR was $4.0 billion and state and territory governments funding was $3.7 billion.
Total Australian Government spending through specific COVID-19 Department of Health programs (outside the NPCR) up to 2020–21 was estimated to be $7.9 billion in current prices ($1.7 billion in 2019–20 and $6.2 billion in 2020–21) (Figure 2).
The distribution of the spending in 2020–21 included:
Note that COVID-19–related spending for aged care is outside the scope of this page. This also does not include COVID-19–related spending by other Australian Government agencies, which might fall into a broader scheme of economic response to COVID-19.
The bar chart shows Australian Government spending through Department of Health programs over the period 2019–20 to 2020–21. In 2019–20, Australian Government spending in response to the COVID-19 pandemic was estimated to $1.7 billion. It was estimated to be $6.2 billion in 2020–21. Of this, $2.6 billion spent on the COVID-19 related medical services, $1.2 billion on COVID-19 medical goods and equipment, $1.1 billion on Other COVID-19 related health spending, $0.9 billion on COVID-19 vaccination, $0.2 billion on COVID-19 testing and $0.1 billion on COVID-19 related investments.
Using the OECD-SHA, Australia’s health spending to GDP ratio ranked 11th in 2019 and was between 17th and seventh among OECD countries from 2000 to 2019 (Figure 3). Note that comparable data are only available for 36 countries (excluding Colombia and Costa Rica) among 38 OECD member countries.
Figure 3: Health spending to GDP ratios and Australia’s rank among OECD countries, current prices and local currencies, 2000 to 2019
The line chart shows that Australia’s ranking among OECD countries ranged from 7th to 17th over the period 2000 to 2019. Australia’s ranking was relatively volatile from 2007 to 2015. Australia’s ranking was quite stable from 9th to 11th in the recent years (2016 to 2019).
The bar chart shows that in 2019 health spending as a proportion of GDP was highest in the United States at 16.0% and Japan at 11.0%. The lowest ratio was lowest in Luxembourg at 4.9% and Turkey at 4.3%. Australia’s health spending as a proportion of GDP of 9.3% was the 11th highest among OECD countries and 1.3 percentage point higher than the OECD median.
For more information on health expenditure, see:
Visit Health & welfare expenditure for more on this topic.
AIHW (Australian Institute of Health and Welfare) (2019) Australia’s health expenditure: an international comparison, AIHW, Australian Government, accessed 20 December 2021.
AIHW (2021a) Emergency department care activity, Emergency department care activity, AIHW, Australian Government, accessed 21 February 2022.
AIHW (2021b) Health expenditure Australia 2019–20, AIHW, Australian Government, accessed 15 February 2022.
AIHW (2021c) Hospital activity low during early months of COVID-19 pandemic (Media release) Hospital activity low during early months of COVID-19 pandemic [media release], AIHW, Australian Government, accessed 21 February 2022.
AIHW (2021d) Non-admitted patients, AIHW, Australian Government, accessed 21 February 2022.
NHFB (National Health Funding Body) (2022) Administrator’s Jurisdictional Advisory Committee, NHFB, Australian Government.
OECD (Organisation for Economic Co-operation and Development) (2021a) About the OECD, OECD website, accessed 20 December 2021.
OECD (2021b) Health statistics 2021, stats.oecd.org, accessed 20 December 2021.
OECD, Eurostat and WHO (World Health Organization) (2017) A system of health accounts 2011: revised edition, OECD website, accessed 20 December 2021.
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