Health Expenditure Australia 2019-20

Individuals spent an estimate of $29.8 billion out-of-pocket on health goods and services in 2019–20. This was 7.6% less than in 2018–19.

In 2019–20, individuals spent an estimate of $11.0 billion (36.8%) on medications not subsidised through the PBS, including over-the-counter medications, vitamins and health-related products. Another $5.5 billion (18.5%) was spent on dental services and $4.1 billion (13.7%) on both referred and unreferred medical services (Table 20). Individuals’ spending on private hospitals declined by 33.7% compared to 2018–19, most likely due to the impacts of COVID-19.

Per person individual health spending

Health spending by individuals equated to an average of $1,165 per person in 2019–20.
This was made up of:

• $429 on non-subsidised medications
• $216 on dental services
• $160 on referred and unreferred medical services
• $109 on hospital services
• $106 on aids and appliances
• $63 on health practitioners, such as chiropractors, optometrists, practice nurses and physiotherapists
• $59 on medications partly subsidised by the PBS (Figure 18).

This annual per person spending decreased by 9.1% in 2019–20 in real terms, $117 less than in 2018–19. This was the slowest year of growth over the decade to 2019–20.

Figure 18: Estimated average⁽ᵃ⁾ per person individual health spending, by area of spending, constant prices⁽ᵇ⁾, 2009–10 to 2019–20

During 2019–20, providers of private health insurance financed $16.7 billion (8.2%) of total health spending. More than half ($9.5 billion) was for hospital services, with private hospitals receiving an estimated $8.6 billion. Approximately $2.8 billion was spent on primary health care services (Figure 19).

Spending by health insurance providers declined by 5.3% ($0.9 billion) in 2019–20 in real terms. This was the only year where there was a decline in growth over the decade to 2019–20, most likely due to the impact of the COVID-19 pandemic.

Figure 19: Private health insurance provider health spending by area of spending, constant prices⁽ᵃ⁾, 2009–10 to 2019–20

Private health insurance provider health spending per person covered

In 2019–20, private health insurance providers spent an estimated average of $1,485 per person covered by a private hospital insurance policy. This was a decrease of $80 (5.1%) from 2018–19 in real terms and was lower than the average annual growth of 2.7% per person covered over the decade (Figure 20).

South Australia ($1,721), Queensland ($1,618) and Tasmania ($1,603) had the highest spending by private health insurers per person covered, at more than 1.5 times the amount of the Northern Territory ($891) (Figure 20).

Nationally, spending by private health insurers equated to an average of $652 per person in 2019–20, including those not covered by private health insurance. This represented a decrease of 6.7% from 2018–19 in real terms. The average annual growth rate for the decade from 2009–10 was 2.4% (Table 24).

Figure 20: Average per person⁽ᵃ⁾ spending by private health insurance providers for each state and territory, constant prices⁽ᵇ⁾, 2009–10 to 2019–20

In 2019–20, other non‑government sources spent $13.5 billion on health, representing 6.7% of total health spending in the year (Table 10). This presented a slight increase of 0.8% compared with 2018–19, lower than the average annual growth rate over the decade (4.9%).

During 2019–20, injury compensation insurers spent $3.5 billion on health goods and services: $2.3 billion by workers’ compensation insurers and $1.2 billion by compulsory third‑party motor vehicle insurers (Table 25).

To better understand how health spending is impacting the disposable or readily accessible wealth of people (the ‘out-of-pocket costs’), the AIHW uses an amalgam of various components of non-government spending referred to as Personal health spending. It includes fees charged directly for services, some private spending in hospitals and donations for health research, but excludes expenses such as rebates from injury compensation insurers and private health insurance funds. In other words, it includes “Individuals” and “Other private sources” in the HED matrix (see the Australian National Health Account: concepts, methodology and data sourcesa sources and methodology for more details). Personal health spending is compared with both average incomes and measures of net worth to understand whether, on average across the population, out-of-pocket spending is rising relative to personal wealth over time. Note that these are average figures, so the analysis here does not take into account inequality issues in income, wealth, and personal health spending.

In 2019–20, personal out-of-pocket health costs amounted to an average of $1,556 per person, 2.3% of average annual income, a slight decline from 2018–19 (2.6%) (Figure 21).

Figure 21: Growth in average annual income⁽ᵃ⁾, average personal health spending per person⁽ᵇ⁾ and health spending to income ratio, current prices, 2009–10 to 2019–20

In 2019–20, personal spending on health represented on average 0.4% of individual net worth. This did not change much over the decade (Figure 22). On average, over the decade, per person net worth grew nominally by 4.0% per year, while per person personal health spending grew by 3.1% per year. In 2019–20, per person net worth grew by 3.0%, while per person personal health spending declined by 5.6% in nominal terms.

Figure 22: Growth in per person net worth, per person⁽ᵃ⁾ personal health spending and personal health spending to per person net worth ratio, current prices, 2009–10 to 2019–20