In this report, data is taken from Australia’s National Health Accounts data in order to understand more about the people receiving care and the diseases and conditions being managed. Estimates are presented for the following areas of spending:

  • Public hospital admitted patients
  • Public hospital emergency departments
  • Public hospital outpatients
  • Primary health care (general practitioner services, allied health and other services, pharmaceutical benefits scheme and dental expenditure)
  • Referred medical services (specialist services, pathology and medical imaging).

Estimates of spending on COVID–19 in the hospital setting as well as through Medicare have been included in this report. For a more detailed analysis of the response to COVID–19, refer to Health system spending on the response to COVID–19 in Australia 2019–20 to 2021–22.

All sources of funding, including patient co-payments, are included in spending estimates.

The data in this report are based on hospital admissions, emergency department records, outpatient records, MBS and PBS records. For each of these data sources, patients' sex was recorded as male, female or other, not reported or unknown.

This may be based on what the patient selected, or how staff completed the record. It may also be based on an existing record for the patient, which may no longer reflect how they identify.

It is important to note that it is not known if the people completing these records interpreted sex to mean sex at birth or gender identity.

This report uses the terms 'male’ and ‘female', but it should be noted that some participants may not identify with these terms. Where sex was reported as other, not reported or unknown, the data has been included as part of the spending for ‘Total Persons’.

How do we measure disease costs?

The cost of disease is not just financial: being unwell or suffering from a health condition has other effects on quality of life, affecting people’s ability to work or do the activities they enjoy. The spending estimates do not include direct costs from outside of the health care sector or estimates of the indirect costs due to illness.

How much is spent on treating, managing, or preventing conditions in financial terms can be influenced by a range of factors such as the cost and availability of effective treatments, and disease prevalence. As such, the disease expenditure estimates in this report do not necessarily reflect the incidence or prevalence of those conditions, or the full ‘burden’, or human cost. The Australian Institute of Health and Welfare (AIHW) has produced separate estimates of disease burden in Australian Burden of Disease Study

It is not feasible (or appropriate) to allocate some forms of health spending to specific diseases. For example, administration expenditure and capital expenditure are generally unable to be attributed to any particular condition. In addition, most community and public health programs, which support the treatment and prevention of many conditions, do not have sufficient data to allocate to conditions. Therefore, the disease expenditure estimates in this publication are not directly comparable with estimates published in the AIHW’s Health expenditure Australia reports (which cover all health spending). Refer to Figure 2 in Area of spending to see how the expenditure from Health expenditure Australia 2021–22 for 2020–21 relates to expenditure reported in this report. Also refer to Table 2.2 in Health system spending of disease and injury in Australia: Overview of analysis and methodology 2020–21for more detailed information on the inclusions and exclusions.

For details on the estimation methods, scope of data included, and comparability to previous studies, readers are directed to Health system spending on disease and injury in Australia: Overview of analysis and methodology 2020–21.

Health spending in Australia is generally managed through particular funding programs such as the National Health Reform Agreement or the Medicare Benefits Schedule (MBS). Often the relationship under these schemes between the spending, the particular diseases or conditions being managed, and the demographic characteristics of the people whose care the spending is for, is complex. It can be difficult, for example, to precisely identify for a hospital stay involving someone suffering from a number of ailments and including a range of procedures and treatments, which expenses were related to which conditions. Health spending is also often associated with the management of symptoms and issues for which there is no specific diagnosis (for example, someone attending to an Emergency Department (ED) with abdominal pain for which no specific cause can be identified).

The aim of this report is to use a range of modelling techniques to apportion health spending to population groups based on age, sex, and to disease expenditure groups using the International Statistical Classification of Diseases and Related Health Problems (ICD) and the AIHW’s Australian Burden of Disease Study (ABDS) conditions as far as is possible. Due to data availability, allocated spending is skewed towards activity in hospitals, and estimates should be interpreted with this in mind.

Whilst findings in this report are based on estimates (rather than direct observations) these data provide important insights into the nature and drivers of health spending, such as how an ageing population affects health spending.

This current disease expenditure study largely draws upon previously published methods. The key changes that have been made in the 2020–21 study compared with the 2019-20 study related to MBS mapping, PBS mapping, ED analysis, NAP analysis and the way COVID–19 cases were identified. Refer to the Technical notes and the accompanying methods report Health system spending on disease and injury in Australia: Overview of analysis and methodology for further information 2020–21.