Health expenditure

Health expenditure is defined as spending on health goods and services by all levels of governments as well as non-government entities such as individuals, private health insurers, and injury compensation insurers, which 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 (AIHW 2022a).

Health expenditure should reflect the relative need for health services – it should be higher for population groups with higher levels of need (AHMAC 2016; Whitehead 1991). One way to assess this is to compare differences in health status with differences in per person health expenditure.

This section presents information on health expenditure for First Nations people, with the exception of expenditure on medications as this information is not currently available by Indigenous status for the reported period. 

The burden of disease and overall death rates for First Nations people are around twice those of non-Indigenous Australians. In 2019–20, the average health expenditure per person for First Nations people (excluding medications) was $9,619, of which $5,244 (55%) was spent on hospital services (Table 6.3). The average health expenditure per person for First Nations people was 1.5 times as high as for non-Indigenous Australians.

Table 6.3: Average health expenditure per person (excluding medications), 2019–20^(a)(b)

(a)    Not age-standardised.
(b)    Table excludes medications, as expenditure on medications by Indigenous status is not currently available. Ordinarily, this would include funding for the Pharmaceutical Benefits Scheme, Repatriation Pharmaceutical Benefits Scheme and other pharmaceutical related funding (such as under-copayment drugs, private scripts, over the counter medications and other schemes).
(c)    Includes other health expenditure items not listed separately here, except medications – see Measure 3.21, Table D3.21.1.
Source: Measure 3.21, Table D3.21.1 – AIHW Health Expenditure Database.

Between 2010–11 and 2019–20, Australian Government health expenditure per person for First Nations people increased by 7.3% per year in real terms, from $2,269 to $4,295 per person (excluding expenditure on medications). Over the same period, state and territory government health expenditure per person for First Nations people increased by 6.4% per year in real terms, from $3,042 per person to $5,328 per person (Figure 6.10).

Figure 6.10: Australian Government and state and territory governments health expenditure per person for First Nations people, 2010–11 to 2019–20 (constant prices)

Source: Measure 3.21, Table D3.21.4 – AIHW Health Expenditure Database.

Looking at Indigenous-specific health programs, expenditure by the Australian Government increased from $703 million in 2010–11 to $972 million in 2019–20, a growth of 38%. In real terms, expenditure increased $716 to $923 million (29% increase).

For further information, see:

• 3.21 Expenditure on Aboriginal and Torres Strait Islander health compared with need