The AIHW has revealed how the money was spent, from hospitals to primary care, which states got the most and which diseases were the most expensive in 2023-24.
Australia’s total health expenditure rose to $270.5 billion in 2023-24, representing 10.1% of the nation’s gross domestic product, according to new data released today by the Australian Institute of Health and Welfare.
This equates to $10,037 per person and marks a $2.8 billion increase on the previous financial year.
About a third of the total health expenditure ($89.136 billion) went towards primary health care, while hospitals accounted for $113.836 billion). This included $90.8 billion for public hospital services and $23.036 billion for private hospitals. Community health “and other” spending was $13.429 billion in 2023-24.
Benefit paid pharmaceuticals cost $16.162 billion, with “all other medications” costing $17.807 billion. Research spending was $7.642 billion.
The AIHW’s latest reports – Health expenditure Australia 2023-24, Health system spending on disease and injury in Australia 2023-24 and Health system spending per case of disease and for certain risk factors – offer a detailed overview of national health spending, including funding sources, key disease areas and long-term trends.
AIHW spokesperson Geoff Callaghan said the institute had been tracking Australia’s health expenditure for more than three decades, as part of preparing Australia’s National Health Accounts.
He said the reports provided critical insights into how the health system interacts with the broader economy. This report’s estimates were based on data from the AIHW’s Health Expenditure Database (HED), a collation of more than 50 data sources capturing health spending by governments, individuals, private health insurers and other private sources.
Total health spending was 1.1% higher in 2023-24 than in 2022–23 after adjusting for inflation, while spending dropped by 1.3% on a per person basis.
Per person health was well below the average growth rate of 1.7% over the decade up to 2023–24 and was attributed primarily to increased population growth in a post-pandemic period.
“Spending from non-government sources including individuals and private health insurance providers increased by 3.7% in real terms, driving the overall increase in health expenditure,” Mr Callaghan said.
“While federal and state governments together funded almost 70% of total health expenses, overall government spending decreased by 0.1% in 2023-24 due to lower public health spending in the post-pandemic period.”
The main areas of increased health spending in 2023-24 were hospitals, by $1.3 billion (1.2% increase); referred medical services, by $0.7 billion (2.9% increase); other services (including patient transport services, aids and appliances, and administration expenses), by $0.6 billion (3.2% increase); and capital expenditure, by $0.7 billion (4.8% increase).
Conversely, estimated spending decreased in some areas, including primary health care (including public health), by $0.4 billion (0.5% decrease); and health research, by $0.1 billion (1.4% decrease).
Of the $270.5 billion total, the federal government contributed $106.2 billion, while state and territory governments provided $82.0 billion. Health spending as a share of total government expenditure fell marginally from 17.1% to 16.8%.
Primary health care spending declined by 0.5% to $89.1 billion, largely because of reduced expenditure on public health measures such as covid vaccinations and rapid antigen testing, the AIHW reported.
Hospital expenditure rose by 1.2% to $113.8 billion, driven by higher rates of hospitalisation and patient admissions.
The AIHW also drilled down into health spending by state and territory. It found more than half (54.7%) of the country’s total health spending in 2023-24 was jointly spent in NSW ($80 billion) and Victoria ($68 billion).
“These states also accounted for over half of Australia’s population [approximately 57%,” the report noted.
Health expenditure in other states and territories included Queensland ($57.4 billion); Western Australia ($29.5 billion); South Australia ($19.4 billion); Tasmania ($6.6 billion); Australian Capital Territory ($6.1 billion); and the Northern Territory ($3.5 billion).
Out of $180.4 billion in health spending that could be directly linked to disease and injury in 2023-24, cancer remained the costliest disease group at $19.7 billion, followed by cardiovascular diseases ($16.9 billion) and musculoskeletal disorders ($16.3 billion).
Cancer has been the highest-cost disease group since 2017-18, consistently accounting for about 10% of total disease-related expenditure, and its associated costs have doubled since 2013-14.
Cancer also carried the greatest burden of disease in 2023-24, while mental health and substance use disorders ranked second in burden but only seventh in spending.
Health system spending attributable to potentially avoidable risk factors reached $38 billion, with overweight and obesity responsible for the largest share at $7 billion.
Cancer and other neoplasms had the highest average spending per case at $17,000, while acute lymphoblastic leukaemia was the most expensive condition on a per-case basis, at $511,458 per case.
Schizophrenia was the most expensive of the mental health conditions and substance use disorders in 2023-24, with spending around $29,000 per case, the report showed.
Among cardiovascular diseases, spending per case of aortic aneurysm was highest at around $146,000, followed by hypertensive heart disease ($26,000).
Motor neurone disease was the most expensive neurological condition per case ($24,000) followed by Guillain-Barre Syndrome at around $22,000.
Cystic fibrosis was the second most expensive of all diseases and conditions ($170,316 per case) in 2023-24.
Overall spending by disease and injury increased by $10.2 billion to $180.4 billion in 2023-24, up from $170.2 billion in 2022–23, the report revealed.
Of the $180.4 billion, close to two-thirds was for hospital services ($114.1 billion), over one-quarter for primary health care ($50.0 billion) with the remaining spending for referred medical services ($16.3 billion).
In 2023-24 the highest spending was for cancer ($19.7 billion), followed by cardiovascular diseases ($16.9 billion), and musculoskeletal disorders ($16.3 billion). Second highest in terms of disease burden was mental health conditions and substance use disorders.
Spending on cancer has more than doubled from $9.1 billion in 2013-14 to $19.7 billion in 2023-24 and has been the highest ranked disease group in terms of spending since 2017-18.
In 2023-24, for the first time, spending on lung cancer ranked higher than spending on any other specific cancer with close to $2 billion spent on this condition.
Cancer, cardiovascular diseases and musculoskeletal disorders, were the top three disease groups in all but one year over the period 2013–14 to 2023–24, accounting for close to one-third of spending each year.
Spending on chronic conditions accounted for around $98 billion in 2023-24, over half (54%) of all disease spending in that period.
Over the period 2013-14 to 2023-24, total spending by disease and injury grew $78.1 billion (in current prices), of which $47.1 billion (60%) was due to an increase in spending for chronic conditions.
The conditions with the highest spending in 2023-24 were injuries from falls ($5.4 billion), osteoarthritis ($4.8 billion) and back pain and problems ($4 billion). This was followed by spending on coronary heart disease ($3.8 billion) and lower respiratory infections (which includes influenza and pneumonia) ($3.7 billion).
In 2023-24, there was higher spending for females ($96 billion) than males ($85 billion). Spending peaked in the 70–74 years age group for females and 75–79 years age group for males.
Read the full reports here.
