Health expenditure

In 2022–23, the total health expenditure for First Nations people was estimated to be $12,286 million. Of this:

• over half (55%, $6,717 million) was spent on hospital services
• 7% ($861 million) was spent on Australian Government First Nations-specific health programs through the Australian Government Indigenous Australians' Health Programme (IAHP) 
• 6% ($737 million) was spent on Medicare services through the Medicare Benefits Schedule
• 5.6% ($685 million) was spent on benefit-paid pharmaceuticals through the Pharmaceutical Benefits Scheme (see also Measure 3.15 Access to prescription medicines)
• the remaining 27% ($3,286 million) was spent on other recurrent health expenditure. The majority of this expenditure was on community health services excluding the IAHP ($816 million), other medications ($576 million) and dental services ($482 million).

The burden of disease and overall death rates for First Nations people are around twice those of non-Indigenous Australians, based on age-standardised data. 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; Braveman & Gruskin 2003). Note that expenditure estimates do not provide information on unmet needs for health services, or the quality, appropriateness, cultural safety or ease of access to care.

In 2022–23, the average health expenditure per person for First Nations people was $12,146, which was 1.4 times as high as for non-Indigenous Australians (Table 6.3). Note that these estimates of total health expenditure could not be age-standardised. As health service use is generally higher at older ages, the different age structures of First Nations and non-Indigenous populations should be considered when interpreting this comparison (see Demographic and social context). It should also be noted that this ratio combines spending from a diverse range of health services, and does not reflect experiences of the health system at the individual level.

On a per person basis, MBS expenditure for First Nations people was approximately two-thirds (0.65 times) that of non-Indigenous Australians, with $729 spent per person for First Nations people compared with $1,117 per person for non-Indigenous Australians. After age-standardising the data, MBS expenditure for First Nations people was 0.9 times that of non-Indigenous Australians. PBS expenditure for First Nations people was $677 per person, compared with $758 per person for non-Indigenous Australians, which is a ratio of 0.9. Based on age-standardised data, PBS expenditure for First Nations people was 1.4 times that of non-Indigenous Australians.

Table 6.3: Average health expenditure per person, 2022–23

(a)     Age-standardised ratios are not available for all areas of health expenditure. 
(b)    Excludes expenditure under the PBS Section 100 Remote Area Aboriginal Health Services Program, as these data are not available by age. 
(c)     Ratio not published because while some non-Indigenous Australians receive services under the IAHP, these services are targeted to First Nations people.
(d)     Includes other health expenditure items not listed separately here– see Measure 3.21, Table D3.21.1 for details.
Note: Data are not age-standardised. Health expenditure varies by age, and so the different age structures of the First Nations and non-Indigenous population should be considered when interpreting these results. 
Source: Measure 3.21, Tables D3.15.7, D3.21.1 and D3.21.15 – AIHW Health Expenditure Database.

From 2016–17 to 2022–23, Australian Government health expenditure per person for First Nations people increased by 2.4% per annum when adjusted for inflation, at $5,708 per person in 2022–23, compared with $4,962 per person in 2016–17. During the same period, state and territory government health expenditure per person for First Nations people increased by 7.8% per annum when adjusted for inflation, from $3,086 per person to $4,832 per person. (Figure 6.10).

Figure 6.10: Australian Government and state/territory government health expenditure per person for First Nations people, 2016–17 to 2022–23 (inflation adjusted)

Note: Expenditure from 2016–17 to 2022–23 is expressed in 2022-23 prices, adjusted for inflation.

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

Per person expenditure by the Australian Government on First Nations-specific health programs increased from $1,110 per person in 2016–17 to $1,144 per person in 2022–23 after adjusting for inflation, an average increase of 0.5% per annum.

For further information, see:

• 3.15 Access to prescription medicines
• 3.21 Expenditure on Aboriginal and Torres Strait Islander health compared with need