Public and private hospitals are funded from a range of different sources, reflecting the types of patients they treat and the services they provide. Governments mainly fund emergency department and outpatient services, whereas admitted patient services are commonly funded by private (non-government) sources, as well as government sources.
The sources of funds reported here are the original sources rather than immediate sources. Hence, the Australian Government is regarded as the source of funds for the contributions that it made for public hospitals via intergovernmental agreements, even though the funds were provided to the state and territory governments that actually spent the money on public hospitals. The Australian Government is also regarded as the source of funds for the contributions it made to private hospitals via the private health insurance premium rebates, even though the funds were provided through health insurance funds or their members.
In general terms, the state and territory governments and the Australian Government provide most of the funds for public hospitals (Figure 8) (AIHW 2011). The proportion of funding that was from the Australian Government increased between 2007–08 and 2009–10 (Figure 10). Private hospitals are mainly funded by private health insurance and out-of-pocket payments by patients (Figure 9).