Expenditure on mental health-related services Print this page

Mental health services classified as having a General target population accounted for the majority of spending for public sector specialised mental health hospital services during 2020–21 ($2.2 billion or 73%). Child and adolescent services had the highest costs per patient day ($2,243), continuing a long-term trend of these services costing more to run than services with a General ($1,281), Older person ($1,182) or Forensic ($1,315) target population.

There was an average annual increase in spending per patient day of 1% for General, 2% for Older person, and 2% for Forensic services between 2016–17 and 2020–21, in real terms. Child and adolescent spending decreased (by an annual average of 1%) over this period.

Average patient day costs for acute public sector specialised mental health hospital services at the national level were higher than non-acute services for General ($1,377 and $944), Older person ($1,199 and $1,076) and Forensic ($1,443 and $1,200) population categories in 2020–21. Child and adolescent had higher average patient day costs for non-acute services ($3,092) than acute services ($2,175) in 2020–21.

Community mental health care services accounted for almost $2.7 billion in spending on mental health services during 2020–21, representing 39% of total state and territory spending.

Of the $432 million spent on residential mental health services during 2020–21, the majority was spent on 24-hour staffed services ($398 million or 92%). General services ($282 million) accounted for two-thirds (65%) of spending.

The average national cost per patient day for residential mental health services was $604 per day in 2020–21. Average costs varied between states and territories, from $405 in Western Australia to $850 in the Australian Capital Territory.

Spending on public sector specialised mental health hospital, community and residential services can be combined and presented by target population. Spending on General services ($270 per person) was the highest of the target populations during 2020–21, reflecting that many jurisdictions do not have the other specialised target population hospital services. In real terms, spending on General, Child and adolescent and Forensic services had a small average increase per person of about 2% to 3% per year between 2016–17 and 2020–21, while spending on Youth services increased by an average of 14% per year.

During this time, per person spending on Older person services decreased by an average of 2% per year, suggesting that Older persons services may have not proportionally increased to the same extent as the increase in the population. In real terms, total spending on Older person services showed an annual average increase of 2% between 2016–17 and 2020–21, while the Older person population (65 years and over) increased by 19%.

Since 2011–12, there has been a decrease in Australian Government spending on PBS mental health-related prescriptions and an increase in spending on Medicare-subsidised services and programs, and national programs and initiatives. In 2020–21 spending on national programs and initiatives managed by the DSS decreased from previous years, largely due to clients transitioning from national programs and initiatives to the National Disability Insurance Scheme. Medication prices can reduce due to a variety of factors (for example, Price Disclosure, statutory price reductions due to patent changes or legislation mandated by the Government to reduce the PBS listed price of drugs). Refer to the Mental health-related prescriptions section and PBS website for more information. Technical information regarding the calculation of these figures can be found in the data source section.

The National Mental Health Commission’s 2014 Review of Mental Health Programmes and Services (NMHC 2014) used a broad methodology to estimate Australian Government expenditure on mental health. The methodology included mental health-related costs, such as the Disability Support Pension and Carer Payment and Carer Allowance. The Australian Government mental health-related expenditure in 2012–13 was estimated to be $9.6 billion, compared to $2.8 billion using the methodology employed in this publication, as outlined in the data source section. More recently, the Productivity Commission’s Inquiry into Mental Health examined the costs to governments, individuals and insurers of mental healthcare and related services, including broader services such as housing, employment, and education as well as expenditure on treatment, research, and promotion and prevention. The Productivity Commission estimated this cost in 2018–19 was $16 billion (noting this includes only the estimated costs for mental health care and related services) (Productivity Commission 2020), compared to almost $11.6 billion in this report.

National Mental Health Establishments Database

Collection of data for the Mental Health Establishments (MHE) National Minimum Data Set (NMDS) began on 1 July 2005, replacing the Community Mental Health Establishments NMDS and the National Survey of Mental Health Services. The main aim of the development of the MHE NMDS was to expand on the Community Mental Health Establishments NMDS and replicate the data previously collected by the National Survey of Mental Health Services. The National Mental Health Establishments Database is compiled as specified by the MHE NMDS.

Data Quality Statements for National Minimum Data Sets (NMDSs) are published annually on the Metadata Online Registry (METEOR). Statements provide information on the institutional environment, timelines, accessibility, interpretability, relevance, accuracy and coherence. Refer to the Mental Health Establishments NMDS 2020–21: National Mental Health Establishments Database, 2023; Quality Statement.

Data validation

Data presented in this publication are the most current data for all years presented. The validation process scrutinises the data for consistency in the current collection and across historical data. The validation process applies rules to the data to test for potential issues. Jurisdictional representatives respond to each issue before the data are accepted as the most reliable current data collection. This process may highlight issues with historical data. In such cases, historical data may be adjusted to ensure data are more consistent. Therefore, comparisons made to previous versions of Mental health services in Australia publications should be approached with caution.

New South Wales CADE and T–BASIS services

All New South Wales Confused and Disturbed Elderly (CADE) 24-hour staffed residential mental health services were reclassified as specialised mental health non-acute admitted patient hospital services, termed Transitional Behavioural Assessment and Intervention Service (T-BASIS), from 1 July 2007. All data relating to these services have been reclassified from 2007–08 onwards, including number of services, number of beds, staffing and expenditure. Comparison of data over time should therefore be approached with caution.

New South Wales HASI Program

New South Wales has been developing the Housing Accommodation Support Initiative (HASI) since it was established in 2002. This model of care is a partnership program between NSW Ministry of Health, Housing NSW and the non-government organisation (NGO) sector that provides housing linked to clinical and psychosocial rehabilitation services for people with a range of levels of psychiatric disability.

More recently, in 2016 Community Living Supports (CLS) commenced to support more people with severe mental illness to access the same type of support provided in HASI.

Both HASI and CLS are reported as Specialised mental health service – supported mental health housing places. These programs are out of scope as Residential mental health care services.

Rate calculations

Calculations of rates for target populations are based on age-specific populations as defined by the MHE NMDS metadata and outlined below:

• General services: persons aged 18–64,
• Child and adolescent services: persons aged 0–17,
• Youth services: persons aged 16–24,
• Older persons: persons aged 65 and over, and
• Forensic services: persons aged 18 and over.

As the ages included in the target population groups overlap, the rates for the target populations cannot be summed to generate the total rate.

Crude rates were calculated using the Australian Bureau of Statistics (ABS) estimated resident population (ERP) at the midpoint of the data range (for example, rates for 2020–21 data were calculated using ERP at 31 December 2020). Historical rates have been recalculated using revised ERPs, as detailed in the online technical information.

Private Health Establishments Collection

From 1992–93 to 2016–17 (excluding 2007–08) the ABS conducted a census of all private hospitals licensed by state and territory health authorities and all freestanding day hospitals facilities approved by the Department of Health and Aged Care. As part of that census, data on the staffing, finances and activity of these establishments were collected and compiled in the Private Health Establishments Collection (PHEC). Additional information on the PHEC can be obtained from the ABS publication Private hospitals, Australia (ABS 2018).

Private Psychiatric Hospitals Data Reporting and Analysis Service

The Australian Private Hospitals Association (APHA) Private Psychiatric Hospitals Data Reporting and Analysis Service (PPHDRAS), previously known as the Private Mental Health Alliance Centralised Data Management Service (PMHA CDMS), was launched in Australia in 2001 to support private hospitals with psychiatric beds to routinely collect and report on a nationally agreed suite of clinical measures and related data for the purposes of monitoring, evaluating and improving the quality of and effectiveness of care. The PPHDRAS works closely with private hospitals, health insurers and other funders (e.g. Department of Veterans’ Affairs) to provide a detailed quarterly statistical reporting service on participating hospitals’ service provision and patient outcomes.

Australian Government expenditure on mental health-related services

The Australian Government Department of Health and Aged Care annually compiles the total Australian Government expenditure on mental health-related services. This practice was initiated in 1992–93 for publication in the National Mental Health Report which continued through to 2013 as the final publication year, and subsequently incorporated in related reports. Estimated expenditure reported in table EXP.31 of this report covers only those areas of expenditure that have a clear and identifiable mental health purpose. A range of other expenditure, which may be either directly or indirectly related to the provision of support for people affected by mental illness, is not covered in this table. Broadly, this covers:

• programs and services principally targeted at providing assessment, treatment, support or other assistance to people affected by mental ill health,
• population-level programs that have as their primary aim the prevention of mental illness or the improvement of mental health and well-being, and
• research with a mental health focus.

Expenditure that can be directly linked to mental health service provision, but not counted in the spending estimates includes:

• An estimated mental health share of Australian Government payments made to states for the running of public hospitals provided through the non-specific 'base grants' provided to states and territories under the former:
  • Medicare Agreements (1993–98),
  • Australian Health Care Agreements (1998–03, 2003–09), and
  • National Healthcare Agreements (2009–2012).

Mental health-specific payments to states and territories

For years up to 2008–09, this category covers specific payments made to states and territories by the Australian Government for mental health reform under the Medicare Agreements 1993–98, and Australian Health Care Agreements 1998–2003 and 2008–09. From July 2009, the Australian Government provided funding through Specific Purpose Payments (SPP) to state and territory governments under the National Healthcare Agreement (NHA) that do not specify the amount to be spent on mental health or any other health area. Therefore, specific mental health funding cannot be identified under the NHA.

From 2008–09 onwards, the amounts include:

• National Partnership Agreement—National Perinatal Depression Plan—Payments to States, ending 30 June 2015;
• National Partnership Agreement—Supporting Mental Health Reform, commencing 2011–12; and
• National Partnership Agreement—Improving Health Services in Tasmania (Innovative flexible funding for mental health), commencing 2012–13.

Nil payments are shown from 2016–17 as all three National Partnerships were completed by 2015–16.

For 2020–21 the amounts shown include:

• Project Agreement for Suicide Prevention;
• Project Agreements for the Community Health and Hospitals Program initiatives for Eating Disorder Treatment Centres in New South Wales, Victoria, South Australia and Tasmania, and Youth Mental Health and Suicide Prevention in the Australian Capital Territory;
• Project Agreement for Grace’s Place in New South Wales; and
• Project Agreement for the South Australian Adult Mental Health Centre.

The expenditure reported here excludes payments to states and territories for the development of subacute mental health beds made under Schedule E of the National Partnership Agreement - Improving Public Hospital Services, which totalled $175 million over the period 2010–11 to 2013–14. Mental-health specific payments cannot be separately identified from payments for other categories of subacute beds made to states and territories.

The data under this item do not include Department of Veterans’ Affairs payments to states and territories for public hospital mental health services delivered to veterans and other eligible recipients. These costs are included under the item ‘National programs and initiatives (DVA managed)’.

National program and initiatives (Department of Health and Aged Care managed)

Initiatives funded through national mental health reform funding provided under special appropriations linked to the Australian Health Care Agreements (excluding amounts reported against Mental health specific payments to states and territories above).

• For years up to 2005–06, this covers the following categories of Australian Government spending:

• National Mental Health Program,
• National Depression Initiative (beyondblue),
• More Options Better Outcomes (ATAPS),
• Kids Helpline — one off grant 2003–04,
• Youth mental health (headspace),
• Program of Assistance for Survivors of Torture and Trauma,
• OATSIH Social & Emotional Wellbeing Action Plan; and
• Departmental costs.

• From 2006–07 onwards, programs include the above plus new Department of Health and Aged Care-administered measures funded by the Australian Government under the COAG Action Plan on Mental Health 2006 (excluding MBS expenditure through Better Access) and additional measures introduced in subsequent Federal Budgets. Programs added to the category are:

• Alerting the Community to Links between Illicit Drugs and Mental Illness,
• New Early Intervention Services for Parents, Children and Young People,
• Better Access to Psychiatrists, Psychologists, GPs - Education and Training component,
• New Funding For Mental Health Nurses (Mental Health Nurse incentive program),
• Support for Day to Day Living program,
• Mental Health Services in Rural and Remote Areas,
• Improved Services for People with Drug and Alcohol Problems and Mental Illness,
• Funding for Telephone Counselling, Self-help and Web based Support Programmes,
• Mental Health Support for Drought Affected Communities Initiative,
• Additional Education Places, Scholarships and Clinical Training in Mental Health - Scholarships and Clinical Training components only,
• Mental Health in Tertiary Curricula,
• National Perinatal Depression initiative (excluding mental health specific payments to states and territories included above),
• Expansion of Early Psychosis Prevention and Intervention Centres,
• Partners In Recovery Program, and
• Leadership in Mental Health Reform.

Some of these programs were time limited and do not apply to all data presented in this section.

National program and initiatives (DSS managed)

Spending on Department of Social Services (DSS) managed programs commenced with three measures introduced in 2006–07 through the COAG Action Plan on Mental Health (Personal Helpers and Mentors, Mental Health Respite, Family Mental Health Support Services). Subsequently several additional new measures have been added from Federal Budgets that are managed through the DSS portfolio and are included in expenditure reporting (‘A Better Life’, ‘Carers and Work’, and ‘Individual Placement and Support Trial’). DSS has advised that, from 2016–17, two programs (Personal Helpers and Mentors, Mental Health Respite Care) began transitioning to the NDIS and, expenditure reported for these programs is inclusive of funding transferred to the NDIS.

From 2020–21, most funding transferred from DSS to the National Disability Insurance Agency for clients that transitioned to the NDIS. The Carers and Work pilot program ceased in June 2019.

National programs and initiatives (DVA managed)

Reported spending by the Department of Veterans’ Affairs (DVA) includes Repatriation Pharmaceutical Benefits Scheme expenditure, Repatriation Medical Benefits expenditure on general practitioners, psychiatrists and allied health providing mental health care, payment for mental health care provided in public and private hospitals for veterans, grants to Phoenix Australia and expenditure on OpenArms and related mental health programs. Note that estimated expenditure on mental health-related Pharmaceuticals includes the costs of anti-dementia drugs for years up to and including to 2009–10 but these have been removed for subsequent years.

DVA provided the following information in respect of its mental health related expenditure in 2020–21.

Data Source EXP.1: Department of Veterans’ Affairs mental health expenditure, 2020–21

	2020–21 ($M) (a)
Private hospitals(b)(c)(d)	63.3
Public hospitals(b)	39.2
Consultant psychiatrists	27.7
OpenArms (previously Veterans and Veterans’ Families Counselling Service)	90.8
Pharmaceuticals(e)	17.3
Private psychologists and allied health	28.9
General practitioners	19.6
Phoenix Australia (previously Australian Centre for Posttraumatic Mental Health)	1.7
Veterans' mental health care – improving access for younger veterans	-
Other programs	-
Total	288.6

(a) Expenditure is indicative as not all data sets are fully complete. Small variations may be expected over time.
(b) Based only on payments made for patients classified to Major Diagnostic Category (MDC) 19 (Mental Diseases and Disorders) under the Australian Refined Diagnosis Related Groups (AR-DRG) classification system. Excludes payments made for patients classified to MDC 20 (Alcohol/drug use and alcohol/drug induced organic mental disorders).
(c) Private hospital figure includes payments to the hospital only (i.e. any other payments during these episodes such as payments to doctors have been excluded).
(d) DVA depends on submitted Hospital Casemix Protocol data from private hospitals and Diagnostic Procedure Combinations to obtain correct MDC and diagnosis information. When this information is not available (e.g. provided by hospitals on a quarterly basis and most recent quarter’s data not yet received) then an understatement can occur in reporting. For this report, and only in relation to private psychiatric facilities, billing item codes have been used to identify and include mental health data in this category.
(e) Excludes anti-dementia drugs.

National Mental Health Commission

The NMHC commenced operation in January 2012. Source data for 2020–21: NMHC Annual Report 2020–21.

Department of Defence-funded programs

Spending by the Department of Defence covers a range of mental health programs and services delivered to Australian Defence Force (ADF) personnel, as of 2009–10 onwards; data for prior years is unavailable. Increased expenditure over the period reflects, in part, increased accuracy of data capture. Details of the ADF Mental Health Strategy are available at Defence's website.

The Department provided the following information in respect of its mental health related expenditure in 2020–21.

Data Source EXP.2: Department of Defence mental health expenditure, 2020–21

	2020-21 ($M)
JHC Direct Mental Health Program and Implementation Costs	1.1
Mental Health Personnel Costs	7.7
FFS Garrison Psychology Services	16.0
FFS Garrison Psychiatrist Services	8.6
Mental Health Treatment Programs	11.7
Contracted General Practitioner Costs [a]	7.9
Contracted Mental Health Professionals	11.5
MIMS Dispensed Therapeutic Classification Drugs	0.6
Total	65.0

(a) Represents the methodology whereby 10% of a Contracted General Practitioners consultations relate to mental health.

National Suicide Prevention Program

This program commenced in 1995–96 as the National Youth Suicide Prevention Strategy but was broadened in later years. Reported expenditure includes all Australian Government allocations made under the national program, including additional funding made available under the COAG Action Plan and subsequent Federal Budgets. Changes in administrative arrangements and financial reporting make the estimates from 2015–16 not directly comparable to previous years. Components of the National Suicide Prevention Program are based on estimated expenditure to as closely as possible match the former methodology.

Indigenous social and emotional wellbeing programs

This expenditure refers to two programs:

• The OATSIH Social & Emotional Wellbeing Action Plan program that commenced in 1996–97 following the Bringing Them Home report on the stolen generation of Indigenous children. Up to 2012–13 this program was managed by the Australian Government Department of Health and Aged Care and rolled into the reporting category ‘National program and initiatives (Department of Health and Aged Care managed)’. As part of a realignment of responsibility for Indigenous affairs, the program was transferred to the Department of the Prime Minister and Cabinet in 2013–14. Social and emotional wellbeing services and activities receive funding through the Indigenous Advancement Strategy Safety and Wellbeing Programme, administered by the National Australians Indigenous Agency.
• The measure titled ‘Improving the Capacity of Health Workers in Indigenous Communities’ funded under the COAG Action Plan in 2006–07. This measure ceased in 2010–11.

In previous years’ reporting, expenditure on these programmes was included under ‘National program and initiatives (Department of Health and Aged Care managed) ‘. From 2013–14, relevant expenditure is now reported separately, with appropriate adjustments to previous years.

From 2018–19, figures include expenditure for Indigenous Suicide Services, Indigenous Mental Health First Aid, Workforce Development Support Units and Indigenous Youth Connection to Culture.

Medicare Benefits Schedule–psychiatrists

Reported expenditure refers to benefits paid for all services by consultant psychiatrists processed in each of the index years. Data exclude payments made by the Department of Veterans’ Affairs under the Repatriation Medical Benefits Schedule which are reported in the item National programs and initiatives (DVA managed).

Medicare Benefits Schedule–general practitioners

Reported expenditure includes data for the Medicare-subsidised Better Access to Psychiatrists and Psychologists through the MBS initiative described above and in the Medicare-subsidised specialised mental health-specific services section. Expenditure on GP mental health care is based solely on benefits paid against MBS mental health specific GP items, which are predominantly the Better Access GP mental health items plus a small number of other items that were created in the years preceding the introduction of the Better Access initiative. This estimate of mental health-related GP costs is conservative because it does not attempt to assign a cost to the range of GP mental health work that is not billed as a specific mental health item.

Medicare Benefits Schedule–psychologists/allied health

Spending refers to MBS benefits paid for services provided by clinical psychologists, psychologists, social workers and occupational therapists approved by Medicare, for items introduced through the Better Access to Mental Health Care initiative on 1 November 2006. Note that these items commenced 1 November 2006 and were not available for the full 2006–07 period. In 2004, a small number of allied health programs that were introduced under the Enhanced Primary Care program were also included but represent less than 1% of the overall spending reported (DoHA 2010).

Pharmaceutical Benefits Scheme

Refers to all Australian Government benefits for psychiatric medication in each of the index years, defined as drugs included in the following classes of the Anatomical Therapeutic Chemical Drug Classification System: antipsychotics; anxiolytics; hypnotics and sedatives; psychostimulants; and antidepressants. In addition, payments include Clozapine dispensed in public hospitals under the Highly Specialised Drug program and funded separately through special arrangements prior to December 2013. The amounts reported exclude payments made by the Department of Veterans’ Affairs under the Repatriation Pharmaceutical Benefits Schedule which are included in the item National programs and initiatives (DVA managed).

Private Health Insurance Premium Rebates

Estimates of the ‘mental health share’ of Australian Government Private Health Insurance Rebates are derived from a combination of sources and based on the assumption that a proportion of Australian Government outlays designed to increase public take up of private health insurance have subsidised private psychiatric care in hospitals and other services paid by private health insurers. For illustrative purposes, the methodology underpinning these estimates is described below, sourced from Appendix 11 of the National Mental Health Report 2010 (DoHA 2010).

The combined Australian Government outlays under the two schemes, and the estimated amounts spent on private hospital care for 2020–21 are as follows (current prices):

Data Source EXP.3: Estimated amounts spent on private hospital care, 2020–21

	2020–21 ($M)
(A) Total Australian Government outlays on private health insurance subsidies	6,234
(B) Estimated component of Australian Government private health insurance subsidies spent on hospital care	3,443

Source: AIHW 2022.

Estimation of the ‘mental health share’ of the amounts shown at (B) is based on the proportion of total private hospital revenue accounted for by psychiatric care. This assumes that if psychiatric care provided by the private hospital sector accounts for x% of revenue, then x% of the component of the Australian Government private health insurance subsidies spent by health insurance funds in paying for private hospital care is directed to psychiatric care.

A new element introduced from 2015–16 includes an estimate of the PHI Premium Rebates contribution to ancillary benefits paid by private health insurers for private psychologists. All years have been adjusted to include this component.

The previous method for estimating the private hospital activity and revenue relied on data provided by the Australian Bureau of Statistics through its Private Health Establishment Collection (PHEC) which was discontinued in 2016–17. Commencing 2017–18, the estimate is based on the Private Psychiatric Hospitals Data Reporting and Analysis Service (PPHDRAS), a collection jointly funded by the Australian Private Hospitals Association and the Australian Government Department of Health and Aged Care, complemented by data from the Department's Private Hospital Data Bureau.

Data Source EXP.4: Estimated mental health share of amounts spent on private hospital care, 2020–21

	2020–21 ($M)
Estimated component of Australian Government private health insurance subsidies spent on hospital care	3,443
Per cent of total private hospital revenue earned through the provision of psychiatric care	5%
Estimated ‘mental health share’ of Australian Government private health insurance subsidies spent on hospital care	157.1

Research

Research expenditure represents the value of mental health related grants administered by the National Health and Medical Research Council (NHMRC) or the Department of Health and Aged Care through the Medical Research Future Fund during the relevant year. Data were provided by the NHMRC and the Department of Health and Aged Care. Minor amendments have been made to years preceding 2017–18, with adjustments made to 2017–18 to 2019–20 figures to include Medical Research Future Fund expenditure, which commenced in 2017–18.

Medicare Benefits Schedule data

Refer to the data source section of the Medicare services section for more information.

Pharmaceutical Benefits Scheme and Repatriation Pharmaceutical Benefits Scheme data

Refer to the data source section of the Mental health-related prescriptions section for more information.

Population data

Population estimates used to calculate population rates were sourced from the Australian Bureau of Statistics.

ABS (Australian Bureau of Statistics) 2018. Private hospitals, Australia, 2016–17. ABS cat. no. 4390.0. Canberra: ABS.

AIHW (Australian Institute of Health and Welfare) 2015. National Health Data Dictionary version 16.2. Cat. no. HWI 131. Canberra: AIHW.

AIHW 2022. Health expenditure Australia 2020–21. Cat. no. HWE 89. Canberra: AIHW.

Department of Defence 2021. Defence Annual Report 2020–21. Canberra: Department of Defence.

DoH (Department of Health) 2013. National mental health report: tracking progress of mental health reform in Australia, 1993–2011. 1: Commonwealth of Australia.

DoHA (Department of Health and Ageing) 2010. National mental health report 2010: summary of 15 years of reform in Australia’s mental health services under the National Mental Health Strategy 1993–2008. Canberra: Commonwealth of Australia.

SA (Services Australia) 2019. Department of Human Services annual report 2020–21. Canberra: Department of Human Services.

NMHC (National Mental Health Commission) 2014. The national review of mental health programmes and services. Sydney: NMHC.

PPHDRAS (Private Hospital–based Psychiatric Services 2022. Private Hospital-based Psychiatric Services 1 July 2019 to 30 June 2020. Viewed November 2021.

Productivity Commission 2020. Mental Health, Report no. 95, Canberra.