Health & welfare expenditure

admitted patient: A patient who undergoes a hospital’s admission process to receive treatment and/or care. This treatment and/or care are provided over time and can occur in hospital and/or in the person’s home (for hospital in the home patients).

aids and appliances: Durable medical goods dispensed to ambulatory patients that are used more than once for therapeutic purposes, such as glasses, hearing aids, wheelchairs and orthopaedic appliances, and prostheses fitted externally (rather than implanted surgically). Excludes prostheses fitted as part of admitted patient care in a hospital.

Australian Government health expenditure: Total expenditure that the Australian Government actually incurs on its own health programs. It does not include the funding provided by the Australian Government to the states and territories by way of grants under section 96 of the Constitution.

average annual growth rate: To calculate the average annual growth rate in health expenditure between two years, Y1 and Y2, with N years between the two time periods, the following formula applies:
($ million in Y2/$ million in Y1)^(1/N)–1)*100.

benefit-paid pharmaceuticals: Pharmaceuticals listed in the schedule of the PBS and the Repatriation PBS for which pharmaceutical benefits have been paid or are payable. Does not include listed pharmaceutical items where the full cost is met from the patient copayment under the PBS or Repatriation PBS.

capital consumption: The amount of fixed capital used up each year—sometimes referred to as depreciation.

capital expenditure: Expenditure on large-scale fixed assets (for example, new buildings and equipment with a useful life extending over a number of years). The term is used in this report to refer to what the ABS calls gross fixed capital formation (see also capital formation).

capital formation: Gross fixed capital formation is the value of acquisitions less disposals of new or existing fixed assets. Assets consist of tangible or intangible assets that have come into existence as outputs from processes of production, and that are themselves used repeatedly or continuously in other processes of production over periods of time longer than 1 year.  (See also capital expenditure).

chain price index: An annually re-weighted index providing a close approximation to measures of pure price change.

community health services: Non-residential health services that establishments offer to patients/clients in an integrated and coordinated manner in a community setting, or the coordination of health services elsewhere in the community.

Including, for example:

• well baby clinics
• health services provided to particular groups, such as Aboriginal and Torres Strait Islander people, women, youth and migrants, as well as family planning services, community mental health and alcohol and drug treatment services
• specialised mental health programs delivered in a community setting.

constant prices: Constant price expenditure adjusts current prices for the effects of inflation—that is, it aims to remove the effects of inflation. Constant price estimates for expenditure aggregates have been derived using either annually re‑weighted chain price indexes or IPDs. The estimates indicate what expenditure would have been had the reference year prices applied in all years. As a result, expenditures in different years can be compared dollar for dollar, using this as a measure of changes in the volume of health goods and services (see also real expenditure).

copayment: A payment made by an individual who has health insurance, usually at the time a health service is received, to offset some of the cost of care.

current prices: Refers to expenditures reported for a particular year, unadjusted for inflation. Changes in current price expenditures reflect changes in both price and volume.

dental services: Services that registered dental practitioners provide. These include oral and maxillofacial surgery items, orthodontic, pedodontic and periodontic services, cleft lip and palate services, dental assessment, and other dental items listed in the MBS. The term covers dental services funded by health funds, state and territory governments and also individuals’ out-of-pocket payments.

excess health inflation: The difference when the health inflation rate exceeds the general inflation rate—that is, the rise in the price of goods and services in the health-care sector exceeds the rise in the price of goods and services in the economy as a whole.

general inflation: The rise in the general price level of goods and services in the economy.

government finance statistics: Provides details of revenues, expenses, cash flows, assets and liabilities of the Australian public sector, and comprises units that are owned and/or controlled by the Australian Government, state and territory governments and local governments. 

gross domestic product (GDP): Commonly used to indicate national income—the total market value of goods and services produced within a given period after deducting the cost of goods and services used up in the process of production, but before deducting allowances for depreciation.

gross national expenditure (GNE): An alternative measure to GDP; GNE is equal to GDP minus export income, but including imports.

health administration: Activities related to the formulation and administration of government and non-government health policy, and in the setting and enforcement of standards for health personnel and health services. One activity, for example, is the regulation and licensing of providers of health services.

The term includes only those administrative services that cannot be allocated to a particular health good or service. Such services might include, for example, maintaining an office for the chief medical officer, a departmental liaison officer in the office of the minister, or other agency-wide items for which it is not possible to derive appropriate or meaningful allocations to particular health programs.

health inflation: The rise in the price level of goods and services in the health sector.

health research: Research done at tertiary institutions, in private non-profit organisations, and in government facilities that has a health socioeconomic objective.

It excludes commercially oriented research that private business funds, the costs of which are assumed to be included in the prices charged for the goods and services (for example, medications that have been developed and/or supported by research activities).

hospital services: Services provided to a patient who is receiving admitted patient services or non-admitted patient services in a hospital, but excluding non-admitted dental services, community health services, patient transport services, public health activities and health research done within the hospital. They can include services provided off-site, such as dialysis or hospital in the home.

household final consumption expenditure (HFCE): Net expenditure on goods and services by households and by private non-profit institutions serving households.

implicit price deflator (IPD): An index obtained using the ratio of current price expenditure to constant price expenditure.

individuals’ out-of-pocket funding: Payments by individuals where they meet the full cost of a good or service, or where they share the cost of goods and services with third-party payers, such as private health insurance funds or the Australian Government.

injury compensation insurers: Workers compensation and compulsory third-party motor vehicle insurers.

local government: A public sector unit where the political authority underlying its function is limited to a local government area or other region within a state or territory, or where its functions involve policies that are primarily of concern at the local level.

medical expenses tax rebate: An Australian Government subsidy to assist with the cost of medical expenses. It applies to a wide variety of health expenditures, not just expenses associated with doctors. This rebate is now income tested and is currently being phased out.

medical services expenditure: Includes services provided by, or on behalf of the following parties: registered medical practitioners who are funded by the MBS, DVA, compulsory third-party motor vehicle insurance, workers compensation insurance, private health insurance funds, Australian Government premium rebates allocated to medical services, Medicare copayments, and other out-of-pocket payments.

Most medical services in Australia are provided on a fee-for-service basis and attract benefits from the Australian Government under Medicare. These include both private in-hospital medical services and out-of-hospital medical services.

This term includes medical services not from the MBS, such as vaccines for overseas travel, as well as some expenditure by the Australian Government under alternative funding arrangements.

It excludes medical services provided to public patients admitted to public hospitals and medical services provided to public patients at outpatient clinics in public hospitals.

medications: Benefit-paid pharmaceuticals and other medications.

other health practitioner services: Services that health practitioners (other than doctors and dentists) provide. These include, but are not limited to practice nurses, chiropractors, optometrists, physiotherapists, occupational therapists, speech therapists, audiologists, dieticians, podiatrists, homeopaths, naturopaths, practitioners of Chinese medicine and other forms of traditional medicine.

other medications: Pharmaceuticals for which no PBS or Repatriation PBS benefit was paid. They include:

• pharmaceuticals listed in the PBS or Repatriation PBS, the total costs of which are equal to, or less than, the statutory patient contribution for the class of patient (under copayment pharmaceuticals)
• pharmaceuticals dispensed through private prescriptions that do not fulfil the criteria for payment of benefit under the PBS
• Repatriation PBS over-the-counter medicines, including pharmacy-only medicines, aspirin, cough and cold medicines, vitamins and minerals, herbal and other complementary medicines, and various medical non-durables, such as condoms, adhesive and non-adhesive bandages.

over-the-counter medicines: Medicinal preparations that are primarily bought from pharmacies and supermarkets, that are not prescription medicines.

patient transport services: Expenditure by organisations primarily engaged in providing transportation of patients by ground or air, along with health (or medical) care. These services are often provided during a medical emergency, but are not restricted to emergencies. The vehicles are equipped with lifesaving equipment operated by medically trained personnel. Patient transport services include public ambulance services or flying doctor services, such as Royal Flying Doctor Service and Care Flight. Also includes patient transport programs, such as patient transport vouchers or support programs to assist isolated patients with travel to obtain specialised health care. From 2003–04 onwards, this category includes patient transport expenses that are included in the operating costs of public hospitals.

Pharmaceutical Benefits Scheme (PBS): A national, government-funded scheme that subsidises the cost of a wide variety of pharmaceutical drugs, and that covers all Australians to help them afford standard medications. The PBS lists all the medicinal products available under the PBS and explains the uses for which they can be subsidised (see Repatriation Pharmaceutical Benefits Scheme).

primary health care: Primary health-care expenditure includes recurrent expenditure on health goods and services, such as medical services, dental services, other health practitioner services, pharmaceuticals and community and public health services. Primary health-care services are delivered in many settings, such as general practices, community health centres, Aboriginal health services and allied health practices (for example, physiotherapy, dietetic and chiropractic practices, and tele-health) and come under numerous funding arrangements.

private hospital: A privately owned and operated institution, catering for patients who are treated by a doctor of their own choice. Patients are charged fees for accommodation and other services provided by the hospital and relevant medical and paramedical practitioners. Acute care and psychiatric hospitals are included, as are private free-standing day hospital facilities (see public hospital). Private hospital expenditure includes expenditures incurred by a private hospital in providing contracted and/or ad hoc treatments for public patients.

private patient: Person admitted to a private hospital, or person admitted to a public hospital who decides to choose the doctor(s) who will treat them or to have private ward accommodation. This means they will be charged for medical services, food and accommodation.

public health activities: The core types of activities done or funded by the key jurisdictional health departments that deal with issues related to populations, rather than individuals. These activities comprise: •       communicable disease control

• selected health promotion
• organised immunisation
• environmental health
• food standards and hygiene
• cancer screening
• prevention of hazardous and harmful drug use
• public health research.

These activities do not include treatment services.

public health services: Services provided and/or funded by governments that are aimed at protecting and promoting the health of the whole population or specified population subgroups, and/or preventing illness or injury in the whole population or specified population subgroups.

Public health services until 2008–09 also include departmental costs for the following Commonwealth regulators: the Therapeutic Goods Administration, the Office of Gene Technology Regulator, and the National Industrial Chemicals Notification and Assessment Scheme. These are now reported as administration expenses.

public hospital: A hospital controlled by a state or territory health authority. In Australia public hospitals offer free diagnostic services, treatment, care and accommodation to all Australians who need them. Public hospitals include some denominational hospitals that are privately owned. Defence force hospitals are not included in the scope of public hospitals (see private hospital).

public hospital services: The balance of public hospital expenditure remaining, after community health services, public health services, non-admitted dental services, patient transport services, and health research activities done by public hospitals have been removed and reallocated to their own expenditure categories.

public patient: A patient admitted to a public hospital who has agreed to be treated by doctors of the hospital's choice and to accept shared ward accommodation. This means that the patient is not charged.

real expenditure: Expenditure that has been adjusted to remove the effects of inflation (that is, expenditure for all years has been compiled using the reference year prices). Removing the effects of inflation enables comparisons to be made between expenditures in different years on an equal dollar‑for‑dollar basis. Changes in real expenditure measure the change in the volume of goods and services produced (see constant prices).

rebates of health insurance premiums: Introduced in January 1999, a non‑income‑tested rebate on private health insurance premiums replaced the Private Health Insurance Incentives Scheme subsidy. From 1 July 2012, the private health insurance rebate became income tested. From 1 April 2014, all rebate percentages are adjusted annually by a rebate adjustment factor.

There are two mechanisms for rebates of health insurance premiums:

• The first is where the rebate is taken as a reduced premium payable by the individual with private health cover (with the health fund claiming reimbursement from the Australian Government).
• The second is taken as an income tax rebate, where individuals with private health cover elect to claim the rebate through the tax system at the end of the financial year, having paid the health funds 100% of their premiums up front.

recurrent expenditure: Expenditure for which organisations are liable on a recurring basis, for the provision of health goods and services, which does not result in creating or acquiring fixed assets (new or second-hand). It consists mainly of expenditure on wages, salaries and supplements, purchases of goods and services, and depreciation. This excludes capital expenditure. For all years, recurrent expenditure includes capital consumption (depreciation).

referred medical services: Non-hospital medical services that are not classified as primary health care (see unreferred medical services).

Repatriation Pharmaceutical Benefits Scheme (Repatriation PBS): Provides assistance to eligible veterans (with recognised war- or service-related disabilities) and their dependants for pharmaceuticals listed on the PBS and a supplementary repatriation list, at the same cost as patients entitled to the concessional payment under the PBS (see Pharmaceutical Benefits Scheme).

specific purpose payments (SPPs): Australian Government payments to the states and territories under the provisions of section 96 of the Constitution, used for purposes specified in agreements between the Australian Government and individual state and territory governments. Some are conditional on states and territories incurring a specified level or proportion of expenditure from their own resources. The SPP associated with the National Healthcare Agreement, implemented from 1 July 2009, provides payments to state and territory governments that are to be spent only within the sector described—for example, within the health sector. In addition, there are NPPs under national partnership agreements that are aimed at specific areas of health expenditure.

state and territory dental services: School dental programs, community dental services and hospital dental programs that state and territory health authorities fund.

total health expenditure: Comprises recurrent expenditure, capital expenditure and medical expenses tax rebate.

total health price index: The ratio of total national health expenditure at current prices, to total national health expenditure at constant prices.

unreferred medical services: A medical service provided to a person by, or under the supervision of, a medical practitioner, being a service that has not been referred to that practitioner by another medical practitioner or person with referring rights. In this report, these are medical services that are classified as primary health care (see referred medical services).