Health and aged care expenditure on dementia

Key statistics 

Australia’s response to dementia requires economic investment across the health, aged care and welfare sectors. This investment includes expenditure associated with: diagnosis, treatment and care of people with dementia (including supporting a workforce of trained professionals); and support services for people with dementia and their informal carers.

The following pages present direct expenditure estimates for caring for people with dementia across the health and aged care sectors in 2018–19. It includes the estimated expenditure on:

Refer to the Expenditure data tables for the underlying data presented in these pages. 

The year 2018–19 is presented as this is the latest year of data available from the AIHW Disease Expenditure Database. In this report we focus on presenting health and aged care expenditure estimates that are directly attributable to dementia (rather than all costs for people with dementia), to avoid including expenditure related to other conditions. Our estimates have been adjusted to reflect the contribution of comorbidities to the costs for treatment and care of people with dementia and do not include estimates of indirect expenditure such as costs arising from the social and economic burden on carers and family, or from lost wages and productivity. More information on the methodology and data sources used to estimate expenditure directly attributable to dementia can be found by expanding the box Information sources and coverage of dementia expenditure estimates.

Total estimated expenditure on dementia

It is estimated that almost $3.0 billion of the total direct health and aged care system expenditure in 2018–19 was directly attributable to the diagnosis, treatment and care of people with dementia.

The health and aged care system expenditure directly attributable to dementia was mainly for:

  • residential aged care services—$1.7 billion, or 56% of the total direct health and aged care system expenditure for dementia
  • community based aged care services—just under $596 million, or 20%
    • Home Care Packages, Commonwealth Home Support Programme (excluding respite care), Veterans’ Home Care Program and DVA Community Nursing program
  • hospital services—almost $383 million, or 13%
    • public and private admitted patient hospital care, public hospital outpatient clinics and public hospital emergency department care
  • community-based and residential respite care—$133 million, or 4.4%
  • out-of-hospital medical services—$99.2 million, or 3.3%
  • dementia support programs and initiatives—$50.6 million, or 1.7% (Figure 14.1).

Figure 14.1: Health and aged care system expenditure attributable to dementia in 2018–19: (a) percentage by broad area and (b) expenditure by service area

Figure 14.1 is two bar graphs that show the distribution of Australian Government expenditure that was directly attributable to dementia in 2018–19. The first bar graph shows the distribution of dementia expenditure between broad service areas. It shows that the majority of spending was on residential aged care services, with most of the remainder consisting of community based aged care services and hospital services. The second graph shows the distribution of dementia expenditure by service area sub-categories. The majority of expenditure was on residential aged care services, followed by the Home Care Packages Program and public and private admitted patient care

The health and aged care expenditure estimates above reflect costs that are thought to be directly attributable to dementia and therefore they do not include expenditure related to other conditions. However, it is important to recognise that many people have co-existing conditions, some of which may be directly associated with dementia. In addition, dementia is often the main reason for people using certain health and aged care services, particularly residential aged care. For example, the estimated costs of care related to managing co-existing conditions in people with dementia who are living in residential aged care totals $6.8 billion. If these costs were included, the total direct health and aged care system expenditure for people with dementia (rather than directly attributable to dementia) would be $9.8 billion.