Expenditure on out-of-hospital services

In 2018–19, over $99 million was estimated to have been spent on out-of-hospital services for dementia, such as GP and specialist services, allied health services, pharmaceuticals, and tests involved in the diagnosis and management of dementia. The expenditure on out-of-hospital services is equivalent to 21% of the total direct health expenditure on dementia and 3.3% of the total health and aged care expenditure on dementia. These estimates are for services where dementia was directly managed and do not include services for patients with dementia where management and treatment related only to their other co-existing health conditions.

Services contributing to the out-of-hospital medical expenditure for dementia were (Figure 14.9):

  • general practice services – almost $30 million, or 30% of the out-of-hospital medical expenditure for dementia
  • pharmaceuticals dispensed under the Pharmaceutical Benefits Scheme (PBS) – $23 million, or 23%
    • This includes dementia specific medicines and a range of other medications prescribed for the management of dementia symptoms.
  • diagnostic imaging – $18 million, or 19%
  •  specialist services – over $15 million, or 15%

Almost two-thirds (64% or almost $64 million) of the out-of-hospital expenditure was for females with dementia. For each out-of-hospital area, females comprised a much greater proportion of the expenditure than males, largely due to the greater number of females with dementia than males.

Figure 14.9: Expenditure on out-of-hospital medical services for dementia by sex in 2018–19

Figure 14.9 is a bar graph that shows expenditure on out-of-hospital medical services for dementia in 2018–19 by sex. General practice services was the highest area of expenditure, followed by pharmaceuticals, diagnostic imaging and specialist services. Females comprised the majority of expenditure in each out-of-hospital area, comprising almost two-thirds of out-of-hospital expenditure overall.

As the number of people with dementia increases with age, so does the out-of-hospital expenditure for dementia: $3.5 million, or 3.6% of the out-of-hospital expenditure for dementia was for people with younger onset dementia (aged under 65) whereas 40% or $40 million was for people with dementia aged 75–84 and 43% or just under $43 million was for people aged 85 and over (Figure 14.10).

The estimates of expenditure on out-of-hospital medical services include Australian Government costs (under the Medicare Benefits Schedule (MBS) and the PBS), as well as out-of-pocket costs by individuals. The majority of out-of-hospital medical expenditure for dementia (89% or over $88 million) was from Australian Government benefits.

There was little variation in the percentages of out-of-hospital medical expenditure from benefits and out-of-pocket costs by sex, but these differed by age. While the overall out-of-hospital medical expenditure was considerably less for those with younger onset dementia, out-of-pocket expenses accounted for a greater proportion of the out-of-hospital medical expenditure for those aged under 65 (18%) than those aged 85 and over (9.2%).

These differences are likely due to the Medicare safety net thresholds. These thresholds are designated amounts that a person can spend out-of-pocket for MBS services. Once a person reaches this threshold, Medicare benefits increase, which reduces out-of-pocket costs (Services Australia 2021). Older people have greater access to concession cards, which reduce the safety net thresholds, resulting in lower out-of-pocket costs. In addition, older patients are more likely to be reaching these thresholds earlier as they tend to have more comborbidities than younger patients and thus utilise health services more frequently.

Figure 14.10: Out-of-hospital medical expenditure for dementia in 2018–19 by age, sex and source of expenditure

Figure 14.10 is a bar graph that shows out-of-hospital medical expenditure for dementia in 2018–19 by age, sex and source of expenditure. There were higher levels of expenditure at older ages, as the number of people with dementia increases, particularly for those aged 75–84 and 85 and over. Government expenditure accounted for the majority of expenditure (89%), with the remainder being out-of-pocket costs. A larger proportion of expenditure for those at older ages was government expenditure. This is likely due to older people being more likely to have concession cards which reduce out-of-pocket costs.

Medications for dementia

There are 4 dementia-specific medicines – Donepezil, Galantamine, Rivastigmine and Memantine – currently subsidised by the Australian Government through the Pharmaceutical Benefits Scheme (PBS) and the Repatriation Pharmaceutical Benefits Scheme (RPBS) for treatment of Alzheimer’s disease. Refer to Prescriptions for dementia-specific medications for information on the dispensing of scripts for these medications in Australia in recent years.

In 2018–19, the total expenditure on dementia-specific medications was almost $20 million. This included Australian Government expenditure ($15 million, or 77% of expenditure on dementia-specific medications) and out-of-pocket expenses by patients ($4.6 million or 23%). Note, these estimates may include a small amount of expenditure for off-label prescribing of these medications which isn’t captured in the PBS/RPBS.

Of the total expenditure for dementia-specific medications, 43% was on Donepezil ($8.5 million), followed by Rivastigmine (31% or $6.1 million), Galantamine (15% or $2.9 million) and Memantine (12% or $2.3 million) (Figure 14.11a). These proportions are similar to the proportion of scripts dispensed for each type of medication in 2019–2020 (see Prescriptions for dementia-specific medications for further information).

The Australian Government subsidised the majority of the expenditure on each type of dementia-specific medication (Figure 14.11b). For patients, the average out-of-pocket cost for a single prescription for a dementia-specific medication was between $7 and $9. The average government subsidised amount per prescription varied substantially, from $14 for Donepezil to $74 for Rivastigmine.

Figure 14.11: Dementia-specific medication expenditure by medication type in 2018–19: (a) total costs and (b) average price per script by source of expenditure 

Figure 14.11 is two bar graphs describing expenditure on four dementia-specific medications (Memantine, Galantamine, Rivastigmine and Donepezil) in 2018–19. The first graph shows the distribution of expenditure on the four medications—43% ($8.5 million) of expenditure was on Donezepil, 31% ($6.1 million) on Rivastigmine, 15% on Galantamine and 12% on Memantine. The second graph shows average cost per script for each medication, by source of expenditure. At $82 per script, Rivastagmine cost approximately twice as much as Memantine and Galantamine and four times as much as Donepezil ($21). The majority of the cost per script was covered by government subsidies for all four medications.

In addition to dementia-specific medicines, people with dementia may also be prescribed other types of medicines by GPs and other medical specialists (such as geriatricians and neurologists) to manage dementia symptoms. Due to data limitations, GP-prescribing patterns are used to estimate the share of each prescribed medication related to dementia (including those prescribed by specialists).

Besides dementia-specific medications, a range of other prescription medications were commonly prescribed for dementia management, costing $4.0 million in 2018–19. The medicines in this group with the highest expenditure included:

  • $998,000 for antithrombotic agents (medicines to reduce blood clot formation)
  • $563,000 for antipsychotics
  • $465,000 for opioids (for pain relief)
  • $276,000 for anxiolytics (to manage anxiety)
  • $205,000 for dopaminergic agents (to treat symptoms of Parkinson’s disease).

The percentage of funding which was out-of-pocket costs for these medicines ranged between 12% for antithrombotic agents and 40% for anxiolytics.

For more information on medications prescribed to people with dementia, in particular antipsychotics, see Antipsychotics and other medications dispensed to people with dementia.

Figure 14.12: Estimated expenditure on other medications prescribed to manage dementia in 2018–19: by medication group and source of expenditure

Figure 14.12 is a bar graph that shows expenditure on other medications prescribed to manage dementia in 2018–19, by medication group and source of expenditure. Almost $1 million was spent on antithrombotic agents, followed by $563,000 for antipsychotics and $465,000 for opioids.

Examination of the average cost per script shows that the Australian Government subsidised the majority of the costs for each of the top 5 medication groups (Figure 14.13). For patients, the average out-of-pocket expense for the top 5 prescribed medications for dementia management ranged between $5 and $7. The average subsidised amount per prescription varied, from around $8 for anxiolytics to $52 for antithrombotic agents.

Figure 14.13: Average cost per script for medications used in dementia management in 2018–19: by medication group and source of expenditure

Figure 14.13 is a bar graph that shows the average cost per script for other medications used in dementia management in 2018–19, by medication group and source of expenditure. The majority of the cost was subsidised by the Australian government for each medication group. Out-of-pocket costs ranged between $5–$7. Anti-thrombotic agents had the highest average cost per script, followed by dopaminergic agents and opioids.