Total health expenditure and expenditure on hospital services
This page presents the total health expenditure directly attributable to dementia in 2018–19, as well expenditure on hospital services, including:
- Admitted patient care in public hospitals
- How expenditure for hospitalisations differed between public and private hospitals
- How dementia affects the cost of hospitalisations in public hospitals for common principal diagnoses
- Public hospital outpatient clinics and emergency department care expenditure.
Total health expenditure
In 2018–19, it was estimated that almost $482 million (or 16% of the total direct health and aged care system expenditure on dementia) was for health expenditure alone. The majority of this expenditure was for:
- hospital-related services – almost $383 million, which included:
- $185 million for public hospital admitted patient care and $29 million for private hospital admitted patient care
- $162 million for outpatient clinics in public hospitals
- $7.5 million for emergency department care in public hospitals.
- GP services – almost $30 million
- pharmaceuticals – just under $23 million (Figure 14.5).
Note that, as with other expenditure estimates in this report, expenditure for public hospital admitted patient care only includes dementia-specific costs of hospital separations (referred to as ‘hospitalisations’) where dementia was a principal or additional diagnosis. It does not include expenditure for the management of conditions other than dementia in estimates for that episode of care, which was 40% of the total cost of hospitalisations with a principal diagnosis of dementia.
Figure 14.5 is a bar graph that shows Australian Government health-care system expenditure attributable to dementia in 2018–19, by health-care area. The graph shows that the majority of expenditure was on public hospital admitted patient care (nearly $185 million) and public hospital outpatient clinic services (nearly $162 million). This was followed by spending on general practice services, private hospital admitted patient care and pharmaceuticals.
In 2018–19, $185 million was spent on public hospital admitted patient care for dementia. Of this, 54% or $100 million was for hospitalisations where dementia was the principal diagnosis or the main reason for admission (Figure 14.6). The remaining $85 million (46%) was for hospitalisations where dementia was an additional diagnosis – where dementia impacted care but was not the main reason for being admitted to hospital. These estimates are for expenditure directly related to dementia and not for the management of other conditions in the same hospitalisation.
Of the admitted patient care expenditure for dementia in public hospitals:
- Males with dementia accounted for a greater proportion (53% or $98 million) than females with dementia (47% or almost $87 million). This was mainly due to expenditure on males with dementia as the principal diagnosis ($56 million compared with just under $44 million for females).
- $136 million was for people aged 75 and over (74% of the admitted patient care expenditure related to dementia).
- $72 million was for hospitalisations of people aged 75 and over where dementia was the principal diagnosis (or 52% of the admitted patient care expenditure related to dementia for that age group) – this proportion was higher among people aged under 65 (56%).
- This is likely due to people often having poorer health and a greater number of comorbidities at older ages and at times being hospitalised for these conditions rather than their dementia.
- When dementia was an additional diagnosis, expenditure was fairly similar by sex ($42 million for males compared with just under $43 million for females).
These patterns are reflective of hospitalisations for dementia. See Hospital care for more information on hospitalisations for dementia in recent years.
Figure 14.6 is a bar graph that shows Australian government expenditure on public hospital admitted patient care attributable to dementia in 2018–19, by age, sex and whether dementia was a principal or additional diagnosis. Total expenditure was slightly higher for males, compared with females, primarily due to higher spending on those where dementia was a principal diagnosis. Expenditure was also higher for those aged 75–84 and 85 and over. A little over half (54%) of expenditure was on hospitalisations where dementia was the principal diagnosis.
This section focuses on the total cost of hospitalisations with a principal diagnosis of dementia in public hospitals compared with the cost for hospitalisations in private hospitals. Due to limitations in additional diagnosis information in private hospital admitted patient data, the costs in this section include costs associated with other health conditions. On average, there were 5–6 health conditions (other than dementia) recorded per hospitalisation in public hospitals compared with 3 conditions in private hospitals (Table S14.6). This may reflect differences in how diagnoses are recorded between private and public hospitals, as opposed to the number of health conditions impacting care provision.
In 2018–19, the average total cost of a hospitalisation with a principal diagnosis of dementia was just under $12,200 for public hospitals and $7,700 for private hospitals (Figure 14.7a). This difference was largely due to differences in the average length of stay, because the average cost per patient per day was similar (approximately $930) in both public and private hospitals (Figure 14.7b). The differences in the total cost likely reflect the complexity of cases that are treated in different hospital types, and patients in public hospitals possibly having more comorbidities than patients in private hospitals.
The average cost per patient per day decreased only slightly as the age of the patient increased (Figure 14.7b). Those with younger onset dementia (aged under 65) had the highest costs per patient per day (almost $1,200 for public and over $1,300 for private hospitals). However, these hospitalisations accounted for only 6.0% of public hospital and 4.3% of private hospital hospitalisations where dementia was the principal diagnosis. By comparison, patients with dementia aged 85 and over had the lowest average cost per patient per day ($840 for public and $898 for private hospitals) but accounted for 39% of public hospital and 42% of private hospital hospitalisations where dementia was the principal diagnosis.
For most age groups, the average cost per patient per day was similar for males and females except among those aged under 75 in private hospitals. This was $1,201 for males aged under 65 and $929 for males aged 65–74, compared with $1,409 for females aged under 65 and $1,130 for females aged 65–74.
Figure 14.7 shows two bar graphs related to Australian government expenditure on admitted patient care for people with a principal diagnosis of dementia in 2018–19. This expenditure is not just limited to the proportion of spending attributable to dementia. The first bar graph shows the average cost per hospitalisation, by age, sex and whether the hospital was public or private. The average cost per hospitalisation was $12,200 for public hospitals and $7,700 for private hospitals. The average costs were slightly higher for males across all age groups in public hospitals but higher for females in private hospitals, particularly in the older age groups. The second graph shows the average cost per admitted patient, per day. There is little difference between private and public hospitalisations. Those aged under 65 had a larger average cost per day. Average cost per day was similar between sexes for most age groups.
How does dementia affect the cost of hospitalisations in public hospitals for common principal diagnoses?
A diagnosis of dementia will influence the cost of a hospitalisation even when it is not the main reason for being admitted to hospital. To understand the costs related to dementia patients in hospital, the average costs of hospitalisations in a public hospital with an additional diagnosis of dementia were compared to those without dementia for a number of common principal diagnoses seen among older people, as well as people with dementia. These included principal diagnoses for a number of cardiovascular conditions, type 2 diabetes, fractures, infections and signs and symptoms commonly seen in those with advanced dementia (Table 14.1).
Of the principal diagnoses examined here, the most common in 2018–19 were Fracture of femur (S72) where dementia was an additional diagnosis (almost 7,200 hospitalisations). On average, people with dementia stayed 1 to 6 days longer in hospital than those without dementia, depending on the main condition.
The average cost per hospitalisation was greater among people with dementia than people without dementia for the majority of the other common principal diagnoses, including the most expensive condition: Fracture of femur (S72). This was just over $19,300 on average, per hospitalisation for people with dementia compared with just over $15,000 on average, per hospitalisation for people without dementia.
Compared to people without dementia, the greatest difference in the average cost of hospitalisations for people with dementia was for:
- atrial fibrillation and flutter (I48) – 2.5 times greater for patients with dementia ($11,300) than without dementia ($4,600)
- urinary tract infection, site not specified (N390) – 1.9 times greater for patients with dementia ($9,000) than without dementia ($4,800)
- abnormalities of gait and mobility (R26) – 1.8 times greater for patients with dementia ($5,500) than without dementia ($3,100) (Table 14.1).
Osteoarthritis of knee (M17) had a similar cost for those with and without dementia, and pneumonitis due to solids and liquids (J69), sepsis unspecified (A419) and osteoarthritis of hip (M16) had on average, a lower cost per hospitalisation for those with dementia than without dementia.
Table 14.1: Average cost per hospitalisation in a public hospital for patients with dementia compared to patients without dementia in 2018–19: by select principal diagnoses
Principal diagnosis (ICD-10 code)
Average cost, per hospitalisation ($)
Average cost difference ($)
Atrial fibrillation and flutter (I48)
Urinary tract infection, site not specified (N390)
Abnormalities of gait and mobility (R26)
Type 2 diabetes mellitus (E11)
Fracture of rib(s), sternum and thoracic spine (S22)
Pneumonia, organism unspecified (J18)
Fracture of femur (S72)
COPD with acute lower respiratory infection (J440)
Heart failure (I50)
Fracture of lumbar spine and pelvis (S32)
Cerebral infarction (I63)
Delirium, not induced by alcohol and other psychoactive substances (F05)
Osteoarthritis of knee (M17)
Pneumonitis due to solids and liquids (J69)
Sepsis, unspecified (A419)
Osteoarthritis of hip (M16)
1. ICD-10-AM refers to the International Classification of Diseases 10th revision Australian Modification.
2. Average cost difference is the average cost per hospitalisation with dementia minus the average cost per hospitalisation without dementia. Numbers may not add up due to rounding.
3. Rate ratio is the average cost per hospitalisation with dementia divided by the average cost per hospitalisation without dementia.
4. Delirium, not induced by alcohol and other psychoactive substances (F05) does not include delirium superimposed on dementia (F051) as this is included in the costs for dementia.
Source: AIHW analysis of National Hospital Morbidity Database and National Hospital Cost Data Collection.
As the cost differences shown in Table 14.1 may be attributable to dementia as well as other co-existing conditions, the contribution of dementia to the average cost per hospitalisation was examined. Dementia was directly attributable for between 7% (for fracture of lumbar spine and pelvis (S32)) and 24% (for bnormalities of gait and mobility (R26)) of the average cost per hospitalisation among the examined principal diagnoses (Table S14.8).
In 2018–19, $162 million was spent on non-admitted patient care for dementia in public hospital outpatient clinics, equivalent to 5.4% of the direct health and aged care expenditure attributable to dementia. Services provided in outpatient clinics include; consultations with specialist medical practitioners; allied health and specialist nursing care; diagnostic and other procedures; dispensing of medicines; and some community health services provided by hospitals (AIHW 2019). Aged care assessments, geriatric medicine, hospital avoidance programs, and palliative care accounted for the greatest outpatient expenditure for dementia.
A further $7.5 million was spent on emergency department (ED) care in public hospitals, equivalent to 0.25% of the total direct health expenditure on dementia. It is acknowledged that the ED expenditure will be an underestimate, as it relates only to presentations where dementia was recorded as the principal diagnosis. Refer to the Technical notes for more information on health condition coding in ED data.
The average cost of a service for dementia in a public hospital outpatient clinic was $375 and for an ED presentation was almost $1,000 (Figure 14.8). There was little difference in these costs between male and female patients and by age.
Figure 14.8 is a set of two bar graphs showing the number and average cost of public hospital outpatient clinic services and emergency department presentations for dementia in 2018–19, by age and sex. The number of services for both emergency department presentations and outpatient clinic services increases with age, although there is little difference in the average cost per service. Number and average cost per service does not vary substantially by sex.