Health expenditure Australia 2020-21

Expenditure components

State and territory governments manage and administer the public hospital system as well as many other health goods and services. These goods and services are financed by a combination of their own funding (column F), as well as funds from the Australian Government and non-government sources.

The major sources of data on spending on most health activities by state and territory governments are supplied through the GHE NMDS, which includes 3 main tables:

• ‘Revenue’ – all revenue received from DVA and any payments from government departments in other states or territories in relation to cross-border charging, but excluding Australian Government funding such as NHR funding. This table is categorised by revenue source and organisation type.
• ‘Gross expenditure’ – wages, salaries and supplements, employer superannuation contributions, workers’ compensation premiums and payouts, purchases of goods and services and capital depreciation for all health services. This table is categorised by organisation type and function.
• ‘Depreciation’ – consumption of fixed capital for all health services. This table is categorised by organisation type and function.

Data from GHE NMDS ‘Gross expenditure’ for each state and territory are mapped with areas of expenditure based on the organisation type, and assigned to the following areas:

• Public hospitals (rows 01, 05 and 06)
• Private hospitals (row 04)
• Patient transport services (row 12)
• Dental services (row 15)
• Other health practitioners (row 16)
• Community health (row 20)
• Public health (row 27)
• Administration (row 30)
• Other research (row 32).

GHE NMDS ‘Gross expenditure’ includes capital depreciation. Prior to 2019–20, depreciation of capital data from ABS statistics were used instead of the figures from GHE NMDS ‘Depreciation’. The ABS depreciation was allocated on the basis of the depreciation proportion by organisation function from the GHE NMDS. Since 2019–20, since the ABS depreciation data did not take into account the accounting standard changes related to leases (AASB, 2016), depreciation data in Table 4 GHE NMDS are used instead.

State and territory capital expenditure (row 36, data from ABS Government GFCF) and expenditure funded by state and territory governments on health research (rows 31 and 32, data from ABS Research and Experimental Development statistics) are added to complete the gross expenditure components.

Offsets

Revenue computed for each area of spending are offset against the respective gross expenditure in each area. Data for revenue in GHE NMDS ‘Gross expenditure’ are not collected by function codes, therefore revenue data are allocated across functions (areas of expenditure) based on the proportions of gross expenditure in each organisation type. This results in a distribution of revenue for each area of spending.

Revenue from the Australian Government and non-government sources are offset against state and territory spending, including:

• revenue from DVA for public hospitals (row 01): data from DVA (processed in column A)
• revenue from PHI for public hospital services (row 01) and ambulance levy (row 12): data from APRA (processed in column G)
• NHR funding for public hospitals (row 01) and public health (row 27): data from Treasury Final Budget Outcome and NHFB.
• Since 2020–21, the NHR funding on public hospitals (row 01), private hospitals (row 04), community health (row 20), public health (row 27), and patient transports (row 12). Note that capital expenditure is not reported in the GHE NMDS, the NPCR funding allocated in row 36 is not offset in column F. More details are provided in column B.
• NPPs on various areas (various rows from 01 to 40): data from Treasury Final Budget Outcome.
• PBS Section 100 programs in Public hospitals: row 01
• revenue from workers’ compensation insurance and CTPI for public hospital services (row 01).

Notes

There are no offsets from states and territories (column F) to other expenditure sources (other columns). However, revenues from specific sources (GHE NMDS ‘Revenue’) are used to determine the health expenditure in relevant columns, such as:

• revenue from Workers’ compensation insurance is treated as column J expenditure
• revenue from CTPI is treated as column K expenditure
• revenue from Private households (Self-funded/out-of-pocket expenditure) is treated as column H expenditure
• revenue from Other private sector is treated as column I expenditure.