Australian Institute of Health and Welfare (2022) Health expenditure Australia 2020-21, AIHW, Australian Government, accessed 30 November 2022.
Australian Institute of Health and Welfare. (2022). Health expenditure Australia 2020-21. Retrieved from https://www.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure-australia-2020-21
Health expenditure Australia 2020-21. Australian Institute of Health and Welfare, 23 November 2022, https://www.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure-australia-2020-21
Australian Institute of Health and Welfare. Health expenditure Australia 2020-21 [Internet]. Canberra: Australian Institute of Health and Welfare, 2022 [cited 2022 Nov. 30]. Available from: https://www.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure-australia-2020-21
Australian Institute of Health and Welfare (AIHW) 2022, Health expenditure Australia 2020-21, viewed 30 November 2022, https://www.aihw.gov.au/reports/health-welfare-expenditure/health-expenditure-australia-2020-21
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The Australian Government funds DVA by making payments through DVA for health services to eligible veterans and their dependents.
Annual expenditure statistics for estimating spending by DVA are sourced from three tables:
The payments of health goods and services from ‘MRCA and SRCA’ and ‘Program benefits’ are mapped to areas of spending:
Payments for Pharmaceutical Services in ‘Program Benefits’ is apportioned to states and territories using proportions derived from the RPBS.
DVA’s spending on Residential Nursing Home is allocated to row 11 (High-level residential care) and spending on Community Nursing is allocated to row 68 (Welfare expenditure) – these are not currently included in the ANHA.
There are no offsets for column A.
DVA’s spending on:
Also note that DVA changed their reporting system of health expenditure in 2020–21 which have some impacts on the time series of health spending in this report. Therefore, caution should be exercised when comparing results between years for any area of expenditure.
The Australian Government contributes to funding of health services to the states and territories through the NHRA. NHR funding is primarily directed to spending on the public hospital systems managed and administered by the states and territories. Health-related payments are also made as NPPs for specific projects or outcomes.
The data used in estimating the Australian Government funding of states and territories are sourced from:
These data are provided at the state/territory level.
NHR funding is assigned to Public hospitals (row 01) and Public health (row 27). Payments under NPPs are mapped to the relevant areas of spending, including:
Since 2019–20, the NHR funding has been including the Australian Government contribution in the National Partnership on COVID-19 Response (NPCR). Data for the NPCR entitlements are obtained from the NHFB and are allocated to public hospitals (row 01), private hospitals (row 04), community health (row 20), public health (row 27), patient transports (row 12), and capital expenditure (row 36). Personal protective equipment (subject to 2018–19 baseline) spending is allocated to rows 01, 04, 12, 20, and 27 using state and territory’s reported gross expenditure spending on those areas.
There are no offsets for column B.
To derive state and territory own expenditure, the Australian Government funding of states and territories is offset against State and territory governments’ gross expenditure (column F) in relevant areas of spending, except for capital expenditure.
Capital expenditure and other research are offset against the relevant areas by Other Australian Government (column E), as column E already includes the total spending by the Australian Government on health research and capital expenditure.
The Australian Government subsidises the cost of PHI by paying a rebate on the premiums paid by individuals for PHI. It is regarded as an indirect subsidy of all types of health services through PHI. The rebate can be paid directly to PHI providers (column C) or through the tax system (column M) (Box 2.2).
The data used in processing PHI rebates claimed through PHI providers are sourced from the relevant DHAC program cost centre expenditure. This amount is allocated to areas of expenditure based on the proportion of benefit payments in each area by PHI providers (Box 3.1), obtained from APRA data:
Rebate amounts are allocated to areas of expenditure based on the proportion of benefit payments in each area by PHI providers.
However, not all revenue collected by PHI providers is spent on health. Data from APRA are used to compute the proportion of total PHI provider revenue paid out as health benefits and spent as health administration. This proportion is applied to calculate the total rebate amount spent for health purposes. As the result, the estimate of health spending reported in HEA is an estimate of the rebate paid out as benefits. It is therefore smaller than the total rebate paid to individuals to reduce premiums.
For example, in 2018–19, data from APRA showed that 94.3% of total PHI provider revenue was spent on health (including paid out as health benefits to members and spent on administration). As the rebate is treated as a revenue source for PHI providers, only 94.3% of the total rebate is counted as health expenditure in the same year.
More detail on the processing of these data are described in Column G – PHI providers.
There are no offsets for column C.
PHI premium rebate amounts paid by the Australian Government are offset against PHI providers (column G) in the relevant areas of spending. Column G calculates the gross health expenditure funded by PHI providers, therefore subsidies from the Australian Government (through PHI providers and through taxes) are subtracted to derive PHI providers’ own health spending.
The Australian Government contributes significantly to health funding through programs and payments administered through DoHAC. These include:
Program cost centres (except the cost centre for PHI rebates claimed through PHI providers, as mentioned in column C) are mapped to the relevant areas of expenditure based on the main purpose of the service. The cost centres are checked thoroughly annually with DoHAC to ensure new items are included and mapped accordingly. State-specific cost centres are allocated to the relevant state or territory. For cost centres that are not state-specific, factors such as population or staff number proportions are used to allocate expenditure at the state/territory level.
These cost centres are assigned to the following areas of expenditure:
Payments of benefits for medical services on the MBS are used to compute the health spending for: Referred medical services (row 14); Dental services (row 15); Other health practitioners (row 16), and Unreferred medical services (row 40).
Note that, as mentioned in subsection 2.3.4 above, since 2012–13, in-hospital MBS services have been allocated to row 14 (the majority) and row 40 (a small amount of PHC provided in hospitals) due to the unavailability of identifying whether a particular MBS service is provided in a public or private hospital.
As DoHAC spending on aged care, sports and health workforce is not currently in the scope of the ANHA, a proportion of total spending is calculated to estimate the health component of the administrative and departmental expenses of DoHAC. This proportion is also used for the departmental expenses of Services Australia. The results are allocated to Other administration (row 30).
There are no offsets for column D.
Spending for research (rows 31, 32) and Capital expenditure (row 36) is offset against Other Australian Government (column E).
This column includes other spending on health by the Australian Government (except DVA, DoHAC, grants to states and territories and PHI rebates). The data used in estimating this are sourced from:
Spending on health research funded by the Australian Government is derived using:
Research funded by State and territory governments and local governments is included in column F, while research funded by the private sector is included in column I (Other private).
NHMRC grants are included as other Australian Government expenditure but are offset against itself since the grants have been accounted for in the University based research from the Higher Education Organisations survey.
Capital expenditure (row 36) by the Australian Government obtained from ABS Government GFCF is available at a national level only; these estimates are allocated to states and territories based on the proportion of health and medical staff in each jurisdiction.
The ABS data on depreciation of fixed assets (ETF 1231) for the Australian Government are allocated to the relevant area of spending and the state/territory level by using proportions calculated from cost centre data (processed in column D).
Since 2019–20, health expenditure by Australian Department of Defence (rows 01 to 40) has been added to the HED in column E.
The ABS research surveys and ABS Government GFCF provide comprehensive estimates for Australian Government expenses relating to health research (rows 31, 32). Therefore, health research spending funded by DVA (column A), grants to states and territories (column B), and DoHAC (column D) are offset in column E to avoid double counting. Similarly, spending from DoHAC’s cost centres and Australian Government grants to states and territories on capital expenditure (row 36) are also offset in this column.
Medical expenses tax rebate (row 37) is treated as a subsidy by the Australian Government to Individuals. It is offset against Individuals health spending in column H. This rebate was phased out after the end of 2018–19.
The Australian Government subsidises the cost of PHI by paying a rebate on the premiums individuals pay for this insurance. It is regarded as an indirect subsidy of all types of health services through PHI. The rebate can be paid through the tax system (column M) or directly to PHI providers, which reduces premiums (column C) (Box 2.2). Where the premium rebate is claimed through tax, PHI members pay the full premium and claim the rebate at the end of the financial year.
Data for the total PHI premium rebates claimed through tax are sourced from:
The rebate amounts are allocated to areas of expenditure based on the proportion of benefit payments in each area by PHI providers (Box 3.1), obtained from APRA data:
There are no offsets for column M.
The PHI premium rebate amounts paid by the Australian Government are offset against PHI providers (column G) in the relevant areas of spending. Column G calculates the gross health expenditure funded by PHI providers, therefore subsidies by the Australian Government (through taxes as well as through funds) are subtracted to derive PHI providers’ own health spending.
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