Health expenditure Australia 2023–24

Examples of other health expenditure reporting include:

• The ABS uses the System of National Accounts to report Australia’s National Accounts (ABS 2016). This economy-wide classification system is broader than just the health sector and uses different data sources, classifications and estimation methods to the ANHA to ensure consistency across the economy. For example, where spending through health insurance is considered part of the health system under the ANHA, it is considered part of the insurance sector in the System of National Accounts. Another reason for variation comes from the ABS use of the Government Finance Statistics (Australian GFS, or AGFS, referred to as “GFS” in this report) as a source for government spending, which varies from the source used by the AIHW, the latter having been tailored specifically for the ANHA. While the basis for both systems is the general ledger transactions that are recorded by the various government agencies, including Departments of Health, the two vary for a number of reasons, including:
  • The GFS approach is a ‘purpose’ classification, which means that the basis for classifying expenditures is the purpose for which the expenditure relates, rather than the nature of the product or service purchased. This means, for example, that remote housing constructed for the purpose of housing medical staff would be treated as health spending in the GFS but not in the ANHA.
  • The health classification in the GFS potentially includes activities that are outside of the scope of the ANHA (for example, nursing and convalescent home services) and may exclude activities that are within the scope of the ANHA (for example, private health insurance premium rebates). 
• All governments within Australia produce financial reports, including annual reports, budget papers and specific program data. While these generally use the same source data as are provided to the AIHW (audited financial statements and ‘general ledgers’), variations in scope can occur between what might, for example, be in a report covering spending across a health and human services portfolio and what is needed for the ANHA. Classifying the data to fit the ANHA classification system can require adjusting specific items to avoid duplication, or drawing on other data sources, such as hospital activity data, to ‘fit’ the spending into ANHA categories. For example, staff engaged by a specific health service might technically be considered departmental staff in some states and territories. In these cases, spending can essentially be captured twice in the annual report, but this duplication is eliminated for reporting to the AIHW. The states and territories conduct this work each year as part of the Government Health Expenditure National Minimum Data Set (GHE NMDS) collation. The AIHW continually reviews this with the states and territories bilaterally and through the HEAC to maximise consistency over time and between jurisdictions. The results, however, inevitably vary to some degree from what is publicly reported. A high-level indicative overview outlining the variation between the ANHA figures for governments and the figures reported in the respective health authority annual reports for 2023–24 is presented in Table C2 to illustrate the observed variations. 
• The Administrator of the National Health Funding Pool (NHFP), supported by NHFB publishes data on funding and payments through the NHFP that was established under the National Health Reform Agreement (NHRA). These data form an important component of the spending outlined in this report, particularly with public hospital spending. However, not all public hospital spending outlined in this report is administered through the NHFP, so additional information sources are drawn on to capture the full scope of public hospital spending. Note that “public hospital spending or “spending on public hospitals” in this report are actually referring to public hospital services as an area of expenditure, not public hospitals as entities.
• Each year the AIHW provides a derivation of the ANHA to the OECD and the World Health Organization in accordance with the classification used for international reporting, known as the System of Health Accounts. Despite being derived from the same source data, differing classification systems can result in variations in health spending for particular components of the health system. For example, the System of Health Accounts tends to report on comparisons of recurrent health spending excluding capital across OECD countries. Health and medical research are also excluded in the SHA while it is included in the ANHA.