Total health spending

Estimates of total health spending capture the national aggregate expenditure on health goods and services for both recurrent and capital purposes.

In 2023–24, Australia spent an estimated $270.5 billion on health. In real terms, this represents a $2.8 billion (1.1%) increase compared to 2022–23 (Figure 1a). This growth was lower than the average annual growth of 3.2% over the decade from 2013–14.

Figure 1b presents the trajectory of total health spending from 2008–09 through 2023–24, comparing actual spending against the pre-pandemic trend. The graph highlights several distinct phases:

  • 2019–20: Health spending growth slowed due to pandemic-related activity restrictions.
  • 2020–21 and 2021–22: A rebound occurred, driven by increased government investment in the public health response to COVID-19.
  • 2022–23: Spending returned to the pre-pandemic trend as emergency measures and COVID-related funding were largely phased out.
  • 2023–24: Total health spending fell below the pre-pandemic trend, primarily due to non-government spending remaining subdued.

These shifts reflect not only the direct impact of the pandemic but also broader structural changes in the health system and economy. In the post-pandemic period, comparisons to pre-pandemic trends are less informative due to the emergence of a ‘new normal’, shaped by:

  1. Macroeconomic shifts such as rising interest rates, changing employment patterns, and hybrid work arrangements
  2. Evolving models of care, including increased telehealth use and changes in PBS pricing
  3. Adjustments in healthcare workforce remuneration and incentives

Figure 1a: Nominal(a) and real(b) total health expenditure, 2013–14 to 2023–24

The line graph shows that total health spending in both current and constant prices increased each year from 2013–14 to 2023–24. Total health spending in current prices increased from $153.9 billion in 2013–14 to $270.5 billion in 2023–24. In the same period, total health spending in constant prices increased from $198.2 billion to $270.5 billion.

The line graph shows that total health spending in both current and constant prices increased each year from 2013–14 to 2023–24. Total health spending in current prices increased from $153.9 billion in 2013–14 to $270.5 billion in 2023–24. In the same period, total health spending in constant prices increased from $198.2 billion to $270.5 billion.
  1. Nominal spending refers to spending not adjusted for inflation from one year to another year.
  2. Real spending refers to spending accounted for inflation by removing the effect of changes in prices over year. Real health spending is in 2023–24 prices.

Source: AIHW Health Expenditure Database (Table 1).

Figure 1b: Total health spending, constant prices, compared to the pre-pandemic trend 

The line graph shows the total health spending, in the four years during the period (2019–20 to 2023–24 compared to the trend of the previous 10-year period (2008–09 to 2018–19). Assuming the average growth rate for the previous 10-year period remains the same for the recent years, the trend amounts of total health spending in constant prices for 2019–20, 2020–21, 2021–22, 2022–23 and 2023–24 were $238.7 billion, $247.4 billion, $256.2 billion, $265.4 billion and 275.0 billion, respectively. While the actual amounts for these years were $234.5 billion, $251.7 billion, $267.7 billion, $267.6 and $270.5 billion, respectively. 

The line graph shows the total health spending, in the four years during the period (2019–20 to 2023–24 compared to the trend of the previous 10-year period (2008–09 to 2018–19). Assuming the average growth rate for the previous 10-year period remains the same for the recent years, the trend amounts of total health spending in constant prices for 2019–20, 2020–21, 2021–22, 2022–23 and 2023–24 were $238.7 billion, $247.4 billion, $256.2 billion, $265.4 billion and 275.0 billion, respectively. While the actual amounts for these years were $234.5 billion, $251.7 billion, $267.7 billion, $267.6 and $270.5 billion, respectively. 

Notes:

  • Actual amount is the health spending in 2023–24 prices.
  • Trend amount refers to the health spending in 2023–24 prices, following the trend of the previous 10-year period (assuming the average annual growth rate for the previous 10-year period remains the same for the period from 2019–20 to 2023–24).

Source: AIHW Health Expenditure Database (Table 1).

The main areas of increased health spending in 2023–24 were:

  • hospitals, by $1.3 billion (1.2% increase).
  • referred medical services, by $0.7 billion (2.9% increase).
  • other services (including patient transport services, aids and appliances, and administration expenses), by $0.6 billion (3.2% increase).
  • capital expenditure, by $0.7 billion (4.8% increase). 

Conversely, estimated spending decreased in some areas, including:

  • primary health care (including public health), by $0.4 billion (0.5% decrease)
  • health research, by $0.1 billion (1.4% decrease) (see Tables A5 and A6).

Table A6: Total health expenditure, constant prices, by area of expenditure and source of funds, 2023–24 ($ million)

The table shows the total health spending in constant prices, by area of spending and source of funds in 2023–24. In this year, total governments funded $188.1 billion of which $106.2 billion by the Australian Government and $82.0 billion by state and territory governments. In 2023–24, non-government entities (including individuals, private health insurance providers, injury compensation insurers and other private sources) spent an estimate of $82.3 billion on health. Individuals spent at $44.0 billion on health, private health providers $21.0 billion and other non-government sources $17.3 billion.

Notes:

  • ‘Health and other’ figures include Australian Government Department of Health, Disability and Ageing’s own programs, grants to states and territories (including National Health Reform grants, PBS section 100 programs in public hospitals and other National Partnership Payments), funding by other Australian Government agencies (including Department of Defence, capital consumption, and others).
  • ‘HIF’ figures include health spending by Health insurance providers.
  • ‘Other’ figures include health spending funded by other non-government sources (such as injury compensation insurance providers, non-government sector capital spending, non-patient revenue of private hospitals, and other private spending on health and medical research).

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