Health system spending on the response to COVID-19 in Australia 2019–20 to 2022–23

The NPCR, agreed to and signed by the Council of Australian Governments (COAG) in March 2020, and administered by the Administrator of the National Health Funding Pool (the Administrator) and the National Health Funding Body, is a collaborative initiative established between the Australian Commonwealth government and the state and territory governments to effectively manage the COVID–19 pandemic response. The NPCR was split into three types of payments:

1. Hospital services payments (HSP)
2. State public health services payments (SPHP)
3. Private hospital financial viability (FVP)

The HSP includes activity in the public hospital sector, pathology / diagnostic costs relating to testing for COVID–19 and activity in the private hospital sector as directed by States (as public patients). The activities include admitted patient care, emergency department presentations and non–admitted hospital care.

The SPHP includes additional public health activities such as vaccine response, securing additional emergency PPE supplies, providing funding to expand critical ICU and ventilation capacity, boosting contact tracing and public health communication, supporting additional cleaning in hospitals, schools and public transport. From 2021, the SPHP also includes Rapid Antigen Tests (purchase, logistics and distribution costs) and Vaccine Dose Delivery Payments.

The FVP payments enable critical resources from the private hospital sector to be available to the public hospital sector including clinical, auxiliary staff, hospital, and ICU beds (NHFB 2022).

The Australian Government and state and territory governments contributed equally to the NPCR funding with the exception of the financial viability payments to private hospitals and some aged care payments which were funded solely by the Australian Government. The NPCR expired on 31 December 2022 with the total payments made by the Australian Government being $14.3 billion over the period from March 2020 to December 2022. Over the same period the state and territory government contribution was $12.7 billion. In aggregate over the four years, the public health payment was the largest area of spending at $17.6 billion, followed by hospital services $8.0 billion and FVP $1.5 billion.

Figure 1: Government contribution to NPCR, current prices, 2019–20 to 2022–23

Hospital services payments (HSP)

From 2019–20 to 2022–23, $8.0 billion was spent on HSP. This included services for public patients in public hospitals (admitted, non–admitted and emergency department services), admitted patient services for public patients in private hospitals and COVID–19 testing in public hospitals. There was an equal contribution from the Australian Government and state and territory governments for all services that were part of the HSP ($4 billion each).

Figure 2: Government Hospital Services Payments by program from 2019–20 to 2022–23

State Public Health Payments (SPHP)

From 2019–20 to 2022–23, $17.6 billion was spent on SPHP, which included public health activities (such as the vaccination rollouts and communications to address the COVID–19 response), rapid antigen tests, personal protective equipment, primary care services, aged care (mainly staffing support) and non–clinical services. The SPHP also included capital expenditure, equipment, border force and airport screening, which are included in the category ‘other’ in Figure 3 below.

Figure 3: State Public Health Payments by program from 2019–20 to 2022–23

Private Hospital Financial Viability Payment (FVP)

From 2019–20 to 2022–23, $1.5 billion was spent on the FVP. This funding comprised three broad subcomponents: a financial and capacity viability payment, a fund for private hospital equipment and the redeployment of the health workforce to public hospitals and Commonwealth directed private hospital activity. The FVP was solely paid for by the Australian Government.

Figure 4: Private Hospital Financial Viability Payment from 2019–20 to 2022–23

NPCR payments by jurisdiction

In aggregate over the four financial years of the pandemic (2019–20 to 2022–23), Victoria received the highest NPCR payment of $10.1 billion. NSW received the second highest payment of $9.4 billion. This is consistent with the number of COVID–19 cases and hospitalisations experienced by these jurisdictions as shown on the MyHospitals website (AIHW 2024b).

Figure 5: NPCR payments by jurisdiction and funding source, 2019–20 to 2022–23

It is important to note that any spending for COVID–19 by the states and territories outside the NPCR has been excluded from the report as it was difficult to ensure the consistency of reporting between jurisdictions and accurately determine the source of the funding for each jurisdiction.

NPCR payment types by area of spending

Figure 6 shows the NPCR payments of $27.0 billion across the four years of the pandemic disaggregated by the areas of expenditure as per the Australian National Health Account.

Figure 6: NPCR payments by area of spending, 2019–20 to 2022–23 ($ million)