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

Coronavirus disease 2019 (COVID–19) that emerged in 2019 quickly became a worldwide crisis due its severity and lack of immediate population immunity, and by March 2020, the World Health Organization declared it a pandemic. Australia faced significant disruptions due to the COVID–19 pandemic since early 2020 through to the first half of 2022, experiencing waves of infections that strained the health care system and its resources and led to loss of life. By December 2021, there were five detected variants in Australia with a wide spectrum of severity.

Although the initial burden of disease from COVID–19 in Australia was modest, ranking 135th in leading cause of burden (with only 8,400 disability-adjusted life years (DALYs) lost) in 2020, by 2022, COVID–19 became the 5th leading cause of fatal burden (contributing to 4.1% of total burden) and 21st leading cause of non–fatal burden (contributing 1.4% of total burden). COVID–19 ranked 30th among the specific diseases causing burden in 2023, accounting for 0.9% of total burden and 1.5% of all fatal burden. The burden from COVID–19 was predominantly fatal (83%) (AIHW 2022a, AIHW 2023)

COVID–19 has also placed a substantial load on Australia’s health system, which has resulted in increased health spending particularly in public health and public hospitals.

The purpose of this report is to understand how government and non-government health and aged care spending in response to COVID–19, was distributed during the four financial years Australia has been primarily impacted by the pandemic, 2019–20, 2020–21, 2021–22 and 2022–23.

Government spending is sourced from the National Partnership on COVID–19 Response (NPCR) and the Australian Government Department of Health and Aged Care. A component of this spending relates to aged care and includes:

• programs with COVID–19 as part of their description within the Ageing and Aged Care outcome of the Department of Health and Aged Care annual reports
• aged care response payments and emergency public health response staffing for aged care facilities from the NPCR

Spending by individuals is sourced from pharmacy sales data and from out-of-pocket payments for COVID–19 related Medicare Benefits Schedule (MBS) and Pharmaceutical Benefits Scheme (PBS) items. The report also explores Australia’s standing amongst OECD countries in terms of additional health spending compared to pre-COVID trends and excess mortality during the pandemic.

This report has a broader scope than the Health system spending on disease and injury in Australia report series which is limited to spending directly attributable to the treatment of COVID–19 in hospitals, and through the MBS and PBS. This report, by contrast, estimates total government health and some aged care spending in response to the pandemic, including public health spending on the vaccine rollout and COVID–19 testing for example. This report also includes estimates of spending by individuals on COVID–19 related items.

A timeline of the key events during the Australian experience of the pandemic is provided in the Appendix.