Expenditure on mental health-related services

This section reviews the available information on recurrent expenditure (running costs) for mental health‑related services. Health expenditure (what was spent) and health funding (who provided the funds) are distinct but related concepts essential to understanding the financial resources used by the health system. Data on expenditure and funding, calculated in both current and constant prices, are derived from a variety of sources, as outlined in the data source section. Most data presented is for the 2014–15 period, therefore, constant prices are adjusted to 2014–15 levels, including more recent 2015–16 Australian Government Medicare expenditure and mental health-related medications subsidised under the PBS and RPBS expenditure data. Further information on health expenditure is available in Health expenditure Australia 2014–15 (AIHW 2016).

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Expenditure on mental health-related services tables (1.9MB XLS)

Expenditure on mental health-related services section (462KB)

Data coverage includes the time period 2006–07 to 2014–15. This section was last updated in June 2017.

Key points

  • Around $8.5 billion, or $361 per person, was estimated to be spent on mental health-related services in Australia during 2014–15, an increase from $343 per person (adjusted for inflation) in 2010–11 (2014–15 dollars).
  • $5.2 billion was spent on state and territory specialised mental health services, an average annual real increase of 2.3% between 2010–11 and 2014–15. Of this, most was spent on public hospital services for admitted patients ($2.2 billion), followed by community mental health care services ($1.9 billion).
  • Expenditure on specialised mental health services in private hospitals was $433 million during 2014–15.
  • The Australian Government paid about $1.1 billion in benefits for Medicare-subsidised mental health‑related services in 2015–16, equating to 5.3% of all Medicare subsidies. Expenditure on psychologist services (clinical and other) ($489 million) made up the largest component of mental health‑related Medicare subsidies in 2015–16.
  • The Australian Government spent $564 million, or $24 per person, on subsidised prescriptions under the PBS/RPBS during 2015–16, equating to 5.0% of all PBS/RPBS subsidies. Prescriptions for antipsychotics (49.6%) and antidepressants (36.5%) accounted for the majority of mental health-related PBS and RPBS expenditure during this time period.

Overview

The national recurrent expenditure on mental health-related services in 2014–15 was estimated to be around $8.5 billion; an average annual real increase of 2.9% between 2010–11 and 2014–15. Overall, national expenditure on mental health-related services increased from $343 per person in 2010–11 to $361 per person during 2014–15, adjusted for inflation. Expenditure on mental health-related services in 2014–15 was estimated to be around 7.8% of total health expenditure, which was relatively stable compared to 7.7% in 2010–11.

Of the $8.5 billion spent nationally in 2014–15, 59.6% ($5.1 billion) was funded by state and territory governments, 35.7% ($3.0 billion) by the Australian Government and 4.8% ($408 million) by private health insurance funds. This distribution has remained relatively stable over time, with 60.8% of national spending coming from state and territory governments, 35.4% from the Australian Government and 3.8% from private health insurance funds in 2010–11.

Funding from the Australian Government for mental health-related services (adjusted for inflation) increased by an average annual rate of 3.6% over the period 2010–11 to 2014–15, while funding from state and territory governments increased by an average annual rate of 2.0%.

The National Mental Health Commission's 2014 Review of Mental Health Programmes and Services (NMHC 2014) used a broader methodology to estimate Australian Government expenditure on mental health. The methodology included broader mental health-related costs, such as the Disability Support Pension and Carer Payment and allowances. The Australian Government mental health-related expenditure in 2012–13 was estimated to be $9.6 billion, comp(ared to $2.8 billion using the methodology employed in this publication, as outlined in the data source section


References

AIHW (Australian Institute of Health and Welfare) 2016. Health expenditure Australia 2014–15. Health and welfare expenditure series no. 57. Cat. no. HWE 67. Canberra: AIHW.

NMHC (National Mental Health Commission) 2014. The national review of mental health programmes and services Sydney: NMHC.

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