Australian Government expenditure

Australian Government expenditure on mental health‑related services

Australian Government expenditure on mental health-related services was estimated to be $3.6 billion in 2018–19. However, as noted previously and detailed in the data source section of this report, there are other known Australian Government outlays attributable to supporting mental health issues which are not included in this estimate, for example, disability support pensions and the Australian Government’s contribution to public hospital costs. Note that expenditure previously reported by the Department of Social Services (DSS) for 2016–17 excluded NDIS transitioning program expenditure but this has been amended in the current reporting.

Australian Government expenditure on mental health-related services, adjusted for inflation, increased by an average annual rate of 2.1% between 2014–15 and 2018–19. This equates to an annual average increase of 0.5% when adjusted for adjusted for inflation, from $140 per person in 2014–15 to $143 in 2018–19. Changes in Pharmaceutical Benefits Scheme (PBS) or Repatriation Pharmaceutical Benefits Scheme (RPBS) expenditure substantially impacted the overall change, declining by over $8 per person over this time frame, specifically due to expenditure on antipsychotics and antidepressants declining by about $6 and $4 per capita respectively. This was likely the result of a decrease in the subsidised cost of some medications, partly due to some medications no longer being under patent.

Expenditure on MBS-subsidised mental health-specific services and mental health-related medications provided through the PBS accounted for $1.8 billion or 50.3% of the total Australian Government expenditure on mental health-related services in 2018–19 (Figure EXP.2). The next largest component was spending on National programs and initiatives managed by the Department of Health (24.0%), the Department of Veterans’ Affairs (6.6%), the Department of Social Services (5.9%), and Private Health Insurance Premium Rebates (4.6%). Since 2007–08, there has been an overall decrease in the Government cost of PBS mental health-related prescriptions and an increase in MBS-subsidised services and programs and National programs and initiatives. Medication prices can reduce for a variety of factors (for example, Price Disclosure or statutory price reductions due to patent changes – legislation mandated by the Government to reduce the PBS listed price of drugs), refer to the Mental health-related prescriptions section and PBS.gov.aufor more information on the PBS or RPBS. Technical information regarding the calculation of these figures can be found in the data source section.

Figure EXP.2: Australian Government expenditure ($) per capita, on mental-health related services, constant prices, 2007-08 to 2018-19

Stacked vertical bar chart showing the per capita spending by the Australian Government on specialised mental health services between 2008–09 and 2018–19. Spending Expenditure increased for Medicare Benefits Schedule, National programs and initiatives, Research, Private health insurance premium rebates and the National Mental Health Commission.  Expenditure decreased for the Pharmaceuticals Benefit Scheme and mental health specific payments to states and territories. Refer to table EXP.31.

Source data: Expenditure on mental health-related services 2018–19 tables (518KB XLSX).

Australian Government expenditure on Department of Defence funded mental health programs has increased by an average of 6.4% per year for the period 2014–15 ($44.9 million) to 2018–19 ($57.6 million), adjusted for inflation. The expenditure covers a range of mental health programs and services delivered to Australian Defence Force (ADF) personnel. When the number of permanent ADF personnel is taken into consideration (58,058 people; Department of Defence 2019) this equates to $992 per permanent ADF member in 2018–19.

Australian Government expenditure on Medicare-subsidised mental health-specific service

Australian Government expenditure on Medicare-subsidised mental health-specific services

Throughout this section, Medicare-subsidised mental health-specific services refers to the mental health-specific services subsidised by the Australian Government through the Medicare Benefits Schedule (MBS). These services include mental health-specific services provided by psychiatrists, general practitioners (GPs), psychologists (both clinical and other), and other allied health professionals and are defined in the MBS. Refer to the data source section for further information on the estimation of GP expenditure prior to 2007–08.

In 2019–20, $1.4 billion was paid in benefits for Medicare-subsidised mental health-specific services, equating to 5.4% of total MBS expenditure ($25.0 billion - including Dental Benefits Schedule and the Child Dental Benefits Schedule)  (SA 2020). Expenditure for services provided by psychologists ($609 million or 45.0%) made up the largest proportion, comprising mostly Psychological Therapy Services (clinical psychologists; $334 million) and Focussed Psychological Strategies (other psychologists; $275 million). Expenditure on services provided by psychiatrists was the next largest expenditure group ($389 million or 28.8%). GP expenditure comprised $317 million (23.4%) of total Medicare subsidised mental health-related benefits.

Nationally, benefits paid for Medicare-subsidised mental health-related services averaged $52 per person in 2019–20, a small increase on the $51 per person in 2018–19 (adjusted for inflation to 2018–19 prices) (Figure EXP.3). The average benefits paid per person was highest in Victoria ($58 per person, adjusted for inflation), and lowest in the Northern Territory ($17 per person).

Figure EXP.3: Australian Government expenditure ($) per capita Medicare-subsidised mental health-specific services, constant prices, by provider type, 2019-20

Stacked vertical bar chart showing the Australian Government per capita expenditure on Medicare-subsidised mental health-specific services by provider type and states and territories in 2019–20. There was no consistent trend across the states and territories as to which provider had the highest per capita expenditure, with psychiatrists, clinical psychologists and general practitioners all having the highest per capita expenditure in at least one state or territory. Per capita expenditure for Other allied health was the lowest of all providers in every state and territory.

Source data: Expenditure on mental health-related services 2018–19 tables (518KB XLSX).

There was an average annual increase of 3.6% in the total expenditure on Medicare-subsidised mental health-specific services (adjusted for inflation) between 2015–16 and 2019–20. This change equates to an average annual increase (per person) in spending of 2.0%, adjusted for inflation, from $48 in 2015–16 to $52 in 2019–20.

Australian Government expenditure on mental health related subsidised prescriptions

Australian Government expenditure on mental health-related subsidised prescriptions under the PBS and RPBS was $566 million, or $22 per person in the Australian population, in 2019–20. This was equivalent to 4.4% of all PBS and RPBS subsidies ($13.0 billion) (SA 2020). Prescriptions for antipsychotics (48.1%) and antidepressants (32.5%) accounted for the majority of mental health-related PBS and RPBS expenditure in 2019–20, followed by prescriptions for psychostimulants, agents used for Attention-deficit hyperactivity disorder (ADHD) and nootropics (13.1%), anxiolytics (4.1%) and hypnotics and sedatives (2.2%).

When adjusted for inflation, Tasmania ($28 per person) had the highest per capita cost of PBS/RPBS medications, and the Northern Territory ($14) the lowest, compared with the national per capita cost of $22 (Figure EXP.4). For most states and territories, the cost of antipsychotics was the largest proportion of PBS/RPBS costs, followed by antidepressants, except for Tasmania where the cost of antidepressants was slightly more than antipsychotics.

Figure EXP.4: Australian Government expenditure ($) per capita, mental health-related medications subsidised under the PBS/RPBS, constant prices, by type of medication prescribed (ATC group), states and territories, 2019-20

Stacked vertical bar chart showing the Australian Government per capita expenditure on mental health-related medications subsidised under the PBS/RPBS by type of medication prescribed and states and territories in 2019–20. The highest per capita spend was on Antipsychotics in all states and territories, except for Tasmania where Antidepressants was the highest. Hypnotics and sedatives had the lowest per capita spend across all states and territories. Refer to Table EXP.28.

Source data: Expenditure on mental health-related services 2018–19 tables (518KB XLSX).

Nearly two-thirds (61.8% or $350 million) of the expenditure on mental health-related subsidised prescriptions was for prescriptions issued by GPs. This was followed by prescriptions written by psychiatrists (14.8% or $84 million), with non-psychiatrist specialists’ prescriptions accounting for 9.3% ($53 million).

Real expenditure (constant prices) for mental health-related prescriptions declined between 2015–16 and 2019–20, from $595 million to $561 million. This was the result of a decrease in the subsided cost of some medications rather than a reduction in prescribing. The subsidised and total number of mental health-related prescriptions grew at annual average rates of 1.1% and 3.4% per year respectively over this period (see table PBS.12). Medication prices can reduce for a variety of reasons (for example, price disclosure); refer to the Mental health-related prescriptions section for more information.