Specialised mental health services expenditure

Recurrent expenditure

Around $6.0 billion was spent on state and territory specialised mental health services in 2017–18. The largest proportion of this recurrent expenditure was spent on public hospital services for admitted patients ($2.6 billion), comprising of public acute hospitals with a specialist psychiatric unit or ward (almost $2.1 billion) and public psychiatric hospitals (almost $0.6 billion). This was closely followed by expenditure on community mental health care services totalling $2.3 billion.

Per person expenditure on specialised mental health services ranged from $228 per person in Victoria to $315 per person in Western Australia, compared to a national average of $244 per person during 2017–18.

Expenditure on state and territory specialised mental health services, adjusted for inflation, increased by an average annual rate of 2.9% between 2013–14 and 2017–18. This equates to an increase of about $12 per person, from about $231 in 2013–14 to about $244 in 2017–18.

Detailed expenditure data are available covering 25 years to 2017–18. Figure EXP.1 shows the changes in state and territory spending patterns, for example, increased investment in community mental health care services, reflecting changes to the state and territory specialised mental health service profile mix over this time. Further information can be found in the  Specialised mental health care facilities section.

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Figure EXP.1 Alternative text - Source data: Expenditure on mental health services tables (496KB XLS).


The majority (96.9% or $5.9 billion of the $6.0 billion total cost) of funding for state and territory specialised mental health services was provided by state or territory governments in 2017–18. However, this estimate does not take into account the Australian Government payments to states/territories for the running of public hospital services which includes the community-based clinical services managed by public hospitals. Refer to the data source section for technical information regarding Australian Government expenditure.

Public sector specialised mental health hospital services

The $2.6 billion of recurrent expenditure for public sector specialised mental health hospital services during 2017–18 equates to an average cost per patient day of $1,178. The Northern Territory ($1,816) had the highest average cost per patient day, while the average cost in Queensland ($1,031) was the lowest.

Recurrent expenditure on public sector specialised mental health hospital services can be further described using  target population (General, Child and adolescent, Youth, Older person and Forensic target groups), program type (acute and non-acute) or a combination of these.

Target population and program type

Mental health services classified as having a General target population ($1.9 billion or 72.5%) accounted for the majority of recurrent expenditure for public sector specialised mental health hospital services during 2017–18. Child and adolescent services ($2,106 per patient day) had the highest costs per patient day, continuing a long term trend of these services costing more to run than services with General target population ($1,162 per patient day), Older person ($1,029 per patient day) and Forensic ($1,208 per patient day) services.

There was an average annual increase in expenditure per patient day for General (1.9%), Child and adolescent (3.5%), Older person services (3.7%), and Forensic services (0.8%) between 2013–14 and 2017–18, adjusted for inflation.

Average patient day costs for acute public sector specialised mental health hospital services at the national level were higher than those for non-acute services for all target population categories in 2017–18.

Community mental health care services

Community mental health care services accounted for $2.3 billion of recurrent expenditure on mental health services during 2017–18, representing 37.3% of total state/territory expenditure in 2017–18.

Residential mental health services

Of the $374 million spent on residential mental health services during 2017–18, the majority was spent on 24-hour staffed services ($331 million or 88.6%). General services ($262 million) accounted for more than two thirds (70.1%) of the total residential expenditure.

The average national cost per patient day for residential mental health services was $480 per day in 2017–18. Average costs varied between states and territories, ranging from $328 per patient day in Western Australia to $742 per patient day in the Australian Capital Territory.

Expenditure by target population

Recurrent expenditure for public sector specialised mental health hospital, community and residential services can be combined and presented by target population. Expenditure on General services ($239 per person) was the highest of the 5 target populations during 2017–18, reflecting that many jurisdictions do not have the other specialised target population hospital services which contribute substantial costs to the overall expenditure profile. Adjusted for inflation, per capita expenditure between 2013–14  and 2017–18 has increased slightly for General, Child and adolescent and Forensic services while per capita expenditure on Youth services increased by an average of 16.3% per year. Over this time period, per capita expenditure on Older person services decreased by an average of 1.8% per year. This average annual decrease is likely because expenditure on Older persons services has not increased to the same extent as the increases in the Older persons population. For example, while the adjusted expenditure on Older person services increased 5.8% to $580 million between 2013–14 and 2017–18, the Older person population (65 years and over) increased by 13.8% to 4.0 million people over the same period.

Private hospital specialised mental health services

Total revenue for specialised mental health private hospital services was $735 million in 2017–18, and the non-Commonwealth sourced component of this revenue was $544 million. Adjusted for inflation, these represent annual average increases from 2013–14 of 7.1% and 8.2% per year respectively. Expenditure on specialised mental health services in private hospitals was not available for 2017–18 due to changes in how the data is collected (see below), however historically this has been about 80% of revenue (averaged over 25 years), and was about 78% in 2016–17.

In previous years, estimates of expenditure on specialised mental health services in private hospitals were derived from the annual Private Health Estabishment Collection (PHEC) undertaken annually by the Australian Bureau of Statistics. PHEC was discontinued after 2016–17. Commencing 2017–18, estimates of private psychiatric hospital care are based on the Private Psychiatric Hospitals Data Reporting and Analysis Service (PPHDRAS), a collection jointly funded by the Australian Private Hospitals Association and the Australian Government Department of Health. See the Data Source section further information.