Government health spending increases as Covid lingers

This year, Australia has spent a total of $241.3b on healthcare goods and services, which is a six per cent increase from 2021.

So far from last year, a total of $241.3b has been spent on healthcare goods and services – an average of $9,365 per person, or an extra $484 per person, compared to 2021.

The new Australia Institute of Health and Welfare (AIHW) health expenditure report also found individuals spent $33.7b on their personal healthcare.

Federal government has increased the spending by 8.6 per cent from $8.4b to $105.8b in total – more than double the annual average growth rate of 3.5 per cent, and higher than the 2020-21 Covid-19 spending increase of 7.6 per cent.

State and territory governments spent 11 per cent ($6.9b) more on health, a combined total of $70.2b, compared to the average growth rate of 4 per cent.

AIHW spokesperson Geoff Callaghan said there are a number of factors that could contribute to spending on healthcare.

"It is likely that Covid restrictions and temporary suspension of non-urgent elective surgery and non-essential treatments in most states and territories resulted in lower spending by individuals, private health insurance providers, and other non-government entities in 2021–22," he said. 

The greatest increase in recurrent spending, $8.3b or 10.9 per cent, was in primary healthcare, which AIHW has associated with pandemic costs such as vaccines and personal protective equipment.

Recurrent spending on hospitals increased by 4.6 per cent ($4.2b) to $96b, partially driven by an increase in Covid hospitalisations during the 2020-21 period.

The National Partnership on Covid Response (NPCR) saw $6.6b of federal government spending: $1.9b on hospital services payments (28 per cent), $4.3b on state public health payments (65 per cent) and $400m on private hospital financial viability payment (6.7 per cent).

State and territory governments funded a combined $1.9b on hospital services payments and $4.3b on state public health payments to meet a national wide spend of $12.8b on Covid services.

The Department of Health and Aged Care spent $12.1b on Covid responses outside the NPCR in 2021-22, up from $6.2b in 2020-21 and up again from $1.7b in 2019-20.

Of the 2021-22 figures, 44 per cent ($5.4b) was spent to fund vaccinations, 31 per cent ($3.8b) to deliver other Covid-related medical services and the remainder funded various other Covid needs such as supplying medical goods and equipment.

Non-government sources reduced their spending to $65.3b; over half of which was from individuals ($33.7b), with $17.5b from insurance providers and $14.2b from other non-government sources.

All figures have been adjusted for inflation.

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