Better health and ageing for all Australians

Aboriginal and Torres Strait Islander Health Performance Framework (HPF) 2012

Tier 3—Sustainable—3.21 Expenditure on Aboriginal and Torres Strait Islander health compared to need

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Why is it important?:

A basic principle of equity is that health expenditure should reflect the relative needs for health services. Health expenditure for population groups with higher levels of need should be proportionately higher. A broad assessment of how well the principle is implemented is provided by comparing differentials in health status with differences in per capita health expenditure. A 2004 literature review estimated that the additional expenditure required to achieve equitable access to effective health care for Indigenous Australians was 3–6 times higher than expenditure levels at the time (Dwyer et al. 2004).

Findings:

On a per-person basis, average health expenditure for Aboriginal and Torres Strait Islander peoples in 2008–09 were estimated to be $6,787, which was $1.39 for every $1.00 spent per non-Indigenous Australian. Expenditure was $1.31 per person in 2006–07, indicating expenditures for Indigenous Australians increased at a greater rate than for non Indigenous Australians over this period. When first estimated in 1995–96, expenditure was $1.08 per person. Some of the change since that time will reflect improvements to the accuracy and quality of estimates, rather than actual expenditure increases.

During 2008–09, Australian governments provided an estimated 91% of the funding used to pay for health goods and services for Aboriginal and Torres Strait Islander peoples compared with 70% for other Australians. Those on lower incomes rely more on publicly provided services and spend less money on private services than people with higher incomes and are much more likely to present to hospitals, even for primary health care (Deeble 2009). In 2004–05, public expenditure per Indigenous person was almost the same as that for all Australians in the same income group (Deeble 2009).

Australian Government funding was low for Medicare and medication and high for community health services. Per person funding provided by the Australian Government for Aboriginal and Torres Strait Islander peoples was $1,673 compared with $1,418 for other Australians, a ratio of 1.18:1. Per person funding provided by state and territory governments for Aboriginal and Torres Strait Islander peoples was $4,758 compared with $1,914 for other Australians, a ratio of 2.5:1, with the greatest expenditure in public hospitals followed by community health services.

Estimated expenditure per Aboriginal and/or Torres Strait Islander person by state and territory governments vary across jurisdictions, with the highest expenditures per person in the NT. Most variation between jurisdictions is explained by differences in the proportion of Indigenous people in the state living in remote and very remote areas. For the main programs, in 2008–09, expenditures were an estimated $5,694 per Indigenous Australian in remote and very remote areas compared with $3,791 in outer regional, $3,036 in inner regional areas and $3,188 in major cities. The higher expenditures in rural and remote areas are largely related to hospital services and OATSIH grants to ACCHOs, and partly reflect higher costs of delivering health care services in those areas (AIHW 2011e).

Medical Benefits Schedule (MBS) expenditure per person was higher for non Indigenous Australians than for Indigenous Australians across all remoteness areas. The gap for expenditure between Indigenous and non Indigenous Australians was greatest in inner and outer regional areas and was smallest in remote areas. PBS expenditure per person was lower for Indigenous Australians in all non-remote areas, with the biggest expenditure gap occurring in outer regional areas. PBS expenditure per person was higher for Indigenous Australians in remote areas (see measure 3.15).

The cost per hospital separation was higher for Indigenous Australians than non-Indigenous Australians. The greatest difference was due to non-communicable diseases such as genitourinary diseases (including dialysis) and injuries. However, there was higher expenditure per person for non-Indigenous people for treatment of neoplasms and musculoskeletal and connective tissue disorders. For expenditure on potentially preventable hospital separations, the greatest difference is attributable to chronic conditions such as diabetes complications and chronic obstructive pulmonary disease (AIHW 2011e).Top of Page

In 2008–09, expenditure for primary health care services was $3,083 per person for Aboriginal and Torres Strait Islander peoples compared with $2,201 for other Australians. Primary health care expenditure on medical services, including those paid through the MBS, was $328 per person for Aboriginal and Torres Strait Islander peoples compared with $517 for other Australians. Per person expenditure on pharmaceuticals in the primary care sector was also much lower for Aboriginal and Torres Strait Islander peoples ($294 versus $644). Per person expenditure on community health services was seven times higher for Indigenous Australians ($1,510 per person compared with $218 per person for other Australians). Community health expenditure accounted for $823 million in 2008–09 or 49% of total primary health care expenditure for Indigenous Australians. Per person expenditure on dental services for Aboriginal and Torres Strait Islander peoples was 40% lower than that for other Australians.

Australian Government Indigenous-specific health program expenditure through the OATSIH has increased from $115 million in 1995–96 to $624 million in 2010–11, a growth in real terms of 265%.

In 2008–09, expenditure for secondary and tertiary health care services (excluding residential care) was $3,493 per person for Indigenous Australians compared with $2,080 for other people. Hospital expenditure is the largest single expenditure item in secondary/tertiary health care services, accounting for $3,135 per Indigenous Australian. Expenditure on secondary/ tertiary care medical services (mainly specialist care) was estimated to be $161 per person for Aboriginal and Torres Strait Islander peoples compared with $407 per person for other Australians.

Implications:

There has been an increase in Aboriginal and Torres Strait Islander health expenditure and this expenditure had increased at a faster rate than for other Australians. On a per person basis, average health expenditure for Indigenous Australians in 2008–09 was 39% higher than for other Australians. However, Indigenous Australians are currently experiencing rates 200% as high as other Australians on a range of health measure such as mortality rates and prevalence of disease.Top of Page
Figure 197—Estimated per person health expenditure ratio of Indigenous to non-Indigenous Australians, 1995–96 to 2008–09
Figure 197—Estimated per person health expenditure ratio of Indigenous to non-Indigenous Australians, 1995–96 to 2008–09
Source: AIHW 2005, AIHW 2008, AIHW 2009, AIHW 2011
Figure 198—Estimated state and territory health expenditure per person, by Indigenous status, 2008–09

Figure 198—Estimated state and territory health expenditure per person, by Indigenous status, 2008–09Top of Page
Source: AIHW 2011
Figure 199—Expenditure by the Australian Government on Indigenous-specific health programs, 1995–96 to 2010–11
Figure 199—Expenditure by the Australian Government on Indigenous-specific health programs, 1995–96 to 2010–11
Source: Australian Government Department of Health and Ageing
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Figure 200—Average health expenditure per person for primary health care and secondary/tertiary health care services, by Indigenous status, 2008–09
Primary Health Care
Figure 200—Average health expenditure per person for primary health care and secondary/tertiary health care services, by Indigenous status, 2008–09 - Primary Health Care
Secondary/Tertiary Health CareTop of Page
Figure 200—Average health expenditure per person for primary health care and secondary/tertiary health care services, by Indigenous status, 2008–09 - Secondary/Tertiary Health Care
Source: AIHW 2011
Figure 201—MBS(a) expenditure per person, Indigenous and non-Indigenous Australians, by remoteness areas of patient’s residence, 2008–09
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Figure 201—MBS(a) expenditure per person, Indigenous and non-Indigenous Australians, by remoteness areas of patient’s residence, 2008–09
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(a)Excludes the following: allied health services, optometry and dental services.
(b)Includes general practitioners and vocationally registered general practitioners.
Source: AIHW 2011. Expenditure on health for Aboriginal and Torres Strait Islander people 2008–09—An analysis by remoteness and disease; Supplementary table 2
Figure 202—Health expenditure per person on selected health services(a), Indigenous and non Indigenous Australians, by remoteness area of patient’s residence, 2008–09

Figure 202—Health expenditure per person on selected health services(a), Indigenous and non Indigenous Australians, by remoteness area of patient’s residence, 2008–09
(a)Excludes health expenditure on: non-admitted patient services, patient transport, dental services, community health other than ACCHO
(b)MBS excludes allied health services, optometry and dental services.
(c)PBS excludes RPBS, and highly specialised drugs dispensed from public and private hospitals.
Source: AIHW 2011. Expenditure on health for Aboriginal and Torres Strait Islander people 2008–09—An analysis by remoteness and disease; Supplementary table 1
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