Governments spend billions more on hospitals than general practice

Morgan Liotta

29/01/2021 4:52:49 PM

Despite a rise in general practice investment, public hospitals still receive six times more funding.

Drawing of money and healthcare on scales
Health expenditure on general practice versus hospitals remains imbalanced.

For the most recent year of available data, the Productivity Commission’s 2021 Report on Government Services shows that federal, state and territory government expenditure on the heath sector was estimated at $115 billion.
This figure accounts for nearly half (41.6%) of all government spending on services covered in the report.
In 2019–20, total expenditure on general practice was $10.3 billion, up from $10 billion in 2018–19 and $9.9 billion in 2017–18.
There was also an increase in expenditure per person for GP visits at $405.20, compared to $397.40 per person in 2018–19.
The number of GP-type services used per person has also increased from 6.7 to 6.8 in 2019­–20.
Despite a growth in government investment in general practice – answering ongoing calls from the RACGP – public hospital expenditure per person continues to rise, a trend carrying on from previous years.
Total expenditure on public and private hospitals was $79 billion in 2018–19. This funding includes 78% from federal, state and territory governments, and 22% from non-government sources (including patients, private insurance and other).
In 2018–19, total government recurrent expenditure on public hospitals (including psychiatric services) per person was $2851 – an increase from $2786 in 2017–18.
The Australian Institute of Health and Welfare (AIHW) 2018–19 expenditure report also showed that the percentage of total government spending on hospitals rose from 45.27% to 46.13% in 2018–19, while the percentage of expenditure on GPs fell from 7.47% to 7.37%.
The majority of government and non-government health spending in this period went on hospitals (40.4%) followed by primary healthcare (33.5%).
Calculations from the Productivity Commission’s report and AIHW data show that total government expenditure on hospitals is six times more than on general practice.
Dr Michael Wright, Chair of the RACGP Expert Committee – Funding and Health System Reform, is not surprised by the new data.
‘What the report shows is that although there is a small increase per person on GP services, which is a good sign, the increase in hospital spending exceeds this,’ he told newsGP.
‘Once again, hospital costs are rising faster than the costs of GP services – and GP services continue to be relatively underfunded.’
Dr Wright said that it is ‘unfortunate’ that the majority of increases tend to still go towards hospital services.
‘These increases are still rising quicker than for general practice, even at a time when health reform is trying to strengthen primary care,’ he said.
Other health services data outlined in the report includes:
GP workforce in 2019

  • The total number of GPs has increased from 36,858 in 2018 to 37,472
  • Full-time equivalent (FTE) GPs have also increased from 28,346 to 29,854
  • The proportion of FTE GPs aged >65 has increased from 12.8% to 13.3%
  • The proportion of GPs aged <35 has decreased from 9.8% to 9.4%
  • Attrition rates of GPs across age brackets show the highest percentage (3%) in those aged >65, and lowest percentage (0.5%) in those aged 45–54
Pharmaceutical Benefits Scheme in 2019–20
  • Expenditure on the PBS and Repatriation PBS was $8.8 billion on Section 85 prescription medicines filled at pharmacies
  • PBS total expenditure per person was $334.40, up slightly from $330.70 in 2018–19
General practice services delivered in 2019–20
  • Bulk billing of non-referred attendances increased among patients aged 0–15 years and >65 years, while the percentage of patients bulk billed in the 16–64 age group remained unchanged from 82.4% in 2018–19
  • Over the past five years, GPs have delivered 83.6% of valid vaccinations reported to the immunisation register
  • Of the 4.2 million flu vaccination doses distributed for people aged >65, only 2.9 million were administered and reported to the immunisation register in 2019­–20
Mental health services in 2018­–19
  • Total mental health services expenditure was $10 billion, equivalent to $397.02 per person
  • Medicare Benefits Schedule (MBS)-subsidised services were the largest component of Federal Government expenditure on services for mental health, at $1.3 billion (35.9%)
  • MBS payments comprised psychologists and other allied health professionals (17.1%), consultant psychiatrists (10.3%) and GP services (8.5%)
  • Total expenditure for GPs providing mental health services was $307.1 million
  • Under the PBS for mental health-related medications, the Government spent $517.9 million
Aboriginal and Torres Strait Islander health services in 2019–20
  • This period saw $783.3 million allocated – an increase from $761.2 million in 2018­–19
  • PBS medicines funded to remote and very remote areas was $39.3 million, up from $37.5 in 2018–19
The Productivity Commission states it is important to note that COVID‑19 may affect data in this report in a number of ways, including the impact of the pandemic on service delivery in 2020, and the collection and processing of data.
Reports on hospital data are released one year later, therefore current hospital data, specifically the significant increase in expenditure compared to general practice, is not yet affected by COVID-19.
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