Nearly $11b spent on mental and substance use disorders annually

Mental and substance disorders are catching musculoskeletal disorders, cardiovascular disease and cancers as the diseases that attract the most spending, a new Australian Institute of Health and Welfare (AIHW) report shows.
 
A separate report, released last month, also reveals how Australia’s healthcare funding is divided between primary care and hospitals, as well as government contributions for both parts of the healthcare system.
 
Here, newsGP looks at the figures, and considers where and how healthcare funding is likely to be distributed in the future based on current trends.
 
Disease expenditure
Musculoskeletal disorders ($14.6 billion), cardiovascular disease ($12.7 billion ) and cancers ($12.1 billion) retained the top three spots for disease expenditure in 2019–20, while mental and substance use disorders ($10.8 billion) overtook injuries ($10.7 billion) for the first time.
 
Over one third of total disease spending went towards the four conditions combined.
 
Dr Cathy Andronis, Chair of RACGP Specific Interests Psychological Medicine, told newsGP there is a practical benefit to ranking disease costs this way.
 
‘Calculating costs is useful in a competitive and consumerist world as unfortunately this is increasingly the only way to get governments and the community to reassess priorities,’ she said.
 
Within general practice, spending on mental and substance abuse disorders ranks even higher, with $1.2 billion – equivalent to 11% of total expenditure – allocated to this area, second only to infectious diseases ($1.4 billion), a figure highly impacted by the COVID-19 pandemic.
 
Dr Andronis says the increased spending on mental health paints a mixed picture, as while it points to a significant burden of disease, it also indicates that there is recognition of ‘the toll of daily life on our collective wellbeing’.
 
However, she believes it is not enough to simply rank which diseases attract the most spending.
 
‘We are disconnected and lonely as well as exhausted and desperately need a wakeup call,’ she said.
 
‘It’s not just doctors who are burnt out – people everywhere are at breaking point just trying to deal with the social pressures of competitive, consumer-focused lifestyles that are insidiously damaging our protective relationships and interfering with rest and relaxation.
 
‘The pandemic just magnified the increasing emotional and financial stress under which we have all been suffering for many years. Lots of GPs in mental health could see this coming unfortunately, so it’s good that government spending has caught up with the reality, even if Medicare rebates have not.’
 
Dr Andronis says the increased spending is a sign of the ballooning community burden of mental health and substance disorders.
 
‘This is extremely worrying,’ she said. ‘Especially when people turn to substances as a coping mechanism.’
 
For Dr Hester Wilson, Chair of RACGP Specific Interests Addiction Medicine, a critical question is whether or not the funding for substance use is well placed.
 
‘How much of it is focused on prevention, which is unsexy?’ she told newsGP.
 
‘High-cost illnesses are the chronic ones, so prevention is best for this and that’s where we need to put the finances instead of a hospital bed or tertiary sector when people are already unwell.’
 
Dr Wilson says raising awareness that more funding is going to mental and substance use disorders is a good thing, but that more targeted prevention is vital.
 
‘We need pill testing at festivals, [and] more information about drugs and substances so people can make better informed decisions about taking them,’ she said.
 
‘Creating access to treatment, particularly in regional Australia, and decriminalisation of drugs [are also important steps].’
 
The areas of spending for 2019–20 include $87.9 billion for hospital services, $39.7 billion for primary healthcare services and $12.8 billion for referred services, such as imaging and pathology.
 
Health expenditure
Separate to disease expenditure, which breaks down costs per disease, the AIHW also recently released Health expenditure in Australia 2020–21, which reports how much was spent, the areas of health goods and services that received money, and who funded it.
 
For the year 2020–21, approximately $220.9 billion was spent on health goods and services, equating to $8617 per person.
 
During 2020–21, an estimated $89.7 billion was spent on Australia's public and private hospitals, with $38.4 billion funded by state and territory governments and $33.1 billion by the Federal Government. The remaining $18.2 billion came from non‑government sources.
 
For the same period, $73.4 billion was spent on primary healthcare. Of this, the Federal Government spent $33.5 billion, non-government entities $27.6 billion, and state and territory governments $12.3 billion.
 
Dr Cathryn Hester, RACGP Expert Committee – Funding and Health System Reform member, told newsGP it is interesting to reflect on the federal–state healthcare funding divide.
 
‘Sometimes there seems to be a reluctance of the states to accept that primary care is something that also needs their funding attention,’ she said.
 
‘We can see from the data that the Federal Government spends almost an equal amount on public hospitals as it does on primary care [about $33 billion].
 
‘This is slightly less than the states contribute to public hospitals [approximately $37 billion] but much larger than what the states spend on primary care [approximately $12 billion], which does not reach mainstream general practice and is mainly a funding stream for rural hospitals.
 
‘If the states are interested in the health outcomes of their communities while achieving cost efficiencies, the first place they could look to achieve this is in appropriately supporting general practice.’

Dr Hester Wilson says more funding needs to be targeted at preventing substance use disorders.
 
Dr Hester also pointed out that hospital spending growth has greatly outstripped increases in general practice funding, even when taking into account the costs of providing COVID vaccinations and management.
 
‘General practice has been running on the funding equivalent of an oily rag these last two years,’ she said. ‘It is time for this to be levelled up.’
 
According to the AIHW, $73.4 billion was spent on primary healthcare in 2020–21, an increase of $6.7 billion on the prior year. However only $200 million of that increase went to GPs, with the majority ($4.4 billion) going to public health – including COVID vaccines, masks and other PPE – and dental services ($1.3 billion).
 
‘In the last two years general practice has been the absolute powerhouse of medical care for our communities,’ Dr Hester said.
 
‘There is data from PHNs showing an increase in care provided by GPs in the community at around 150% uplift compared to baseline, and all the while GPs were providing the vast majority of COVID vaccinations and COVID care.
 
‘It is an amazingly cost-efficient service and we should be shouting the achievements of our GPs from the rooftops.
 
‘Our leaders should not waste time trying to work out how to squeeze more sauce from an empty sauce bottle, it is time for appropriate indexing of general practice funding so that our profession can continue to provide exceptional care to our communities.’
 
Future spending
Australia will likely continue to spend more on mental and substance use disorders in the years to come as the effects of the pandemic continue to be borne out, with reports from psychologists that children as young as 18 months old are suffering from mental health disorders.
 
Dr Andronis explains how this has manifested.
 
‘Young people especially have suffered silently,’ she said.
 
‘They have missed out on schooling, socialising with their peers, and many have been stuck at home in difficult household circumstances when they should have been learning to navigate life outside of the home at a critical age for developing social skills, self-confidence and autonomy.
 
‘Social media is a poor substitute for real relating. The consequences will likely continue for years.’
 
Dr Wilson is also seeing the effect of COVID on substance use.
 
‘I certainly saw people drink more over lockdowns, or relapsing alcohol use. Some people drinking at lunchtime when working from home and miserable, stuck at home, and so they end up drinking a bottle of alcohol per day,’ she said.
 
‘Anecdotally, I am seeing an ageing group with a significant dependency too, getting older and sicker and developing chronic diseases of old age at a younger age if they don’t undertake preventive therapies.
 
‘For example, middle-aged professional women drinking more during COVID. Also, retirees drinking more and the risk increases for them due to comorbid issues. They’re more likely to fall and get confused and even a small amount of alcohol in that group can be risky.’
 
Dr Hester says it is the patients who will have to pay for their health while primary care continues to be underfunded.
 
‘Very little of primary care funding actually ends up sitting with general practice. So, whilst GPs are the leaders of any primary care group and are the most efficient segment of primary care, we certainly are not taking the lion’s share of public funding,’ she said.
 
‘We can see from the AIHW health expenditure database that increasingly the funding for primary care is not coming from the federal or state governments, but from individuals.
 
‘This means that patients are increasingly having to put their hand into their pockets to pay for vital care. This was to the tune of nearly $22 billion last year.
 
‘The idea that access to healthcare in Australia is “universally insured” seems to only apply to hospital care at this point, which is an incredible problem and will impact heavily on the health of our communities for years to come.’
 
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AIHW alcohol and other drugs expenditure funding injuries Medicare mental health