Primary care gets small slice of the funding pie

A new report, prepared by the Australian Institute of Health and Welfare (AIHW), compares key measures of Australia’s health expenditure with the other 35 Organisation for Economic Co-operation and Development (OECD) countries.
 
For most OECD countries, hospitals represented the highest proportion of healthcare expenditure in 2016. Australia spent 44.1% of its health expenditure on hospitals, the 15th highest proportion and slightly above the OECD median (43.6%), and 28.9% on ambulatory services (13th).
 
Australia spent slightly more than 16% on medical goods (the 23rd highest proportion), compared with the OECD median of 18.9%, leaving only 10.7% for ‘other’, which included preventive care, as well as administration and financing.
 
RACGP President Dr Harry Nespolon has previously told newsGP primary care is the most cost-effective element of the healthcare system, yet it remains underfunded.
 
‘We are the most efficient, cheapest part of the healthcare system, the part that sees most people,’ he said.
 
‘Nearly 90% of all Australians [visit] their GP each year – yet general practice only receives 7.4% of all government health expenditure.
 
‘[We should be] trying to improve primary care because we know in the long run that the tertiary and secondary [healthcare] sectors are going to become completely unaffordable and inaccessible for most people.’
 
Overall, Australia spent $6661 per person on healthcare in 2016, of which only $382.10 was spent on general practice. This is the seventh highest amount globally and $1554 more than the worldwide median, but less than half of the $13,527 per person spent in the US.
 
The US also led the health expenditure to gross domestic product (GDP) ratio with 16.1%, while Australia ranked ninth with 9.2%. Australia had dropped to 18th in 2009 and 2010, but an average 5.1% growth in annual healthcare spending during 2014–16 saw it rise again.
 
Between 2001 and 2016, Australia’s total health expenditure increased consistently faster than that of the OECD median, with a higher growth rate in 13 out of 16 years, with the difference particularly pronounced from 2011–2016.
 
However, only around two-thirds of total expenditure from 2000–2016 was derived from government, with the remaining third sourced from voluntary healthcare payments and household out-of-pocket payments. Over this period, Australia’s position among OECD countries ranged between 23rd and 28th in terms of the proportion of government-funded health expenditure, lower than the median.
 
The most recent figures, from 2016, show government and compulsory health insurance agreements contributed about 68% of the total health expenditure in Australia, whereas the OECD median was 75%. Germany had the highest percentage (87%), while Mexico had the lowest (52%).

healthcare expenditure OECD primary care