PROVISION OF HEALTH SERVICES

Expenditure on health goods and services

Examining expenditure on health goods and services is one way of understanding the ways in which health resources are delivered and used. Expenditures reflect needs on which resources have been spent, rather than overall needs or needs that have not been met. Expenditures can also provide some broad insights into the use of health services. But any such interpretation must be undertaken with care, because the amount of expenditure incurred for a given level of use can also be affected by factors such as the demographic composition of the population and its geographic distribution. Thus, information about expenditure must be considered alongside the information about the numbers, types and locations of services that are presented in this and other chapters of this report.

In 2004-05, estimated expenditure on health goods and services for Indigenous Australians was $2,304 million or 2.8% of total health expenditure (table 10.1). More than two-thirds (67%) of the 2004-05 expenditure was on publicly provided health services such as public hospitals (46%) and community health services (22%).

10.1 EXPENDITURE ON HEALTH GOODS AND SERVICES, by area of expenditure, current prices - 2004-05
			Total expenditure ($m)		Average per person expenditure ($)
Service			Indigenous	Non-Indigenous	Indigenous	Non-Indigenous	Ratio(a)
Hospitals			1 080.7	27 337.6	2 213	1 386	1.6
	Public hospital services(b)		1 048.6	21 042.7	2 147	1 067	2.0
		Admitted patient services	799.4	16 226.8	1 637	823	2.0
		Non-admitted patient services	249.2	4 815.8	510	244	2.1
	Private hospitals		32.1	6 295.0	66	319	0.2
High-level residential care			41.7	6 283.4	85	319	0.3
Patient transport			103.5	1 369.9	212	69	3.1
Medical services			164.6	14 483.5	337	734	0.5
Community health services			497.8	3 052.7	1 019	155	6.6
Dental and other health practitioners			78.0	7 811.8	160	396	0.4
Medications			109.4	11 056.4	224	561	0.4
Aids and appliances			18.6	2 591.4	38	131	0.3
Public health			88.9	1 350.3	182	68	2.7
Research			46.0	1 669.0	94	85	1.1
Health administration n.e.c.			74.6	2 254.5	153	114	1.3
Total			2 304.0	79 260.4	4 718	4 019	1.2
(a) Average per person expenditure on Indigenous Australians divided by the average per person expenditure on other Australians.
(b) Excludes any dental services, community health services, patient transport services, public health and health research undertaken by the hospital.
Source: AIHW 2008a

On a per person basis, average expenditure on health goods and services for Aboriginal and Torres Strait Islander people was $4,718 - some 17% higher than the expenditure for non-Indigenous people ($4,019). Considering the high level of morbidity among Indigenous Australians, and mortality rates that are more than twice those for other Australians, these figures suggest that expenditures for Aboriginal and Torres Strait Islander people were not sufficient to match needs (AHMAC 2006).

In 2004-05, average expenditure on services for Indigenous people was greater than that for non-Indigenous Australians in a number of program areas. These included community health services (where average expenditure on Indigenous people was 6.6 times higher than for non-Indigenous people), patient transport (over 3.1 times higher) and public health, including prevention of hazardous and harmful drug use, cancer screening and environmental health (2.7 times higher) (table 10.1).

In contrast, average expenditure on some goods and services provided outside public hospitals was lower for Indigenous Australians than for non-Indigenous Australians. For example, average expenditures on high level residential care, medical services, medications, and dental and other health practitioners were less than half of that for non-Indigenous Australians.

Over the nine years to 2004-05, expenditure on health services on a per person basis for Aboriginal and Torres Strait Islander people has been between 14% and 20% higher than for other Australians (AIHW 2008a). A number of factors should be noted when reviewing changes over time, including that the methodology for developing estimates has changed. Thus, caution should be exercised when interpreting changes in expenditures over time.

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