Primary Health Care Reform in Australia - Report to Support Australia’s First National Primary Health Care Strategy

Funding for primary health care

Until recently, no estimate has been available on primary health care expenditure in Australia. The AIHW has published an estimate from 2004-05 that $35.5 billion was spent on primary health care services.38 In Australia – 44% of total health expenditure – a similar amount to total spending on hospital care and residential aged care.39 However the definition of primary health care used by the AIHW included medical services, medications, dental services, community and public health services, non-admitted hospital services, aids and appliances, other health practitioners and patient transport. This definition would cover the workforce occupations shown in Table 2, but is likely to cover a broader range of health care workers than those included in that table. The expenditure data is not reported in sufficient detail to allow a more accurate matching with workforce data. The data also covers areas which may not generally be considered primary health care such as non-admitted hospital services and patient transport.

Figure 4 shows the indicative source of AIHW-estimated primary health care funding. Just under half of primary health care funding (47%) is provided by the Australian Government. Almost half is for medical services and one third for medications. States and territories contributed 17% for community health and non-admitted hospital patients, and non-government/private health insurance/individuals contributed 36% mainly for dental services, medications, medical services and aids and appliances.

Figure 4: Indicative source of primary health care funding, Australia, 2004-05


Figure 4: Indicative source of primary health care funding, Australia, 2004-05

Source: AIHW, Expenditures on health for Aboriginal and Torres Strait Islander peoples, 2004-05

A significant proportion of primary health care services in Australia are funded through the MBS. In 2007-08, Medicare subsidised a total 279 million medical services at a cost of $13 billion, close to 13% of total health spending. 43% of MBS services and 37% of benefits paid were for primary health care services. 92% of MBS primary care services are provided by GPs.

In recent years, the number of primary health care services provided under Medicare has been growing at well above the rate of population growth (1.4% a year). The number of primary health care services grew by 5% a year between 2003-04 and 2007-08 while MBS benefits paid increased from $2.9 billion to $4.8 billion over the same period, an average annual growth rate of 13.8% a year.

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38 This report defines primary health care services as those provided to whole populations (public health and community health services) plus those rendered in, or flowing from, a patient-initiated contact (GP consultations, hospital emergency attendances, GP-ordered investigations and prescriptions, over-the-counter medicines and so on). Secondary/tertiary services can be defined within the system by referral or hospital admission.

39 Deeble J, Shelton Agar J & Goss J, 2008. Expenditures on health for Aboriginal and Torres Strait Islander peoples 2004–05, AIHW cat. no. HWE 40, AIHW, Canberra.

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Page last updated 31 August, 2009