Expenditures on health for Aboriginal and Torres Strait Islander peoples, 2001-02

The main conclusion from this third study into expenditure on health for Aboriginal and Torres Strait Islander peoples is that the relative position of Indigenous Australians compared with non-Indigenous people has changed little since the previous report for 1998–99. This finding relates to both their shares of national health spending and the structure of health expenditures. Indeed, there have been only small changes since the first report for 1995–96. However, health expenditure for both Indigenous and non-Indigenous people has risen substantially. In 2001–02:

• Aboriginal and Torres Strait Islander peoples comprised 2.4% of Australia’s population. (Chapter 1)
• Total expenditures on health services for Aboriginal and Torres Strait Islander peoples were estimated at 2.8% of national health expenditures, having risen from 2.6% in 1998–99. Estimated expenditure on health for Indigenous people rose markedly, from $1,356.1 million in 1998–99 to $1,788.6 million in 2001–02. (Chapter 2)
• Average expenditures per Indigenous person were estimated at $3,901 in 2001–02. That was 18% more than the $3,308 per person spent on the non-Indigenous population. However, because Aboriginal and Torres Strait Islander peoples relied heavily on publicly funded health care providers, government expenditures were much higher for them than for other people—$3,614 per person compared with $2,225, or 62.4% more. The relatively small differential between average health expenditures on Indigenous and non-Indigenous people reflects both differences in the volume and mix of health goods and services provided to the two groups and differences in the average costs of providing those services. A greater proportion of the Indigenous population live in remote and very remote regions where service delivery costs are greater, but the types of services that they access, on average, involve lower costs. For example, while their average rate of separation from hospitals is about double that of non-Indigenous people, lower-cost interventions, such as dialysis, make up a larger proportion of those separations than in the case of non-Indigenous people.
• The Australian Government provided 43.1% of the total funding for Indigenous health expenditures, the state and territory governments provided 49.5%, and 7.3% came from non-government sources, including out-of-pocket payments. The corresponding figures for non-Indigenous people were 47.8% from the Australian Government, 19.5% from the states and territories and 32.7% from private sources.
• An estimated 70.5% of expenditures were through programs managed by the state and territory governments; 23.4% were through Australian Government programs; and the remaining 6.2% were for services that were essentially the responsibility of non-government providers.
• Hospital services, of all kinds, accounted for 47.5% of Indigenous health expenditures, compared with 34.2% of the spending on other people. Community health services and public health activities, including those through Aboriginal Community Controlled Health Services (ACCHSs), absorbed another 24.6% compared with 4.5% for non-Indigenous people.
• A number of factors should be noted when reviewing changes over time, including that the methodology for developing estimates has changed, the Australian average reflects variations in jurisdictional expenditure and the actual figures may be higher or lower than the estimates published in this report. Thus, caution should be exercised when interpreting changes in expenditures over time.
• Given these reservations, the ratio of Indigenous to non-Indigenous estimated expenditures per person in 2001–02 (1.18:1) was marginally lower than in 1998–99 (1.22:1). This reflects the faster expenditure growth in the types of health services of which Indigenous people use less (such as those funded through private health insurance).
• Estimates of average expenditures per person for Indigenous Australians increased in real terms by 16.9% between 1998–99 and 2001–02 (Chapter 3). This was lower than the increase for non-Indigenous people of 18.8% over the same period.
• Indigenous people were low users of mainstream medical and pharmaceutical services covered by Medicare and the Pharmaceutical Benefits Scheme. Per person, Medicare benefits for Indigenous people were 39% of the non-Indigenous average and PBS benefits were 33%. (Chapter 4)
• Expenditure on services provided to admitted patients in acute-care hospitals represented over half (52.5%) of state/territory expenditure for Indigenous Australians, lower than for the non-Indigenous population. (Chapter 5)
• Indigenous Australians were also low users of private dental and other professional services and of privately provided health aids and appliances. A possible contributor to the low rate of expenditure in these areas was the low rate of coverage by private health insurance—only about 15–20% of Indigenous people had private health insurance cover. (Chapter 6)
• Although the regional analysis was limited to a number of major programs, there was evidence that a combination of higher usage and costs resulted in much higher expenditures on Indigenous people in the outer-regional and remote/very remote areas than in the major cities. And the hospital use data accorded with it. At 489 per 1,000 population, the overall rate of acute hospital admissions/separations for Indigenous people was 45.0% higher than for non-Indigenous people. There was little difference between the two population groups in the cities, but in the outer-regional and remote areas Indigenous separation rates were between 87.7% and 165.2% higher. Hospitals played a much different role for Indigenous Australians in those areas. (Chapter  7)
• For the first time, this report includes some estimates of health-related welfare payments for Aboriginal and Torres Strait Islander peoples—specifically expenditures on welfare services for older people and for people with a disability. These expenditures are, however, outside the estimates of health expenditure as conventionally defined. At an estimated $151.8 million, these expenditures were equivalent to 8.5% of health expenditures. (Chapter 8)
• A number of recommendations to improve subsequent reports are provided, including recommendations for improving the quality of the data and the timeliness of reporting. (Chapter 9)