Expenditure on health for Aboriginal and Torres Strait Islander people 2006-07

Per person health and residential aged care expenditure

• In 2006–07, the per person total health and high care residential aged care expenditure ratio for Aboriginal and Torres Strait Islander people compared to non-Indigenous people was 1.22—that is, $1.22 was spent on health and high care residential aged care per Aboriginal and Torres Strait Islander person for every $1.00 spent per non- Indigenous person.
• This represents growth from 2004–05, where the per person Aboriginal and Torres Strait Islander health and high care residential aged care expenditure ratio was 1.17.
• Part of the increase in the per person Aboriginal and Torres Strait Islander expenditure ratio in 2006–07 from 1.17 to 1.22 may be due to better methods for estimating Aboriginal and Torres Strait Islander health expenditure, particularly for MBS and PBS expenditure (see Box 1). Some of the increase is due to greater growth since 2004–05 for some types of services for Aboriginal and Torres Strait Islander people, particularly for public hospitals.
• The average total health and high care residential aged care expenditure per Aboriginal and Torres Strait Islander person was $5,650 in 2006–07 compared to $4,621 for each non- Indigenous person.
• Total health and high care residential aged care expenditure for Aboriginal and Torres Strait Islander people was estimated at $2,953 million in 2006–07, or 3.0% of national expenditure on health and high care residential aged care services. It was 2.8% in 2004–05.

Public versus private services

• Aboriginal and Torres Strait Islander people are high users of public hospital and community health services, and comparatively low users of medical, pharmaceutical, dental and other health services, which are mostly privately provided, that is, GPs and specialists.
• In 2006–07, around 49.1% of total health and high care residential aged care expenditure for Aboriginal and Torres Strait Islander people was for public hospital services. Around 21% was on community health services—including those provided by Aboriginal health workers, nurses and dentists in Aboriginal Community Controlled Health Organisations.
• In contrast, for non-Indigenous people 28.2% of health and high care residential aged care expenditure was on public hospital services and 3.9% on community health services.
• For the Australian Government schemes of Medicare and the Pharmaceutical Benefits Scheme (PBS):
  • Total Medicare benefits paid per Aboriginal and Torres Strait Islander person was 58% of the amount spent on non-Indigenous people; and
  • Total PBS benefits paid per Aboriginal and Torres Strait Islander person was 60% of the amount spent on non-Indigenous people.
  • There is some evidence to suggest that the lower usage of MBS and the PBS by Aboriginal and Torres Strait Islander people compared to non-Indigenous people is due to a number of issues (particularly for those Aboriginal and Torres Strait Islander people living in remote areas). The lower MBS use may be partly the result of public hospital services substituting for the use of private GP and specialist services.
  • Aboriginal and Torres Strait Islander people have much lower incomes compared to non-Indigenous people and, like low income people everywhere, they therefore use more public hospital services and less private specialist medical services. In 2006 the median equivalised gross household income of Aboriginal and Torres Strait Islander people was $460 per week, around 62.2% of the level earned by non-Indigenous people, which was $740 per week (ABS 2008a).
  • An examination of in-hospital Medicare services benefits indicates that the Aboriginal and Torres Strait Islander share of the $1.7 billion benefits in this area is 0.4%, and the share of out-of-hospital Medicare benefits is 1.6% of the $10.3 billion total. The low in-hospital Medicare benefits reflect the lower rates of private health insurance among Aboriginal and Torres Strait Islander people compared to non-Indigenous people.

Funding sources

• Governments fund over 90% of health and high care residential aged care services for Aboriginal and Torres Strait Islander people, with the state and territory governments and the Australian Government providing broadly similar shares in 2006–07:
  • state and territory governments, 50.7%
  • Australian Government, 41.3%
  • non-government, 6.5% (including out-of-pocket payments).
• In contrast, the funding for providing health and high care residential aged care services to non-Indigenous people was two-thirds by government and one-third by nongovernment/private organisations (including out-of-pocket payments):
  • state and territory governments, 22.2%
  • Australian Government, 40.5%
  • non-government, 29.2%.
• In comparison to non-Indigenous people, state and territory governments provide substantial funding to Aboriginal and Torres Strait Islander people for public hospital services (per person expenditure ratio of 2.54) and community health services (ratio of 4.11). This is largely because non-Indigenous people have a greater reliance on nongovernment services.
  
  Overall the total per person government funding on health and residential aged care services was higher for Aboriginal and Torres Strait Islander people than for others with a ratio of 1.65.
  
  In contrast, the per person health and residential aged care services expenditure ratio for all funding sources (government and non-government) for Aboriginal and Torres Strait Islander people compared to non-Indigenous people is much lower at 1.22.