Expenditure by condition

Introduction

This section summarises national estimates of health system expenditure by 2018 Australian Burden of Disease (ABDS) groups and specific conditions.¹ Because estimates were based on health system expenditure, tangible costs incurred outside the health system, such as residential aged care facilities, workplaces, and judicial systems, are not included. Intangible costs such as lost productivity or reduced quality of life are also not included in these figures. Results from specific studies that more fully account for individual and societal costs, when available, are included in other sections of this report.

Disease group expenditure

In 2019–20, 73.4% of recurrent spending, an estimated $140.425 billion could be attributed to specific diseases and injuries nationally.²

• 62.6% was for hospital services
• 28.3% for primary health care
• 9.1% for referred medical services.

Of the 2018 ABDS disease groups, musculoskeletal disorders had the highest estimated spending in 2019–20 ($14.624 billion, or 10.4% of total allocated spending) followed by cardiovascular diseases (9.1%) and cancer (8.6%) of total (Figure 1).

Considering specific diseases, the two largest were falls ($4.681 billion) and dental caries ($4.479 billion). Spending for conditions that could not be classified, specifically costs for symptoms ($6.967 billion), other cardiovascular disease ($6.493 billion), and other musculoskeletal conditions ($5.819 billion) exceeded these amounts but could not be included in these figures.²

Health system spending per treated case

Within disease groups, expenditure per case varied, often greatly, by condition (Table 1). For example, the range in average cost per case in the cancer and other neoplasms disease group ranged from $235,061 for chronic myeloid leukemia to $2,042 for non-melanoma skin cancer.²

Among specific conditions, the three most costly to treat per case were all in the cancer and other neoplasms disease group, specifically chronic myeloid leukemia ($235,061), acute lymphoblastic leukemia ($167,250), nasopharyngeal cancer ($135,192) and myeloma ($107,104).² Condition-specific costs for some treatment types (for example, dental treatment) were excluded from these estimates.

Total health system spending for specific conditions is a function of several factors including:

• expenditure per case
• the number of cases
• factors related to the onset, progression and management of disease.

For some conditions, onset, progression and management can be highly related to modifiable risk factors. Table 2 includes health system expenditure by condition including the percentage of total expenditure that is attributable to the 2018 ABDS risk factors for 2018–19.³

COVID-19

In 2019–20, $182.9 million was spent to treat patients who were admitted or visited emergency departments public and private hospitals and pathology testing for COVID–19.³ Note that this does not include expenditure for public health programs or other COVID-19 related payments by the government.

Of the services listed above, approximately 52.6% of the cost was spent on pathology testing, and 24.2% and 22.2% for public hospital admitted and emergency services, respectively. However, the proportion spent for each service varied by patient’s age, where the expenditure for admitted patient in public hospital was much greater than pathology testing in older patients.

Risk factor expenditure

Disease groups

Potentially modifiable risk factors included in the 2018 ABDS accounted for 39.1% of total allocated health system spending in 2018–19. In terms of expenditure, $23.590 billion of the $60.323 billion in spending could be attributable to risk factors.²

• Overweight and obesity resulted in the greatest health spending of the risk factors—$4.268 billion, accounting for 7.1% of total allocated spending (Table 3).
• Tobacco use was ranked second with $3.287 billion
• High plasma glucose followed closely with $3.187 billion.³

This highlights the potential to manage healthcare costs and creating a more sustainable healthcare system through effective prevention strategies.

Many of the diseases and conditions with relatively high preventability are also very costly. This applies to the majority of conditions with greater than $1 billion attributable costs (Table 4). For example, coronary heart disease is associated with various modifiable risk factors, and approximately 88.2% of the $2.062 billion in treatment costs in 2018–19 could be attributed to risk factors.³

Additional information

Data and statistics

Additional information about the area of expenditure is available from the AIHW Area of spending webpage.

Additional information by ABDS disease group and conditions is available from the AIHW Disease expenditure in Australia 2019–20 web report.

References

1. Australian Institute of Health and Welfare. 2021. Australian Burden of Disease Study: Impact and causes of illness and death in Australia 2018. doi: 10.25816/5PS1-J259.
2. Australian Institute of Health and Welfare. 2022. Disease Expenditure in Australia 2019-20. Accessed: 20 December 2022.
3. Australian Institute of Health and Welfare. 2022. Health system spending per case of disease and for certain risk factors. Accessed: 10 January 2023.