At a glance

  • The disease group with the largest health expenditure in 2020–21 was musculoskeletal disorders—however based on cost per treated case, cancer and other neoplasms were the most costly to treat in 2018–19.
  • Modifiable risk factors accounted for 39.1% of health expenditure (recurrent allocated spending) in 2018–19.
  • Overweight (including obesity), and tobacco use accounted for 18.1% and 13.9% of the $23.590 billion of health system funding attributable to risk factors, respectively.

Introduction

This section summarises the Australian Institute of Health and Welfare’s (AIHW) report on national estimates of health system expenditure by Australian Burden of Disease (ABDS) groups and specific conditions and by ABDS risk factors.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 2020–21, an estimated $150.100 billion could be attributed to specific diseases and injuries nationally.2 The percentage of spending by broad area was:

  • 62.6% was for hospital services
  • 27.6% for primary health care
  • 9.8% for referred medical services.

Of the ABDS disease groups, musculoskeletal disorders had the highest estimated spending in 2020–21 ($14.749 billion, or 9.8% of total allocated spending) followed by cancer and other neoplasms and cardiovascular diseases (9.7% and 9.5% of total, respectively)(Figure 1).

Figure 1: Australian allocated recurrent spending by disease group, 2020–21

Specific condition expenditure

Considering specific diseases, the two largest were dental caries ($5.320 billion) and falls ($4.731 billion). Spending for conditions that could not be classified to a specific condition were reported as separate categories. Those that exceeded the amount that could be assigned to specific conditions were other cardiovascular diseases ($7.495 billion), symptoms ($6.707 billion), and other musculoskeletal ($5.893 billion).2

COVID-19

To maintain consistency with earlier reports in this series, AIHW excluded payments under the National Partnership on COVID-19 Response (NPCR) as well as any community or public health related spending on COVID-19 outside of the NPCR for the following results. In 2020–21, $2.603 billion was spent to treat patients who required health care for COVID-19.2 Approximately 63.4% of the cost was spent on public hospital outpatient, and 24.9% and 7.7% for pathology and general practitioner services, respectively (Figure 2).

Figure 2: National COVID-19 spending by detailed area of expenditure, sex and age group, 2020–21

Note: This dashboard is developed and maintained by the Australian Institute of Health and Welfare.

Health system spending per treated case

The latest information about spending per treated case is from 2018–19. Within disease groups, expenditure per case varied, often greatly, by condition (Figure 3). For example, the range in average cost per case in the cancer and other neoplasms disease group ranged from $235,061 for chronic myeloid leukaemia to $2,042 for non-melanoma skin cancer in 2018–19.3

Figure 3: Conditions with highest and lowest Australian health system spending per case by disease group, 2018–19

Among specific conditions, the most costly to treat per case were all in the cancer and other neoplasms disease group, specifically chronic myeloid leukaemia ($235,061), acute lymphoblastic leukaemia ($167,250), nasopharyngeal cancer ($135,192) and myeloma ($107,104) (Figure 4).3 Condition-specific costs for some treatment types (for example, dental treatment) were excluded from these estimates.

Figure 4: Top 20 burden of disease conditions with the highest health system spending per case by sex, Australia, 2018–19

Note: This dashboard is developed and maintained by the Australian Institute of Health and Welfare.

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. Figure 5 includes the percentage of total expenditure that is attributable to the ABDS risk factors for 2018–19.3

Figure 5: Share of health system spending on disease conditions attributed to risk factors, Australia, 2018–19

Note: This dashboard is developed and maintained by the Australian Institute of Health and Welfare.

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 The top three risk factors and the percentage of their total health system spending on burden of disease conditions were (Figure 6):

  • Overweight (including obesity): $4.268 billion (7.1%),
  • Tobacco use: $3.287 billion (5.4%) and
  • High blood plasma glucose: $3.187 billion (5.3%).3

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

Figure 6: Australian health system spending attributed to risk factors, 2018–19

Note: This dashboard is developed and maintained by the Australian Institute of Health and Welfare.

Many of the diseases and conditions with relatively high preventability are also very costly (Figure 7). For example, in 2018–19 health expenditure attributable to overweight (including obesity) for osteoarthritis, type 2 diabetes and chronic kidney disease were $1.109 billion, $568.4 million and $564.2 million, respectively. For tobacco use, attributable health expenditures were $715.1 million for other cardiovascular diseases, $615.9 million for COPD and $403.7 for lung cancer.3

Figure 7: Australian risk factor health expenditure attribution by ABDS conditions, 2018–19

Note: This dashboard is developed and maintained by the Australian Institute of Health and Welfare.

Additional information

Data and statistics

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

Additional information about the spending on COVID-19 is available from the AIHW Health system spending on the response to COVID-19 in Australia 2019-20 to 2021-22 report.

Additional information by ABDS disease group and conditions is available from the AIHW Health system spending on disease and injury in Australia, 2020-21 and Health system spending per case of disease and for certain risk factors reports.

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. 2023. Health system spending on disease and injury in Australia, 2020-21, https://www.aihw.gov.au/reports/health-welfare-expenditure/health-system-spending-on-disease-and-injury-in-au/contents, accessed 29 February 2024.
  3. Australian Institute of Health and Welfare. 2022. Health system spending per case of disease and for certain risk factors, https://www.aihw.gov.au/reports/health-welfare-expenditure/health-system-spending-per-case-of-disease/contents/about.

Last updated: August 2024