Expenditure for First Nations peoples

Introduction

Systematic inequalities can cause or increase disparities between advantaged and disadvantaged groups. Health equity identifies the distribution of resources and other processes, including social determinants of health, that drive systematic inequality in the health sector.¹

This section presents Australian health expenditure for First Nations peoples and expenditure relative to need. Many factors influence health expenditure such as the additional cost of delivering services in remote areas, and differences in health needs, health services and health structures.

Overall health expenditure

In 2015–16 (most recent data), $7.003 billion was spent on health for First Nations peoples in Australia, 4.4% of total health expenditure in that year with per capita spending 1.3 times that of other Australians. This compares with a 2.3-fold higher disease burden for First Nations Australians in 2018.²

Average per person health expenditure was estimated to be $8,949 and of this, $4,436 (49.6%) was spent on hospital services in 2015–16. Governments provided an estimated 78.2% of the total funding used to pay for health-related goods and services for First Nations Australians, compared with 68.7% for other Australians.³

In recent years (2010–11 to 2016–17), Australian Government health expenditure per person grew by 5.6% per year in real terms for First Nations peoples compared to 1.3% per year for Australians overall.³

Hospital separations

Nationally, mental and behavioural disorders ($350 per person) and injury, poisoning and other external causes ($300 per person) had the highest hospital expenditure.³

These were leading causes of disease burden for First Nations Australians in 2018.²

For almost all diagnostic categories, hospital expenditure per person was higher for First Nations peoples than other Australians. The highest absolute differences were seen in:³

• mental and behavioural disorders ($350 per person compared with $151 per person)
• factors influencing health status and contact with health services (for example, examinations) ($294 per person compared with $142 per person)
• certain conditions originating in the perinatal period ($155 per person compared with $42 per person)
• pregnancy, childbirth and the puerperium ($225 per person compared with $118 per person)
• respiratory diseases ($213 per person compared with $114 per person)
• injury, poisoning and other external causes ($300 per person compared with $223 per person).³

Expenditure by state and territory

Estimated expenditure per person for First Nations peoples by state and territory governments varies across jurisdictions. Expenditure was highest in the Northern Territory ($11,108 per person) and lowest in Tasmania ($2,193 per person).

Queensland ranked 3rd in per capita spending in 2015–16 ($5,670 per person) after Western Australia ($7,201 per person).

The variation between jurisdictions may be explained in part by differences in the proportion of First Nations Australians within the jurisdiction living in remote and very remote areas where spending is greatest (2.3 times that of major city per person spending for selected health services).³ Also, the differences may be driven by the methodologies used to allocate expenditure for First Nations peoples within the different finance systems.⁴

Additional information

Data and statistics

Visit AIHW for more information about Measures included in the Aboriginal and Torres Strait Islander Health Performance Framework.

Strategies and information

Queensland committed to working in partnership with prescribed First Nations stakeholders to embed equity into the public health system with Making Tracks Together: Queensland’s Aboriginal and Torres Strait Islander Health Equity Framework and the HHS health equity strategies.

Section technical notes

AIHW estimated results from the AIHW’s Health Expenditure Database (HED), a collation of more than 50 data sources capturing health spending by governments, individuals, private health insurers and other private sources. More information is available from Health expenditure Australia 2021–22.

References

1. Braveman P and Gruskin S. 2003. Defining equity in health, Journal of Epidemiology and Community Health, 57(4):254, doi:10.1136/jech.57.4.254.
2. Australian Institute of Health and Welfare. 2022. Impact and causes of illness and death in Aboriginal and Torres Strait Islander people 2018, Australian Institute of Health and Welfare, doi:10.25816/XD60-4366.
3. Australian Institute of Health and Welfare. 2020. Aboriginal and Torres Strait Islander Health Performance Framework Tier 3 - 3.21 Expenditure on Aboriginal and Torres Strait Islander health compared to need, https://www.indigenoushpf.gov.au/measures/3-21-expenditure-atsi-compared-need, accessed 30 September 2022.
4. Australian Institute of Health and Welfare. 2021. Aboriginal and Torres Strait Islander health expenditure estimates 2010-11 to 2016–17, https://www.aihw.gov.au/reports/indigenous-australians/indigenous-health-expenditure-estimates/data, accessed 19 March 2023.