Health expenditure in rural and remote Australia

Do people in rural and remote areas receive an adequate share of health expenditure?

Table 32: Summary of overall rural health deficit 2006-07


$ million


MBS – primary and related care deficit 1



MBS – in-hospital deficit 2



Total Medicare deficit






PBS deficit 3



Other pharmaceuticals deficit 4



Total pharmacy deficit






Oral/dental care deficit 5



Allied health services deficit 6



Aids and appliances deficit 7



Total other primary care deficit






Total primary care and related deficit






Aged care deficit 8






Public hospital ‘overspend’ 9



Private hospital ‘underspend’ 10



Net hospital ‘overspend’






Estimated total ‘rural health deficit’



1   AIHW figure: includes services from GPs and specialists, diagnostic tests, pathology and radiology.
2  AIHW figure: Medicare rebates for in-hospital services to private patients.
3  Alliance estimate based on higher proportion of concessional cardholders outside Major cities.
4  Alliance estimate of lower usage of scripts not eligible for PBS rebate.
5  Alliance estimate based on total national cost (from AIHW) and mal-distribution of oral health workforce.
6  Alliance estimate based on total national cost (from AIHW) and mal-distribution of allied health workforce.
7  Alliance estimate assuming 20 per cent lower access to primary care and rehabilitation than in Major Cities.
8  Alliance estimate, adjusted for aged care needs of Aboriginal and Torres Strait Islander people aged 50-69.
9  AIHW figure:Note that this relates to services for people from rural and remote Australia, not necessarily in hospitals in rural and remote areas.
10 AIHW figure.  Attributable to lower rates of private health insurance and fewer private hospitals in rural and remote Australia.




Table 32 summarises the NRHA assessment of the underspend on health outside Major cities. The primary care, PBS and hospital spends are hard estimates taken from AIHW, while the other figures are softer estimates by NRHA based on lower levels of access to service providers and known lower levels of service provision in these areas.

The annual two billion dollar rural health deficit is likely to be an underestimate. While the assessment assumes that the per capita need for healthcare is similar in major cities, rural and remote areas, we know that the need for health care (and therefore for health expenditure) is higher; between 10% and 25% higher outside Major cities if based only on the burden of disease.

Unfortunately, the data in Table 32 relates to the 2006-07 financial year, which makes it almost a decade old at the time of writing.