COVID-19 drives spike in Australian health spending gov't report

The COVID-19 pandemic had a profound impact on Australia’s healthcare expenditure during the 2021-22 period, as per government data.

A report published by the Australian Institute of Health and Welfare (AIHW) unveiled that a total of 241.3 billion Australian dollars (equivalent to 153.3 billion U.S. dollars) were allocated to healthcare goods and services nationwide in the 12 months leading up to June 2022, amounting to 9,365 Australian dollars (or 5,951 dollars) per person. This marked a substantial increase of 13.7 billion Australian dollars (8.7 billion dollars) compared to the previous year.

Inflation-adjusted figures showed a notable 6 percent growth in health spending from 2020-21 to 2021-22, in contrast to the average annual increase of 3.4 percent witnessed in the preceding decade.

The report highlights that governments were responsible for a significant portion of healthcare spending, accounting for 72.9 percent. The federal government contributed 105.8 billion Australian dollars (67.2 billion dollars), while state and territory governments collectively contributed 70.2 billion Australian dollars (44.6 billion dollars). Federal government healthcare funding experienced an impressive growth rate of 8.6 percent in the transition from 2020-21 to 2021-22, significantly surpassing the long-term average of 3.5 percent.

The report attributes this surge in healthcare spending to the impacts of the COVID-19 pandemic. Notably, hospital expenditures increased by 4.6 percent to reach 96 billion Australian dollars (61 billion dollars), largely due to the rising number of COVID-19 hospitalizations. Spending on primary healthcare, including services offered by general practitioners and community health centers, saw a substantial growth of 10.9 percent, reaching 84.1 billion Australian dollars (53.4 billion dollars) in 2021-22. This increase is linked to pandemic-related expenses such as COVID-19 vaccines and personal protective equipment.

However, it’s important to note that the report also indicates that stringent COVID-19 restrictions in place across Australia during the period covered by the report likely contributed to a 0.9 percent reduction in individual healthcare spending and a 5.3 percent decrease in spending by private health insurance providers.


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