A new report from the Australian Institute of Health and Welfare has revealed the impact of higher government spending on health in response to the pandemic.
According to the report, spending on health goods and services increased by $13.7 billion to $241.3 billion during 2021–22 as the system responded to the COVID-19 pandemic.
"Total health spending in 2021–22 was equivalent to 10.5% of Gross Domestic Product (GDP), approximately 0.2 percentage points lower than in 2020–21," said AIHW spokesperson Geoff Callaghan.
"After adjusting for inflation, total health spending grew by 6.0% compared with 2020–21 - higher than the average yearly growth rate over the decade (3.4%). This translated to an average health spending of $9,365 per person in 2021–22 - an increase of $484 in real terms from the previous year."
Recurrent hospital spending increased by $4.2 billion (4.6 per cent) in real terms to $96 billion, partially driven by an increase in hospitalisations involving a COVID-19 diagnosis.
Recurrent spending on primary health care grew by $8.3 billion (10.9 per cent) in real terms to $84.1 billion, which was associated with increased spending related to the pandemic, such as COVID-19 vaccines and personal protective equipment.
The federal government spent $105.8 billion on health, representing a $8.4 billion real increase (8.6 per cent) from the previous year.
AIHW said this was more than double the average annual real growth in the decade to 2021–22 (3.5 per cent) and also higher than 2020–21 (7.6 per cent). State and territory governments spent $70.2 billion on health, an increase of 11 per cent ($6.9 billion) from 2020–21 in real terms and above the average for the decade of 4 per cent.
Government spending through the National Partnership on COVID-19 Response (NPCR) was $12.8 billion ($6.6 billion by the federal government and $6.2 billion by state and territory governments).
Federal government spending through specific COVID-19 Department of Health and Aged Care programs (outside the NPCR) was estimated at $12.1 billion.
Health spending by individuals decreased by 0.9 per cent in real terms to $33.7 billion during 2021–22. Spending by private health insurance providers also decreased by 5.3 per cent ($1 billion) in real terms to $17.5 billion.
"It is likely that COVID-19 restrictions and temporary suspension of non-urgent elective surgery and non-essential treatments in most states and territories resulted in lower spending by individuals, private health insurance providers, and other non-government entities in 2021–22," added Mr Callaghan.