Spending on healthcare and primary care

In 2022–23, Australian Institute of Health and Welfare expenditure data shows the Federal Government spent $178.7 billion on health, accounting for around 17.1% of total government expenses.¹² Between 2021–22 and 2022–23, health prices grew by 4.17% on average.¹² This is generally consistent with yearly health inflation over the past decade, which has ranged between 1.66% and 4.17%.¹²

Most general practice funding is provided by the Federal Government. Government spending on general practice is markedly less than in other parts of the health sector (Figure 26). In 2022–23, $107.1 billion was spent on hospitals in Australia.¹² Over the same period, $13.8 billion was spent on unreferred medical services (mostly general practice services) in primary care.¹² This data is only available up to 2022-23 and does not include recent Medicare funding commitments made by the Albanese Government.

Funding for general practice care per person has remained relatively stagnant over the past decade (Figure 27). It peaked during the COVID-19 pandemic, between 2020 and 2022, before dipping to below pre-COVID-19 pandemic levels in 2022–23. In 2023–24, the Australian Government spent $452 on general practice services per person. Although this was a 2.9% increase from the previous year, this was the same amount spent per person in 2015–16, demonstrating that funding has remained relatively consistent in the last eight years.¹³

Comparatively, the per person spend on public hospitals for 2022–23 (the most recent available year) was $3649. In the eight years between 2014–15 and 2022–23, per person spend on public hospitals has increased by 30.1%.¹² This is a dramatic rise compared to general practice spending per person.

General practice remains the most cost-effective part of the health system, and there is a strong imperative for policymakers to consider investment in seeing GPs sooner to reduce costs across the health system.

The average cost to government for a patient to visit an emergency department without being admitted to hospital is $749. If the patient is admitted to hospital, this cost rises to $1443.¹³ In comparison, government only funds $84.90 to support a patient to spend 20–39 minutes with their GP for appropriate preventive care, early diagnosis and early treatment for health conditions, potentially reducing avoidable hospital admissions.

Medicare funding for patients to access longer GP consultations is not proportionally equivalent to shorter consultations. Generally, the rebate that patients receive per minute decreases for patients seeking longer consultations, which are usually for complex or multifaceted health needs (Figure 26).¹⁴ In this way, the current funding system for general practice devalues appointments for more complex care.