This report presents estimates of the expenditure and usage patterns in the Australian healthcare system based on geographical remoteness, exploring health expenditure from a patient-centred perspective. It demonstrates the shortfall in health expenditure across hospital, community, aged care, the disability sector, and ancillary care in Australia’s regional and remote communities. The National Rural Health Alliance commissioned this report to better understand current healthcare expenditure and to inform discussions on the health needs of rural Australia.

The disparity in health expenditure between metropolitan and rural, regional, and remote Australia (referred to in the remainder of the report as rural Australia unless otherwise stated) is difficult to measure due to the complex public-private health system in Australia. Health funding primarily comes from federal and state/territory governments, as well as private health insurers and individuals. In major cities and inner-regional areas, health services are mainly supported through activity-based funding and fee-for-service funding, while block funding is common in remote areas. This makes it challenging to get a clear picture of the disparity in health expenditure between metropolitan and rural Australia.

This report focuses on service delivery expenditure and how that varies across different regions. The expenditure does not cover all government expenditure on the service delivery sectors covered, including programs aiming to support improved heath workforce and infrastructure in urban and rural areas. Assessing the distribution of this expenditure would have required a different methodology and significant additional analysis and was not within the scope of the work.

This analysis shows the need for greater and more strategic investment in the health of rural Australians. There is clear evidence that per-person spending on healthcare is not equitable, and that this inequity is contributing to poorer health outcomes experienced in rural areas.