Rural and remote Australians getting a raw deal when it comes to service-related health expenditure

The almost 30 per cent of the population residing in rural, regional and remote (hereafter rural) Australia is spread across vast distances, spanning 99.3 per cent of the country's land surface.¹ Rural people contribute proportionately more to the Australian economy than their metropolitan counterparts, generating at least 80 per cent of export revenue,² nearly 50 per cent of tourism revenue³ and producing 90 per cent of the food we consume.⁴ The income derived from rural Australia is predominantly made up of industries such as agriculture, fisheries, forestry and resources, with exports from these industries valued at almost $500 billion per year.^{5, 6} Yet, rural people are exposed to poorer social determinants of health and elevated rates of health risk factors.¹ They also have reduced access to health services and experience poorer health outcomes than those living in major cities.¹

A report by Nous Group (Nous),⁷ commissioned and published by the National Rural Health Alliance (the Alliance) in June this year, shines a light on these issues, focussing on health care expenditure in rural, regional and remote Australia.

The report found a $6.55 billion deficit in spending on health care in 2020–2021 for people living in rural Australia, equating to an underspend of almost $850 per person, per year. The report mainly used publicly available data to quantify spending across the health care sector, analysing it from a consumer perspective regarding spending on service provision. It considered admitted, nonadmitted and emergency department spending in public hospitals, private hospital spending, out-of-hospital expenditure via the Medicare Benefits Schedule (MBS), the Pharmaceutical Benefits Schedule (PBS), National Disability Insurance Scheme (NDIS), aged care, dentistry, Aboriginal and Torres Strait Islander health care under the Aboriginal Community Controlled Health Organisation (ACCHO) sector, Primary Health Networks (PHN) and the Royal Flying Doctor Service (RFDS).

Although the report did not include data regarding expenditure on nonadmitted patient care outside hospitals (such as community health centres), allied health services, patient-assisted travel schemes, patient transport and ambulance services, and private health expenditure (outside of private hospitals), it is the most comprehensive assessment of health expenditure by geography available. These data are not routinely reported by government organisations such as the Australian Institute of Health and Welfare (AIHW). The last report of a similar nature was published by the Alliance in 2011. Titled, ‘Australia's health system needs re-balancing: a report on the shortage of primary care services in rural and remote areas’,⁸ it was based predominantly on 2006–2007 data analysed by the AIHW, which found the annual rural health funding deficit to be between $2.1 and $2.4 billion. The Alliance generated an updated figure in 2020, considering population changes over time and the real increase in per-person health expenditure, giving a new annual figure of $4 billion.¹ The latest release is based on 2020–2021 data, quantifying a considerable increase in the deficit in rural health funding. There are some differences in the data analysed in the 2011 and 2023 reports, most notably the inclusion of NDIS data in the latest report. In the 10 years from 2010, expenditure has increased by a greater proportion in major cities (MMM*1) than in regional and rural areas (MMM2-5) and remote areas (MMM6-7), increasing the gap in expenditure by geography over time.

Nous concluded that the gap in health care expenditure was driven by deficiencies in private hospital and MBS expenditure in rural, regional and remote Australia. When the expenditure data were broken down by program, the report illustrated a drop in MBS expenditure from $1011.14 per capita (age-standardised) in MMM1, to $814.57 in MMM2-5 and $519.20 in MMM6-7. Private hospital expenditure was reduced in all areas outside major cities. Spending on dentistry reduced with remoteness. While similar or slightly higher in regional and rural areas (MMM2-5), the spending on the PBS, NDIS and aged care was considerably less in remote areas (MMM6-7).

In contrast to the aforementioned areas of spending deficit, elevated spending was observed for public hospitals in remote† and very remote areas. This was coupled with progressively increasing expenditure on nonadmitted hospital care such as outpatient clinics, as well as public emergency department care in all areas outside major cities. There was also increased expenditure on Aboriginal and Torres Strait Islander health care programs, PHNs and the RFDS with increasing remoteness.

The coupling of service access and workforce data with expenditure figures, along with themes from key stakeholder interviews, provides important context, driving the conclusion that expenditure trends reflect barriers to utilisation of primary health care services in rural, regional and remote Australia. This has resulted in reliance on the secondary and tertiary care sector, likely for heightened acuity of disease or illness.

Hospital-based care is more costly. Provision of health care in rural Australia is also generally more costly. Despite the increased cost of care outside major cities and overuse of more costly forms of care, along with increased expenditure on programs designed specifically to meet the needs of rural people and address gaps in other programs (such as ACCHOs, PHNs and the RFDS), this was not enough to narrow, let alone equalise the overall gap in expenditure by geography.

Ultimately, the expenditure deficit presented in the Nous report illustrates the raw deal rural people are getting when it comes to health care. This is an equity issue—rural people have a right to health care no matter where they live and their health outcomes should not be dictated by their postcode. Given the significant contribution of rural Australians to the economy, maintaining and improving health care services in rural areas is essential to the economic well-being and growth of the nation.

In responding to these new data, a solution focus is required. People living in rural Australia are not getting adequate access to high-quality primary health care in the right place at the right time. This has an impact on their health outcomes. Innovative ways of funding care are required that do not rely solely on the fee-for-service model, which in turn requires an adequate population to enable financial sustainability. Block funding is needed where markets fail and should support local community design and governance of solutions based on local need. Rural models must prioritise multidisciplinary primary health care where health professionals are able to work to their full scope of practice. They should consider the use of digital technology and mobile health care in addition to face-to-face care and view the local health systems holistically rather than in a siloed fashion, to reduce competition for scarce resources. Workforce solutions must be equitable across professions and consider financial, professional and social barriers to recruitment and retention. Solutions must be implemented and scaled alongside programs that support and train rural people in rural locations so that they stay rural upon completion. Regional planning approaches where all key stakeholders are engaged are essential to the efficiency and sustainability of these proposed solutions.

AUTHOR CONTRIBUTIONS

Clare Fitzmaurice: Writing – original draft; writing – review and editing.