Report Reveals $8.35b Shortfall in Rural Healthcare Funding
29 Aug 2025
Lives are at risk in rural Australia as doctors struggle with not enough funding and overstretched health services, according to a new report.
The report, The Forgotten Health Spend: A Report on the Expenditure Deficit in Rural Australia, was commissioned by the National Rural Health Alliance and shows a funding shortfall of $8.35 billion in 2023–24 compared to urban areas. That means on average, $1090 less is spent per person living in rural and remote communities each year.
The gap has grown by $1.6 billion since 2020–21, with the biggest shortages in primary care, hospitals, aged care, medications, and NDIS services. These funding gaps have real impacts: longer wait times, fewer doctors, and worsening health outcomes.
The human impact
Rural Australians are more likely to suffer from chronic disease, be hospitalised, and die prematurely — up to 2.6 times higher in very remote areas. Limited access to preventive care means small health problems often become serious and more expensive to treat.
RACGP Rural Chair Associate Professor Michael Clements said the report highlights what rural doctors have been warning about for years.
“This is money that would have been spent if those same people lived in urban areas. Instead, rural Australians are missing out on care that could save lives,” he said.
Where the gap is worst
The funding shortfall is most severe in small rural towns, remote and very remote communities (MMM 5–7), where the gap is $4701 per person. These areas also face major workforce shortages, forcing patients to travel long distances for basic care and relying heavily on short-term locum doctors.
By contrast, regional centres and larger rural towns (MMM 2–4) appear better funded, with an extra $967 per person compared to urban areas. But these centres often serve much wider regions, meaning the extra money does not always translate into better access.
Access to Medicare rebates (MBS) and medicines under the PBS also declines sharply in more remote areas, reflecting fewer doctors and limited access to pharmacies.
A call for new funding models
Associate Professor Clements said the findings prove that current funding systems are failing rural patients.
“Rural and remote communities need different funding models tailored to their circumstances. Waiting for Medicare or incentive programs to fill the gap is short-sighted,” he said.
The report recommends region-specific funding, better planning, and more flexible models of care to make sure rural Australians can access essential services.
Source: RACGP