Rural healthcare funding gap reaches $9.23 billion
15 Oct 2026
The analysis, prepared by management consultancy Nous Group, examined healthcare spending in the 2024–25 financial year. It found a difference of $1,218 per person between rural and urban areas.
The NRHA said the gap had increased by $138 in real terms since the previous year, continuing a trend identified in earlier reports.
Spending differences across public hospitals, private healthcare, aged care and Medicare services contributed to the funding gap. The report said falling spending on private hospitals and the growing financial difficulties faced by rural private hospitals were the main reasons the gap had widened.
Medicare spending was also lower in rural areas, accounting for $199 per person of the overall difference.
The report found that average age-adjusted MBS spending was $1,535 per person in Modified Monash Model (MMM) 1 areas. Funding remained broadly in line with needs across MMM 2–4 areas but fell to $811 per person in MMM 7, which covers the most remote communities.
The NRHA linked this pattern to the limited availability of primary care services in remote areas.
RACGP Rural Chair Associate Professor Michael Clements welcomed the report, saying the findings helped show the scale of the differences in healthcare access and funding.
He said politicians and city-based voters needed to better understand the challenges faced by rural communities.
The analysis also found that spending through Primary Health Networks (PHNs) generally increased as areas became more remote. However, telehealth spending fell with increasing remoteness, suggesting it had not made up for reduced access to Medicare-funded services.
Towns in MMM 5 areas carried a particularly large share of the funding gap. However, Associate Professor Clements said differences between states and territories made it difficult to draw broad conclusions from this finding.
The report called on governments to establish a reasonable standard of healthcare for people in remote communities and develop a national strategy for rural and remote health.
Associate Professor Clements supported improving rural healthcare but said existing successful local programs should not have to wait for a national strategy.
He pointed to Primary Health Networks and community-led initiatives that have helped maintain local services, saying better funding and effective programs could help rural communities attract and retain more healthcare workers.
Rural healthcare funding gap reaches $9.23 billion
Source: National Rural Health Alliance – Rural health spending gap blows out to $9.23 billion