Hospital Spending Rises While Primary Care Investment Falls, GPs Warn
29 Oct 2025
The AIHW’s Health Expenditure Australia 2023–24 report reveals Australia spent $270.5 billion on healthcare, with hospital expenditure rising 1.2% to $113.8 billion, driven by more hospitalisations and patient admissions. In contrast, primary healthcare spending fell 0.5% to $89.1 billion, largely due to reduced spending on public health initiatives like COVID-19 vaccines and rapid antigen tests.
Associate Professor Rashmi Sharma, Chair of the RACGP Expert Committee – Funding and Health System Reform, said well-funded primary care is the most cost-effective way to improve access, reduce hospital demand, and address chronic disease. “Supporting general practice allows GPs to manage chronic conditions, mental health, and preventive care more effectively, keeping people out of hospital,” she said.
The report also highlighted that high-frequency primary care can reduce emergency department visits and unplanned hospital admissions. “Patients who attend practices more regularly are 10% less likely to present to ED and 12% less likely to have an unplanned hospital admission,” Associate Professor Sharma added.
The RACGP has called for increased funding to reflect the growing complexity of consultations, particularly for mental health and chronic disease, recommending a 40% boost for longer consultations and expanded multidisciplinary care teams.
The AIHW report shows cancer, cardiovascular disease, and musculoskeletal disorders are the highest-cost disease groups, while mental health and substance abuse have the second-highest burden but rank seventh in spending.
Source: AIHW, RACGP
