Healthy Communities: Patients' out-of-pocket spending on Medicare services, 2016–17 - Report - About the report

Healthy Communities: Patients' out-of-pocket spending on Medicare services, 2016–17

Download Report (PDF, 2.9 MB)

About the report

This report looks at the out-of-pocket costs for patients in 2016–17, for health services that were delivered outside hospitals and subsidised by Australia’s universal public health insurance scheme, Medicare. In 2016–17, around 9 in 10 Australians used one or more of these services, including GP, specialist, diagnostic imaging and pathology services (Box 1). While governments contributed $19.0 billion towards these non-hospital Medicare services in 2016–17, around $3.0 billion was paid for out-of-pocket by patients.

Box 1: Out-of-pocket costs for non-hospital Medicare services

Medicare provides free or subsidised access to many treatments and diagnostic tests provided by health professionals outside of hospitals.This includes GPs and specialists, and diagnostic imaging, obstetric, radiotherapy, pathology and some allied health services. If the doctor or health service provider bills Medicare directly (bulk-billing), the patient pays no out-of-pocket cost. However, if the doctor or health service provider charges more than the Medicare rebate, the patient pays the ‘gap’, which is known as an out-of-pocket cost. Out-of-pocket costs for non-hospital Medicare services cannot be claimed through private health insurance.

The report identifies differences between local areas in out-of-pocket costs for patients and areas where patients reported barriers to care due to cost. It uses data from two sources:

  • Medicare Benefits Schedule (MBS), 2016–17
  • Australian Bureau of Statistics (ABS) Patient Experiences in Australia 2016–17 Survey.

The ABS survey is based on a sample of people aged 15 and over who reported needing health services in the previous 12 months. See the Technical Note for more information about the ABS sample.

The report presents the proportion of patients with out-of-pocket costs, the total out-of-pocket cost per patient at the 50th (median) and 90th percentile (see Box 2), the amount patients spent out-of-pocket per service, and the proportion of people who delayed or did not use a service when needed due to cost.

Box 2: Understanding the measures

In this report we focus on the half of patients who had out-of-pockets costs and not on the half that had no costs. For those with costs, we report the out-of-pocket costs at the 50th (median) and 90th percentiles. A patient with out-of-pocket costs at the 50th percentile spent more than half of the patients with costs, but less than the other half. A patient at the 90th percentile spent more than 90% of patients with costs, but less than the remaining 10%.

The following is a textual flow chart, select this link to skip to a textual description

Graphical representation of the breakdown of patients covered in this report.

The following link expands the infographic text. Show infographic text Hide infographic text

This infographic flowchart displays the populations included in the measures, and gives a visual representation of how to interpret percentiles.

People who did not claim a service (9% of the Australian population) were not included in the measures. Of the remaining 91% of the population who claimed a service, 50% of patients had no out-of-pocket costs.

Only patients with costs (50% of patients nationally) were included in the percentile measures. For example, if 10 patients had costs:

  • 5 patients (50%) would have costs below the median (50th percentile);
  • 4 patients (40%) would have costs above the median but below the 90th percentile; and
  • 1 patient (10%) would have costs above the 90th percentile.

Patients are defined as people who claimed at least one eligible service within the 2016–17 financial year. The total out-of-pocket cost and out-of-pocket cost per service includes only those patients who had costs. As such, these measures should be interpreted alongside the proportion of patients who had (or did not have) out-of-pocket costs in the year. Patients with costs may have had the cost of some of their services covered completely by Medicare (bulk-billed).

The out-of-pocket cost per service measures are the average out-of-pocket costs for each patient for a particular type of service, for example, specialist attendances. The median and 90th percentile cost for each area are presented.

Reporting percentiles (rather than just the average) provides information about the distribution of costs in local areas. This is useful when data are highly skewed, such as in this case, where the majority of Australians have low out-of-pocket costs, but a smaller number face much higher costs.

What are the geographic areas reported?

We show all measures broken down by the 31 PHN areas in Australia. PHNs are organisations that connect health services across specific geographic areas determined by the Australian Government. ‘PHN area’ refers to the population that lives in the geographic area covered by a particular PHN.

We show measures using data from the MBS broken down by smaller geographic areas known as Statistical Areas Level 3 (SA3s, or ‘local areas’ in the report)—there are 340 SA3s in Australia.

All results have been mapped to the area where people live, rather than the area where the services were provided.

To allow comparisons among more similar areas, PHN areas are grouped into metropolitan and regional areas. Results for the SA3s are grouped by similar socioeconomic status for SA3s in Major cities, and by the remoteness areas of Inner regional, Outer regional and Remote (including Very remote) for SA3s outside Major cities. PHN areas and SA3s were allocated to a group based on the greatest proportion of their population classified within that group, so their allocation may not reflect the circumstances of everyone in that area.

What’s not included?

The sections of this report based on Medicare data do not include people who didn’t use any out of hospital health care, or who used other types of health services not subsidised by Medicare (for example, hospital emergency departments).

Medicare only covers a small portion of allied health and dental services. Services that were paid for completely by the patient or subsidised by private health insurance are not included in the report. The report also does not include medications, or services funded under compensation arrangements or by the Department of Veterans’ Affairs.

For more information about the measures, areas and data used, see the Technical Note.

Download Report (PDF, 2.9 MB)