Australians living outside metropolitan areas have greater health needs, but consistently receive less of the health dollar.
Targeted rural funding programs have not offset the core under-spend on health in Australia’s regions, with a new analysis showing that funding gaps are only increasing.
The National Rural Health Alliance today released an updated version of its landmark report on the rural health expenditure deficit.
Where last year’s version, which was based on the 2023-24 financial year, found that rural Australians received approximately $1080 less in health funding per person per year, the new report, which was based on the 2024-25 financial year, now estimated the gap at $1218 per person per year.
In terms of MBS spend, Australians who lived in MM1 locations received about $1238 in funding per year.
While MM2 to MM4 locations had roughly equivalent spends per person – $1183, $1167, and $1166, respectively – MM5 to MM7 locations received significantly less funding.
Those in the most remote areas received 40% less in MBS funding than their MM1 counterparts, at $728 per year.
This discrepancy persisted despite Medicare’s rural loading, which increased the value of bulk billing incentives outside of metropolitan areas.
“While Bulk Billing Incentives (BBIs) for providers to bulk bill have increased, they appear to have had a limited impact on addressing underlying access challenges in the most remote areas,” the NHRA report, which was prepared by Nous Group, said.
Funding incentives did not mean much, for example, if there was no workforce to take them up.
“The MBS deficit is closely linked to ongoing challenges in accessing primary care and specialist services in rural and remote communities with persistent shortages of GPs, specialists and other primary care providers.
“Primary care is often a person’s first point of contact with the health system and plays an important role in preventing, detecting, diagnosing and managing chronic conditions.”
It’s worth noting here that the latest round of Medicare investments – specifically the expansion of the bulk billing incentive to all Australians and the introduction of the bulk billing PIP – were not implemented until the first half of the 2025-26 financial year, meaning they were not captured in these calculations.
According to NHRA CEO Susi Tegen, the report demonstrated the “consistent under-prioritisation and underfunding of rural Australians and clinicians that support them”.
“This is no longer a health issue, but an economic and social issue,” she said.
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“70% of Australia’s export income comes from rural communities, and 90% of the food we eat, and 50% of the tourism income, even though rural Australia only makes up 30% of the population.”
The NHRA has long advocated for a move away from fee-for-service funding in rural Australia, pushing instead for block funding which could be adapted in different ways to meet different community needs.
According to this year’s report, reform should start with the government laying out a definition of “reasonable access to care”, setting expectations for the level of primary, secondary, disability, and aged care which should be accessible for all Australians.
“Funding and accountability should then be linked to whether communities can genuinely access that care, not simply whether programs, entitlements or funding allocations exist,” the report said.
“The same level of care will not be expected or feasible everywhere, however, defining expectations for equitable care is important to guaranteeing a standard of healthcare for all Australians.”
Rural health services could then enter flexible, multi-year funding arrangements which supported the needs of a specific community.
Read the full report here.