The distribution of household health expenditures in Australia

Out-of-pocket health expenditures in Australia are high in international comparisons and have been growing at a faster rate than most other health costs in recent years. This raises concerns about the extent to which out-of-pocket costs have constrained access to health services for low income households. Using data from the ABS Household Expenditure Survey 2003-2004, we model the relationships between health expenditure shares and equivalised total expenditure for categories of out-of-pocket health expenditures and analyse the extent of protection given by concession cards. To allow for flexibility in the relationship we adopt Yatchew's semi-parametric estimation technique. This is the first detailed distributional analysis of household health expenditures in Australia. We find mixed evidence for the protection health concession cards give against high out-of-pocket health expenditures. Despite higher levels of subsidy, households with concession cards do not have lower out-of-pocket expenditures than non-cardholder households except for the highest expenditure quintile. Cards provide most protection for GP out-of-pocket expenditures.