Pulse ·

Australia spends 2% on prevention — and pays for it in billions

Verdict Yes — worth knowing about

Australia spent $270.5 billion on health in 2023–24, but only 2% went to public health and prevention, and only 5.4% reached general practice — the part of the system best positioned to identify and address modifiable risk factors early. An essay by Dr Ramya Raman, a GP specialist and RACGP presidential candidate, argues that 36% of Australia's disease burden is preventable through addressing modifiable risk factors such as obesity, tobacco use, and high blood pressure, while avoidable risk factors cost the health system $38 billion annually. The economic case for investing in prevention is, in the data, unusually strong.

What just happened

An essay by Dr Ramya Raman — a GP specialist and RACGP presidential candidate — published in Medical Republic this week makes the economic case for reframing how Australia funds prevention in healthcare.

The numbers she marshals are striking. Australia spent $270.5 billion on health in 2023–24. Of that, only 2.0% went to public health and prevention — and only 5.4% reached general practice and unreferred medical services, the part of the system most positioned to catch risk factors early.

Meanwhile, the Australian Burden of Disease Study estimates that 36% of Australia’s total disease burden is attributable to modifiable risk factors: overweight and obesity, tobacco use, poor diet, high blood pressure, alcohol, physical inactivity. Avoidable risk factors cost the health system approximately $38 billion annually. Overweight and obesity alone: $7 billion. Potentially preventable hospitalisations: 788,000 per year, costing $7.7 billion.


The both-and

The economic argument is unusually strong

Dr Raman’s framing is deliberately economic rather than moral — and that is the point. Australia’s labour productivity fell 0.6% in Q1 2026. A healthier population participates more fully in the workforce: fewer absences, fewer early retirements due to ill health, fewer days lost to chronic condition flares that were preventable. The link between population health and economic output is well-established in the research literature, even if it rarely drives budget allocations in practice.

The argument is not new. Public health economists have been making versions of it for decades. What makes it land differently right now is the convergence: a state election cycle in Victoria, an RACGP presidential race, and a data environment that makes the cost of inaction increasingly visible.

788,000 potentially preventable hospitalisations costing $7.7 billion per year is not an abstraction. These are admissions for conditions — type 2 diabetes complications, hypertensive crises, decompensated heart failure, preventable infections — that GPs see developing, over years, in people who do not have adequate access to the time and infrastructure needed to address root causes in a standard consultation. A system that sees the complication but not the prevention is a system spending money late.

The structural problem this argument cannot solve alone

Making the economic case for prevention investment is necessary. It is not, by itself, sufficient.

Preventive health is a classic collective-action problem: the investment and the return are separated in time, in political cycles, and frequently across different budget envelopes. A state government invests in school nutrition programmes; the avoided diabetes hospitalisations appear a decade later in a Commonwealth-funded hospital budget. No single decision-maker internalises both the cost and the benefit — so the incentive to invest in prevention remains structurally weak.

Dr Raman’s proposed solutions — a cross-sector National Prevention Investment Framework, pooled Commonwealth-state funding, long-term bipartisan financing, and direct investment in general practice infrastructure — are structurally sound responses to a structurally broken incentive system. They are also the kind of proposals that have appeared in various forms in Australian health policy documents for two decades without being fully enacted.

The honest reading is that Australia understands what prevention investment would look like. The political economy of health spending has been the bottleneck.

What equity means in this picture

The burden-of-disease figures are not evenly distributed. People in the lowest socioeconomic quintile areas carry disproportionate burden from almost every modifiable risk factor category. First Nations Australians face compounded disadvantage. Rural and remote communities have less access to the general practice infrastructure through which prevention would flow.

A prevention investment framework that does not explicitly target these equity dimensions will not reduce the gaps that produce the largest share of the preventable burden. Dr Raman’s call for an “equity-focused approach prioritising disadvantaged communities” addresses this — but equity-focused programmes have historically been the first to be cut in constrained fiscal environments. Structural prevention and equity are not separable goals.


My two cents

This piece matters because it puts the numbers in one place in a form that is legible beyond health policy circles.

$38 billion annually from avoidable risk factors. 788,000 preventable hospitalisations. 36% of disease burden modifiable. 2% of the health budget going to prevention. These figures appear in AIHW and Productivity Commission reports and in academic publications. What changes when someone makes the case plainly, in a clinical journal, during an election cycle, is that the numbers become part of the clinical conversation — which eventually becomes part of the political one.

For patients: the downstream consequence of prevention underfunding is not abstract. It shows up in the appointment that runs out of time before the lifestyle conversation happens. In the referral that takes six months. In the chronic disease management plan that exists on paper but not in practice. The prevention gap is visible in every stretched GP consultation in Australia, every day.

Understanding why the system is structured this way — and that the structure is a choice, not an inevitability — is useful information for anyone navigating it.

Verdict: yes — the policy data is worth knowing.


Sources cited

  1. Raman R. “Prevention should be seen as an investment in economic productivity.” Medical Republic, 18 July 2026. https://www.medicalrepublic.com.au/prevention-should-be-seen-as-an-investment-in-economic-productivity/127396
  2. Australian Institute of Health and Welfare. Australia’s Health 2026. https://www.aihw.gov.au/reports/australias-health/australias-health-2026
  3. Australian Government Department of Health and Aged Care. Preventive health. https://www.health.gov.au/topics/preventive-health

Frequently asked questions

  • What does 'preventable disease' actually mean in this context?

    Preventable disease refers to conditions whose risk is measurably reduced by addressing modifiable factors. The Australian Burden of Disease Study identified 36% of Australia's total disease burden as attributable to modifiable risk factors including overweight and obesity, tobacco use, poor diet, high blood pressure, alcohol, and physical inactivity. 'Preventable' does not mean any individual could have avoided their own illness; it means population-level interventions — accessible general practice, effective health promotion, structural supports — reduce incidence rates across the population.

  • How does prevention underfunding affect my access to GP care?

    It affects GP care in two ways. First, GPs receive only 5.4% of Australia's health budget — limiting time and infrastructure for preventive conversations in consultations. Second, insufficient upstream prevention means more people develop chronic conditions, which increases demand on a GP system already under pressure. Shorter appointment times, longer waits for specialist referrals, and stretched bulk-billing practices are visible downstream consequences of a system that treats disease once it arrives rather than reducing how often it does.