Australian Health Review Australian Health Review Society
Journal of the Australian Healthcare & Hospitals Association

Cost drivers of remote clinics: remoteness and population size

Yuejen Zhao A B and Rosalyn Malyon A
+ Author Affiliations
- Author Affiliations

A Health Gains Planning Branch, Department of Health and Families, 4th Floor, 81 Smith Street, Darwin, NT 0800, Australia.

B Corresponding author. Email:

Australian Health Review 34(1) 101-105
Submitted: 27 August 2008  Accepted: 1 April 2009   Published: 25 March 2010


This report examines the impact of remoteness and population size on the costs of providing primary health care services in remote Northern Territory Indigenous communities. For remote health clinics servicing a population of similar size, total expenditure increased as remoteness increased. Total expenditure in remote clinics increased with population size, but average per capita expenditure was highest in clinics servicing populations of less than 200 people and lowest for populations of between 600 and 999. Staffing costs comprised over 70% of expenses. The largest non-staffing cost was property management. The higher costs of clinics that are in more remote locations or servicing smaller populations need to be recognised in funding distribution methodologies.

What is known about the topic? People in rural and remote locations tend to have poorer health status and poorer access to primary care services than those in urban areas. There has, however, been a lack of information on the relative cost of providing primary care services in remote areas and the nature of those costs, particularly in remote Indigenous communities.

What does this paper add? This study analyses the costs of primary care services in Northern Territory remote Indigenous communities and their associations with two key cost drivers: remoteness and population size.

What are the implications for practitioners? This paper provides information on the importance of including remoteness and population size in resource allocation formulas for primary care services in remote areas.


We express our appreciation to Oliver Dimito and Paul Quinlan from Remote Health Branch, NT Department of Health and Families for provision and validation of the financial data.


[1] Australian Government. Budget 2008–09. Closing the gap between Indigenous and non-Indigenous Australians. Canberra: Commonwealth of Australia, 2008.

[2] Australian Institute of Health and Welfare. Australia’s Health 2008. Canberra: AIHW, 2008. (AIHW Cat. No. AUS 99.)

[3] Wakerman J , Humphreys J , Wells R , Kuipers P , Entwistle P , Jones J. A systematic review of primary health care delivery models in rural and remote Australia, 1993–2006. Alice Springs: Centre for Remote Health, 2006.

[4] Zhao Y , Hanssens P , Byron P , Guthridge S. Cost estimates of primary health care activities for remote Aboriginal communities in the Northern Territory. Darwin: Department of Health and Community Services, 2006.

[5] Australian Bureau of Statistics. Population distribution, Aboriginal and Torres Strait Islander Australians, 2006. Canberra: ABS, 2007. (ABS Cat. No. 4705.0.)

[6] Australian Bureau of Statistics. ASGC remoteness classification: purpose and use. Canberra: ABS, 2003. (ABS Census Paper 03/01.)

[7] Australian Medical Workforce Advisory Committee. The general practice workforce in Australia: Supply and Requirements to 2013. Sydney: AMWAC, 2005.

[8] Rural Doctors Association of Australia. A sustainable specialist workforce for rural Australia. Canberra: RDAA, 2005.

[9] Northern Territory Government. 2008–09 Budget fiscal and economic outlook, Budget Paper 2. Darwin: Northern Territory Treasury, 2008.

[10] Stone S . Terms of Reference for the 2010 Commonwealth Grants Commission methodology review. 2005. Available at [verified February 2009].

[11] Commonwealth Grants Commission. 2010 review – overview. Canberra: CGC, 2008. Available at [verified February 2009].

[12] Coory MD. Ageing and healthcare costs in Australia: a case of policy-based evidence? Med J Aust 2004; 180 581–3.
PubMed |

[13] Bodenheimer T. High and rising health care costs. Part 2: Technologic innovation. Ann Intern Med 2005; 142 932–7.
PubMed |

[14] Goss J . Projection of Australian health care expenditure by disease, 2003 to 2033. Canberra: AIHW, 2008. (AIHW Cat. No. HWE 43.)

[15] Beaver C , Zhao Y . Investment analysis of the Aboriginal and Torres Strait Islander Primary Health Care Program in the Northern Territory. Canberra: Commonwealth of Australia, 2004.

[16] Steinwald A . Primary care professionals: recent supply trends, projections, and valuation of services. Washington: United States Government Accountability Office, 2008.

[17] StataCorp. Stata user’s guide, Release 9. Texas: Stata, 2005.

[18] Cameron AC,  Windmeijer FAG. An R-squared measure of goodness of fit for some common nonlinear regression models. J Econom 1997; 77 329–42.
CrossRef |

[19] Banker RD,  Charnes A,  Cooper WW. Some models for estimating technical and scale inefficiencies in data envelopment analysis. Manage Sci 1984; 30 1078–92.
CrossRef |

[20] Department of Health and Community Services. Remote health atlas, on-call expectations. Darwin: DHCS, 2008.

[21] House of Representatives. Health Insurance Amendment (Rural and Remote Area Medical Practitioners) Bill 2000. Canberra: Commonwealth of Australia, 2000. Available at [verified July 2009].

[22] Australian Bureau of Statistics. Census of population and housing – details of undercount 2006. Canberra: ABS, 2007. (ABS Cat. No. 2940.0.)

[23] GISCA. ARIA+ accessibility indices. Adelaide: GISCA, 2007. Available at [verified June 2007].

[24] Phillips A. Health status differentials across rural and remote Australia. Aust J Rural Health 2009; 17 2–9.
CrossRef | PubMed |

[25] Commonwealth Grants Commission. Architecture of horizontal fiscal equalisation: principles and interpretation. Canberra: CGC, 2006. Available at [verified February 2009].

Export Citation Cited By (5)