The economic benefits of eliminating Indigenous health inequality in the Northern Territory

Yuejen Zhao, Siva R Vemuri and Dinesh Arya
Med J Aust 2016; 205 (6): 266-269. || doi: 10.5694/mja16.00215


Objectives: To estimate the potential economic benefits of closing the Indigenous health gap by quantifying the economic burden associated with Indigenous health inequality in the Northern Territory.

Design, setting and participants: A cost-of-illness study was conducted from a societal perspective for NT residents for the period 2009–2013. The total cost of the Indigenous health gap was estimated by calculating the cost differences between Indigenous and non-Indigenous populations in health services, lost productivity and lost life-years on the basis of data from the 2011 census, as well as on burden of disease, health expenditure, welfare, taxation and other published financial data.

Main outcome measures: The total and per capita costs in three categories were analysed: direct health costs, the indirect costs of lost productivity, and intangible costs associated with premature deaths.

Results: The excess cost of the Indigenous health gap was estimated to be $16.7 billion for the 5-year study period, equivalent to 19% of the NT gross state product. The excess costs associated with the Indigenous health gap included 22% caused by higher health expenditure for servicing the gap, 35% attributable to lost productivity caused by illness, and 43% associated with lost life-years.

Conclusions: Our findings highlight the long term potential benefits of the Australian governments’ Closing the Gap initiative for the NT. Successful implementation of this initiative will require improving government services by combating discrimination, developing local economies, overcoming poverty, and reducing the disadvantages associated with remoteness.

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  • Yuejen Zhao1
  • Siva R Vemuri2
  • Dinesh Arya1

  • 1 Northern Territory Department of Health, Darwin, NT
  • 2 Charles Darwin University Business School, Darwin, NT


Competing interests:

No relevant disclosures.


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