FOR IMMEDIATE RELEASE
The funding of gender affirming surgery and hormonal therapy for transgender Australians through Medicare is a cost-effective way of reducing government spending on mental healthcare, research from the University of Melbourne has shown.
A paper published recently in the International Journal of Transgender Health shows the once-off cost of funding a gender-affirming surgery through Medicare would be offset within three years, as the individual’s reduced need for mental healthcare support would save the government a minimum of $400 annually.
A second article published last week in the Lancet eClinicalMedicine used Australian data to measure the mental health benefits of gender affirming hormone therapy, finding that it too reduces ongoing costs.
The two papers were led by Dr Karinna Saxby from the Melbourne Institute of Applied Economic and Social Research and co-authored by Dr Brendan Nolan from Austin Health’s Trans Health Research Group at the University of Melbourne.
The paper focussing on hormonal therapy was a collaboration between Dr Saxby, Dr Nolan, and colleagues from the University of New Wales, University of Michigan, and Vanderbilt University.
Both papers use whole-of-population administrative data of transgender and gender diverse Australians seeking gender-affirming care between 2013 and 2024, tracking their use of mental healthcare services.
“We found the beneficial and euphoric effects of helping someone align their body with their gender are so pronounced, they’re far less likely to see a psychologist as often as they were before the treatment,” said Dr Saxby.
“This means that not only is accessible gender-affirming care vital to that person’s wellbeing, it’s also a cost-effective way of easing the demand on the Australian mental health care system.”
Gender affirming surgery is not currently subsidised through Medicare funding structures, but an independent review is considering its addition. That proposal would allow trans people with private health insurance to receive up to 75% in rebates, costing the government around $1,100-1,300 per surgery.
The newly published research shows the annual government spending on mental healthcare per person decreased by AU$430 for chest surgery recipients and AU$884 for genital surgery recipients. This reduction persists into the long-term, with mental health treatment and costs remaining lower as long as six years after treatment.
“Gender-affirming surgery is a once-off payment, but mental health support is ongoing. We estimate that it’d take only a maximum of three years per person for the government to recoup the costs of the procedure, while providing life-changing treatment for a trans person seeking gender affirming surgery,” said Dr Nolan.
“Previous studies suggest that over 80% of trans people would like to receive this surgery in Australia. If we applied these estimates to our sample and they were all given fair access to receive it, it could save the taxpayers $42 million.”
Unlike surgery, hormonal therapy is available through the PBS but has been banned for people under 18 in Queensland and the Northern Territory.
The research estimates a $30-260 reduction in government spending per person after the completion of hormone therapy, with the decrease most pronounced for individuals who had higher mental healthcare costs prior to therapy.
“Our early indications suggest that the ongoing funding of hormonal therapy is also a cost-effective solution as it more than pays for itself within five years,” said Dr Saxby.
Media enquiries: Ben Cardwell | ben.cardwell@unimelb.edu.au | 0425 665 165