Aborigines and Torres Strait Islanders who live in discrete communities have poor health. Their life expectancy is relatively low and the underlying rates of morbidity, mortality and hospitalisation are much higher than the Australian average. For Aborigines and Torres Strait Islanders in the remote communities, the mortality rate is some three times higher than that of the total population. By comparing remote Aboriginal and Torres Strait Islander communities with similarly remote nonindigenous settlements, the paper shows that there was greater hospital activity per person in remote Aboriginal and Torres Strait Islander communities. Paradoxically, whereas there was greater hospital activity in discrete indigenous communities, there was lower expenditure per person on hospital services. The paper finds also that there were fewer medical and nursing staff per person in remote Aboriginal and Torres Strait communities.