An Australian Institute of Health and Welfare report released on Thursday showed lung disease commonly caused by smoking was the biggest reason for admissions in 2017-18.

Vaccine-preventable diseases and heart failure took up the most days of hospital care.

The report warns these admissions increased for remote and more disadvantaged communities, with the gap only growing.

While the admissions may not have been unnecessary, preventable health care could have helped reduce them.

Infected wounds and dental conditions were also among the most common reasons for preventable hospitalisations.

Nearly half of preventable admissions were for Australians aged over 65, with children under-14 making up 13 per cent of unnecessary hospitalisations.

Aboriginal and Torres Strait Islander people saw three times the rate of preventable hospitalisations, with the issue affecting regional and remote communities at a disproportionate rate.

For children under-14, dental conditions were the most common cause of potentially preventable hospitalisations.

Institute spokesman Richard Juckes said the data didn't indicate an inefficient health system, but showed the health inequalities among Australians.

"It indicates that management at an earlier stage may have prevented the patient's condition worsening," Mr Juckes said.

The Northern Territory had the highest rate of preventable admissions, with the ACT seeing the lowest.

The most common reason for a preventable hospitalisation for men was lung disease, while for women it was urinary tract infections.

Vaccinations, oral and sexual health checks, managing infections and lifestyle changes were all ways to avoid an unnecessary trip to the hospital, the report said.

Australian Associated Press