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Every year Australia spends more on its health, even after allowing for inflation. As a proportion of all spending on goods and services, health spending has increased from 7.9% to 9.4% over the past decade.

However, there is a lot that needs to be done with those increasing dollars, both by hospitals and in the community, and a wide range of health services are increasingly active.

More than $120 billion!

Australia spent $121.4 billion on health in 2009–10, which accounted for 9.4% of total spending on all goods and services in the economy (known as gross domestic product or GDP). This averaged out to $5,479 per person.

Health spending for Australia, like other OECD countries, has increased over the past decade at a faster rate than spending on all goods and services.

As a proportion of GDP, Australia’s spending in 2009 was much less than that of the United States (17.4%), slightly less than the United Kingdom (9.8%), New Zealand (10.3%) and Canada (11.4%), and close to the OECD median (9.6%).

Health and total spending: trends

Stacked bar chart shows health spending in Australia as a proportion of gross domestic product, for 1999-00 through to 2009-10. Spending on health in Australia has increased over time, and in 2009-10 this was $121.4 billion.

Find out more: ‘Chapter 8 The economics of health’ in Australia’s health 2012

Where the money comes from

Of the total health funding of $121.4 billion in 2009–10, the Australian Government contributed 44%, and state, territory and local governments 26%. Other funds were provided by individuals as out-of-pocket payments (30%), and private health insurers (8%), with small contributions from third-party motor vehicle insurers and worker’s compensation insurers.

As a share of total health spending, Australia’s out-of-pocket payments (18.2%) in 2009 were higher than the median for developed countries (15.8%).

Sources of health funding, 2009–10

Pie chart shows sources of health funding in 2009-10. Of the $121.4 billion spent on health in 2009-10, 43.6% was contributed by the Australian Government, 26.3% by State/territory and local governments, 17.5% by individuals, 7.6% by health insurance funds, and 5.0% by other sources.

Find out more: ‘Section 8.2 Where does our health dollar come from?’ in Australia’s health 2012

Where the money goes

In 2009–10, hospitals were by far the biggest area of health spending. They consumed 40% of regular health spending (which in turn made up almost 96% of total health spending, the rest being for new buildings and major equipment).

The next largest component was medical services (18%), comprising mainly services provided by GPs and specialists as private practitioners. Medicines made up another 14%, followed by dental services (7%).

Recurrent spending on health goods and services, 2009–10

Pie chart shows where money is spent on health goods and services: 39.8% on hospitals, 18.3% on medical services, 14.0% on medicines, 6.6% on dental services, 5.0% on community health, 3.6% on research and 12.6% on other goods and services.

Find out more: ‘Section 8.3 Where does our health dollar go?’ in Australia’s health 2012

Which conditions cost the most?

Another way to look at health spending is to consider how much money is spent on different conditions. About two-thirds of total regular health spending can be allocated to disease groupings. Of the broad groups shown, cardiovascular diseases accounted for the greatest spending ($7.9 billion or 11%) followed by oral health ($7.1 billion or 10%) and mental disorders ($6.1 billion or 8%).

Care provided to patients admitted to a hospital made up the bulk of spending for some disease groups (such as congenital anomalies (birth defects) and cancers). For other disease groups (such as oral health), a greater proportion of spending went towards services, programs and goods outside the hospital setting.

Spending allocated to broad disease groups, 2008–09

Bar chart shows spending allocated to specific disease groups. Cardiovascular disease, oral health and mental disorders accounted for the greatest spending; congential abnormalities, neonatal causes and skin the least.

Find out more: ‘Section 8.3 Where does our health dollar go?’ in Australia’s health 2012

Our health system is busier

Along with increased spending on health, our health system is more and more active. Each year, GPs see more patients, a growing number of medicines are prescribed, ambulances and aero-medical services attend to and transport more people, hospitals and emergency departments are increasingly busy, and a greater number of elective surgeries are performed.

On an average day in Australia…

  • 342,000 people visit a GP
  • 742,000 medicines are dispensed by community pharmacies
  • 6,800 people are transported by ambulance; a further 900 are treated but not transported
  • 71,000 km are flown by the Royal Flying Doctor Service and 107 evacuations performed
  • 23,000 people are admitted to hospital (including 5,000 for an elective surgery)
  • 820 babies are born (including 260 by caesarean section)
  • 17,000 people visit an emergency department at larger public hospitals
  • 400 treatment episodes are completed with alcohol and other drug treatment services

Find out more: ‘Chapter 7 Treating ill health’ in Australia’s health 2012