Health spending passes $50 billion

Spending on health services in Australia last financial year rose by $3.3 billion to $50.3 billion-a real growth rate of 5.3%, the highest for the last nine years, according to figures released today by the Australian Institute of Health and Welfare (AIHW).

The average annual real growth rate since the beginning of the decade had been 4.1% per year.

Health expenditure as a proportion of Gross Domestic Product (GDP) has also increased. Between 1992-93 and 1997-98 the health spending to GDP ratio increased slowly from 8.2 to 8.3%, but has now risen to 8.5%.

Health Expenditure Bulletin No. 16: Australia's Health Services Expenditure to 1998-99 shows that $2,671 per person was spent on health services for the year-an increase of $148 per person or 4.1% on the previous year.

The figures also show a 9.6% real increase in the Commonwealth Government's funding of health services. This, on top of a 6.1% real increase in the previous year (1997-98) took the Commonwealth's share of funding from 44.6% in 1996-97 to 47.1% in 1998-99.

The State and local government funding share increased marginally from 22.4% to 22.9% over the same two-year period, while the non-government sector's contribution fell from 33.1% to 30.0%.

According to the AIHW's Principal Economist, John Goss, the substantial increase in the Commonwealth's funding was 'in large part due to the impact of the government's private health insurance incentives, including the 30% rebate on private health insurance'.

'Its effect was to increase Commonwealth Government expenditure in real terms by 2.4%.'

'An 11% increase in funding to the States and Territories under the new Australian Health Care Agreements and a 23% increase in spending on health services by the Department of Veterans' Affairs were also contributors to the higher than average growth.'


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