Health spending up to $53 billion

Spending on health services in Australia last financial year rose by $2.6 billion to $53.7 billion-a real growth rate of 3%, according to figures released today by the Australian Institute of Health and Welfare (AIHW).

The average annual real growth rate during the 1990s has been 4% per year.

Health expenditure as a proportion of Gross Domestic Product (GDP) has remained relatively stable. After increasing from 8.5% to 8.6% in 1997-98 and 1998-99, preliminary estimates show that the health spending to GDP ratio has dropped to 8.5% during 1999-00.

Health Expenditure Bulletin No. 17: Australia's health services expenditure to 1999-00 shows that $ 2,817 per person was spent on health services for the year-an increase of $111 per person on the previous year.

Acting Head of the Institute's Health and Welfare Expenditure Unit, Tony Hynes, said the one-off increase in the health expenditure to GDP ratio in 1998-99 was due to excess health inflation.

'In that year, average prices for health services inputs increased by 2.5%-well above the general rate of inflation of 0.1%,' Mr Hynes said.

The Commonwealth's share of public hospital funding was 48.1% in 1999-00. The States' share was 45.9%. Mr Hynes said that the relative shares of the two levels of government fluctuate during the life of each five-yearly Health Care Agreement.

'During the last agreement period, the Commonwealth's share averaged 47.2% and the States' share 43.7%.'

The 1999-00 results reflect the substantial effect of the Commonwealth's 30% rebate on private health insurance premiums in that year. Rebates totalled $1.6 billion and caused the Commonwealth share of health expenditure to rise from 46.8% in 1998-99 to 48.0% in 1999-00. Offsetting this, the non-government share fell from 29.9% to 28.8%. The State and local government remained constant at 23.2% in 1998-99 and 1999-00.

14 September 2001


Further information: Mr Tony Hynes, AIHW, tel. 02 6244 1160
Media copies of the report: Publications Officer, AIHW, tel. 02 6244 1032