Health spending passes $60 billion

Spending on health in Australia has exceeded $60 billion for the first time, according to the latest figures released today by the Australian Institute of Health and Welfare (AIHW).

The 2000-01 expenditure figure of $60.8 billion was $5.1 billion more than the previous year, and represents a real growth rate of 5.1%, significantly higher than the 10-year trend of 4.4%.

Health expenditure Australia 2000-01 also reports that health expenditure as a proportion of Gross Domestic Product (GDP) is now at 9.0% compared to 8.8% in 1999-00.

Figures for 1999-00 and earlier years have been substantially revised, showing much higher out-of-pocket health expenditure. Consequently the health spending to GDP ratio for 1999-00 has been revised upwards from 8.5% to 8.8%. The ratio rose steadily through the 8% range during the 1990s.

Report co-author Lindy Ingham said that the 2000-01 figures, while rising in real terms compared to the previous year, were in line with those for similar Organisation for Economic Co-operation and Development (OECD) countries.

'Our health spending as a proportion of GDP is below levels in both the United States and Canada, and European OECD countries with the exception of the UK', Ms Ingham said.

The report shows that health spending was $3,153 per person in 2000-01, an increase of $231 per person on the previous year. This is a 3.8% annual increase in real terms compared with the average per person increase of 3.2% per year between 1990-91 and 2000-01.

Ms Ingham said that, as had been the case for all of the 1990s, hospital and medical services, and pharmaceuticals, were the main drivers of health expenditure growth-over two-thirds of all health spending increases in the 1990s were in these three areas.

'Expenditure on pharmaceuticals in particular grew rapidly in 2000-01, rising by 14.6%, while hospital and medical services grew by 7.2% and 7.6% respectively.'

The Commonwealth's share of public hospital funding was 48% in 2000-01, with the States' share falling each year from 47% in 1997-98 to 43% in 2000-01. Public hospital funding by non-government sources was 8.5% in 2000-01.

The Commonwealth Government's rebate on private health insurance premiums continued to have an impact on health expenditure. In 2000-01, total health expenditure on the rebate was $2.1 billion, up 35% on the previous year.

This contributed to a rise in the Commonwealth's share of total health expenditure from 46.9% in 1999-00 to 47.5% in 2000-01.

State and local governments' share of expenditure, which had averaged over 23% for the previous 3 years, fell to 22.5% in 2000-01, while the non-government sector's contribution remained at 30%.

The private health insurance funds' share of expenditure on health increased by 0.4% while spending by individuals remained steady.

5 September 2002


Further information: Mr Tony Hynes, 02 6244 1160;
Ms Lindy Ingham, 02 6244 1143, 0409 307 671
For media copies of the report: Publications Officer, tel. 02 6244 1032