AIHW media releases

Health spending in Australia grew by 6% between 2000-01 and 2001-02 to $66.6 billion, according to the latest figures released today by the Australian Institute of Health and Welfare (AIHW).

The 6% rise overall was the highest since 1991-92, and boosted health expenditure as a proportion of Gross Domestic Product (GDP) to 9.3%, the highest ever.

Governments continued to foot most of the bills in health (69.1%), with the Australian Government contributing an estimated $30.7 billion, and state, territory and local governments $14.8 billion.

The AIHW report, Health expenditure Australia 2001-02, also shows that spending on health by Australians from their own pockets grew by an average 7.7% per year in real terms during the five-year period 1997-98 to 2001-02.

Out-of-pocket spending on health in 2001-02 was $12.3 billion or $630.00 per person. This accounted for 59% of non-government spending on health.

Private health insurance funds, the other major contributor to non-government health spending, provided $5.1 billion in 2001-02, or 24% of non-government spending.

The Australian Government's share of public hospital funding was $ 8.0 billion (47.9%) in 2001-02 compared with $7.5 billion (48.8%) the previous year. The state, territory and local government share was $7.7 billion (46.2%), compared with $7.0 billion (45.6%) in 2000-01.

The estimated $66.6 billion spent on health in Australia in 2001-02 was $5.7 billion more than the previous year. This equates to $3,397 per person in 2001-02, an annual rise of $250 per person or 4.6% in real terms. The 4.6% annual increase per person is the equal highest since 1991-92.

Report co-author Lindy 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, accounting for over two-thirds of all health spending increases.

'Expenditure on pharmaceuticals in particular grew rapidly-rising by 9.4% per year in real terms in the decade to 2001-02, compared with a 4.5% real growth in overall spending on health over the same period.'

The health expenditure to GDP ratio of 9.3% compares with 9.1% in 2000-01, and 8.1% in 1991-92. Ms Ingham said that while the 9.3% ratio was the highest figure recorded for Australia, it was comparable to other Organisation for Economic Co-operation and Development (OECD) countries.

'Our figures are similar to Canada, France and the Netherlands, while being more than the UK and New Zealand, but still a long way short of the USA.'