Health spending grows to $78.4 billion

Health expenditure in Australia in 2003-04 was $78.4 billion or $3,919 per person, according to a report released today by the Australian Institute of Health and Welfare.

This represents a $6.1 billion increase from 2002-03, or $267 more per person than the previous year.

Health expenditure as a proportion of Gross Domestic Product (GDP) was estimated at 9.7% for 2003-04, up from 9.5% in 2002-03 and up from 8.3% a decade ago.

The AIHW report, Health Expenditure Australia 2003-04, shows that expenditure on hospitals, medical services and pharmaceuticals continue to drive health expenditure in Australia.

These three areas accounted for $3.8 billion of the increase between 2002-03 and 2003-04. Increased expenditure on other professional services, high-level residential care and dental services accounted for $0.6, $0.4 and $0.3 billion respectively.

The majority of spending in health was funded by governments (67.9%), while the non-government sector funded 32.1%.

In 2003-04, $8.1 billion in funding was directed through private health insurance but $2.5 billion of that figure was funded by the Australian Government's health insurance rebates (up from $2.3 billion the previous year).

Out-of-pocket spending on health by Australians grew, in real terms, 6.2% in 2003-04 compared to 5.0% the previous year, which equates to $15,912 million in current prices,' said Lindy Ingham of the Institute's Expenditure Unit.

Real growth in expenditure by individuals between 1993-94 and 2003-04 was 5.4% per year, 0.8 percentage points above the real growth in health expenditure, of 4.6%, per year over the period.

Comparing Australia internationally, Ms Ingham said, 'Organisation for Economic Co-operation and Development (OECD) figures show that our health expenditure-to-GDP ratio of 9.7% is above the OECD average of 8.8%.'

30 September 2005

Further information: Mr Ken Tallis AIHW, tel. 02 6244 1014 or, Ms Lindy Ingham, AIHW, tel. 02 6244 1160 or Mobile 0407 915 851

For media copies of the report: Publications Officer, AIHW, tel 61 2 6244 1032.