Governments chipping in more for health, as individual Australians pay less

Government funding for health has risen, with individuals now funding a smaller proportion of health costs, according to a report released today by the Australian Institute of Health and Welfare (AIHW).

The report, Health expenditure Australia 2015–16, shows that $170.4 billion was spent on health goods and services in 2015–16, with $114.6 billion (67.3%) of this funded by governments.

This is up from 66.9% the year before and is the first increase in the proportion that governments contributed since 2011–12.

‘In 2015–16, the largest single source of health funding was the Australian Government, contributing $70.2 billion, or 41.2% of overall spending, up from $66.2 billion , or 41.0%, in 2014–15,’ said AIHW spokesperson Vicki Bennett.

State and territory governments contributed 26.1% ($44.4 billion) in 2015–16, up from 25.9% ($41.9 billion) a year earlier.

Over the same period, the share of spending by non-government funders, including individuals and private health insurers fell.

Non-government funders spent $55.8 billion on health in 2015–16, making up 32.7% of total health spending. This is down from 33.1% the previous year and is the first time that the non-government funding proportion has fallen since 2011–12.

‘Individuals contributed 17.3% to overall health spending, down from 17.7% a year earlier, which makes it the smallest contribution by individuals since 2011–12,’ Ms Bennett said.

Over half (52.7%) of non-government spending was by individuals with private health insurers and other non-government sources contributing the remainder.

When looking at how the money was spent, the report reveals two broad categories of expenditure: public hospital services and primary care (such as general practitioners).

The majority of primary care funding was provided by the Australian Government ($25.6 billion or 43.3%), while state and territory governments funded more than half (52.5%) of the $51.1 billion bill for public hospital services.

Primary health care accounted for the largest portion of spending by individuals (68.0%, or about $20 billion), with more than one-quarter of this ($5.7 billion) spent on dental services.

Overall, growth in health spending has slowed in recent years, rising by 3.6% in 2015–16—well below the 10-year average of 4.7%.

Despite this, health spending makes up a growing proportion of the economy, holding a 10.3% share of the Gross Domestic Product (GDP) in 2015–16, up from 10.0% a year earlier.

Further information: Elizabeth Ingram, tel. 02 6249 5048, mob. 0431 871 337