Little change in national health spending

More than $185 billion, or almost $7,500 per person, was spent on health goods and services in Australia during 2017–18, according to a new report by the Australian Institute of Health and Welfare (AIHW).

The report, Health expenditure in Australia 2017–18, will be launched at The Australian Health Economics Society Conference in Melbourne.

‘Total health spending increased by $2.2 billion in 2017–18 to $185.4 billion in constant prices. This was a 1.2% increase on 2016–17 against a backdrop of 3.9% average annual growth over the decade,’ said AIHW spokesperson Dr. Adrian Webster.

‘The lower growth rate in 2017-18 was partly due to the previous year having included one-off capital expenditure on projects such as the new Royal Adelaide Hospital. It was also a result of a previous spike in Australian Government spending on new drugs to treat hepatitis C.

’Governments funded two-thirds ($126.7 billion) of total health spending in 2017–18, with the Australian government contributing $77.1 billion—$1.8 billion more than the previous year.

Australia’s state and territory governments spent $49.5 billion—$1.3 billion less than the previous year.

‘Health expenditure by governments represented 24.4% of tax revenue, a decline from 2016–17 where 26% of tax revenue was spent on health,’ Dr. Webster said.

‘The decline in health expenditure as a proportion of tax revenue was primarily due to relatively rapid revenue growth when compared with previous years.’

In 2017–18, personal out-of-pocket health costs amounted to an average of $1,578 per person. There was little change in the proportion of individual net worth spent on health over the decade.

Contributions to health spending by private health insurers rose by $400 million to $16.6 billion in 2017–18.

‘The decade has seen an overall increase in spending by private health insurance providers per person covered. In 2017–18, private health insurers spent an average of $1,470 per person covered, compared with $1,043 in 2007–08,’ Dr. Webster said.

The total number of people holding private health insurance with hospital treatment coverage increased by almost 2 million over the decade.

However, membership declined between 2016-17 and 2017-18 by about 33,000 to 11.3 million, the first decrease seen over the decade.

‘Regular reporting of national health expenditure is important to understanding Australia’s health system and how spending relates to changes such as the ageing population, increased chronic disease prevalence, and medicinal and technological developments,’ Dr. Webster said.

Media enquiries: Peter Jean, AIHW: Tel. 02 6244 1148, mob. 0401 312 261  [email protected]

NOTE: The original version of this media release contained an error which was also published in Health expenditure in Australia 2017–18.

The report correctly identified a decrease in private health insurance membership with hospital treatment coverage of approximately 33,000 between 2016-17 and 2017-18—the first decrease seen over the decade.

However, the report incorrectly stated that there had been an almost 2 million decrease in private health insurance membership with hospital treatment coverage over the decade 2007-08 to 2017-18. This should have been an almost 2 million increase.

 Health expenditure in Australia 2017–18 was updated to correct the error.