Regular reporting of national health expenditure is vital to understanding Australia’s health system and its relationship to the economy as whole. Expenditure estimates also provide information about how spending relates to changes such as the ageing population, increased chronic disease prevalence, and medicinal and technological developments.

A snapshot of spending

In 2017–18, an estimated $185.4 billion was spent on health goods and services in Australia. This equates to an average of approximately $7,485 per person and constituted 10% of overall economic activity for this period.

After adjusting for inflation, total health spending (capital and recurrent expenditure) was 1.2% more than in the previous year. This was 2.7 percentage points lower than the average yearly growth rate over the decade (3.9%). Taking account of the impact one-off capital expenditure programs may have on growth rates, recurrent spending in 2017–18 showed a growth of 3.5% from 2016–17.

During 2017–18, around two-thirds of health spending was funded by governments: $77.1 billion from the Australian Government and $49.5 billion by state and territory governments. Government health spending represented 24.4% of government tax.

Non-government entities (including individuals, private health insurance providers, injury compensation insurers and other private sources) spent $58.8 billion on health in 2017–18. Individuals were the largest contributor to this at $30.6 billion.

More is being spent on hospitals and primary health care

During 2017–18, spending increased on nearly all areas of health. The greatest increases in spending were for:

  • hospitals, increasing by $3.2 billion. The $74.0 billion spent on hospitals was nearly 40% of total health expenditure. Of this, $57.7 billion was spent on public hospitals and $16.3 billion was spent on private hospitals.
  • primary health care, increasing by $1.5 billion. A total of $63.4 billion was spent on primary health care in 2017–18. Of this, $12.7 billion was spent on unreferred medical services and $12.1 billion was spent on benefit-paid pharmaceuticals.

Increasing per person funding by private health insurers

The decade has seen an overall increase in expenditure 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. During this time, the total number of people holding private health insurance with hospital treatment coverage increased by almost 2 million.

Most of the $16.6 billion spent by private health insurers was spent on private hospitals ($8.2 billion) and primary health care ($2.9 billion).

Across the states and territories, the lowest per person expenditure by private health insurers was in the Northern Territory and Australian Capital Territory, at approximately 60% of the national average.