News

Report shows significant growth in Australian health expenditure


Amanda Lyons


1/10/2018 2:27:15 PM

Most of the increase in health spending, which has risen to more than $7400 per person, is driven by federal, state and territory governments.

Australian health expenditure has increased significantly, boosted by government spending on hospitals and benefit-paid pharmaceuticals.
Australian health expenditure has increased significantly, boosted by government spending on hospitals and benefit-paid pharmaceuticals.

A report released today by the Australian Institute of Health and Welfare (AIHW) shows that total health expenditure in 2016–17 rose to $180.7 billion, which equals more than $7400 per person and 10% of overall economic activity.
 
Overall, the real growth in 2016–17 health spending was 4.7%, up from an average of 3.1% over the previous five years.
 
The biggest contributors to this growth were federal, state and territory governments, which together were responsible for 69% of health spending. In addition, total government spending grew by 6.8% in 2016–17, compared to an average of 2.6% over the previous five years.
 
More than one-third of Federal Government health expenditure, or $27.5 billion, is directed to primary care, which the AIHW defines as including general practice, dental services and pharmaceuticals. Within this figure, $10.2 billion was spent on primary healthcare services and $10.7 billion went to benefit-paid pharmaceuticals.
 
By contrast, the health-focused spending of non-government sources, which includes individuals, recorded its lowest growth rate since 2006–07 – 0.2% compared with the decade average of 4.8%.
 
However, in 2016–17 individuals spent almost $30 billion on health-related expenses before receiving the medical expenses tax rebate, 60.3% more than they spent in real terms in 2006–07 ($18.6 billion). More than two thirds of this health spend by individuals was in the category of primary healthcare.
 
Meanwhile, primary healthcare spend by private health insurance funds was relatively low, accounting for 17.6%, or $2.8 billion, of expenditure, the majority of which was spent on dental services.



AIHW Australian Institute of Health and Welfare health expenditure