AIHW media releases

Expenditure on health in Australia reached $112.8 billion, or $5,190 per person, in 2008–09, according to a report released today by the Australian Institute of Health and Welfare (AIHW).

The report, Health expenditure Australia 2008–09, shows that after taking inflation into account, the $112.8 billion total was 5.8% or $6.2 billion more than for the previous year. Growth in total health expenditure has averaged 5.4% per year over the past 10 years.

The largest component of the increase was a $1.6 billion rise in spending on public hospital services, followed by spending on medications, which grew by $1.3 billion.

‘Virtually all areas of health expenditure experienced real growth, that is, growth above general inflation, between 2007–08 and 2008–09’, AIHW Director Dr Penny Allbon said.

‘These included medical services, health research, dental services, and other health services such as ambulance services, aids and appliances, and community health services.’

Almost 70% of total health expenditure in Australia was funded by governments, with the Australian Government contributing $48.7 billion (43.2%), and state, territory and local governments contributing $29.9 billion (26.6%).

The remaining 30.2% was funded by individuals (16.8%), private health insurers (7.8%), and other non-government sources (5.7%).

Total recurrent spending from all sources on public hospitals in 2008-09 was $32.3 billion, and for private hospitals it was $8.4 billion.

‘Governments provided 80%of the total funding for public and private hospitals combined’, Dr Allbon said.

For public hospitals, the Australian Government’s funding share is estimated to have risen from 39.3% to 39.6% between 2007–08 and 2008–09. The state and territory government share fell from 52.8% to 51.2%. Both levels of government spent more money than in the previous year. After declining for 6 years from 2000–01, the Australian Government share of public hospital funding has risen gradually since 2006–07.

In 2008-09, health expenditure in Australia was 9.0% of gross domestic product (GDP).

The 9.0% figure is up from a re-calculated percentage of 8.8% in 2007–08. The 2007-08 figure has been revised downwards from last year’s published figure due to Australia’s adoption of a new international standard for national accounts, which expands the calculation of GDP.

Health expenditure has risen more than GDP in percentage terms for 8 of the past 10 years.

‘Australia’s health expenditure as a proportion of GDP was very similar to the United Kingdom, slightly lower than Canada and New Zealand and considerably lower than the U.S.’, Dr Allbon said.