More than $140 billion health spend

More than $140 billion was spent on health in Australia in 2011-12, according to a report released yesterday by the Australian Institute of Health and Welfare (AIHW).

The report, Health expenditure Australia 2011-12, shows health spending was estimated to be $140.2 billion in 2011-12-up from $132.6 billion in 2010-11 and from $82.9 billion 10 years earlier in 2001-02 (after adjusting for inflation).

Almost 70% of total health expenditure during 2011-12 was funded by governments, with the Australian government contributing 42.4%, and state and territory governments contributing 27.3%. The remaining 30.3% was funded by individuals, private health insurers, and other non-government sources.

As a proportion of Australia’s gross domestic product (GDP), health spending was 9.5% in 2011-12, up from 9.3% in 2010-11 and 8.4% in 2001-02.

“Over the decade from 2001-02, the ratio of health spending as a proportion of GDP and taxation revenue has risen, particularly following the global financial crisis,” said AIHW chief executive, David Kalisch.

Over the decade to 2011-12, the Australian overnment ratio of health expenditure to taxation revenue rose by 4.0 percentage points to 26.4%, while the state and territory governments’ ratio rose by 8.1 percentage points to 24.5%.

“Our analysis of health inflation suggests that in recent years annual price rises in the broader economy have generally been greater than price rises in the health sector,” Mr Kalisch said.

The estimated recurrent expenditure on health per person in 2011-12 was $5,881, a rise from $5,681 per person in 2010-11 and $4,062 in 2001-02 (after adjusting for inflation).

Public hospital spending was the biggest component of health expenditure in 2011-12, accounting for $42.0 billion, or 31.8% of recurrent expenditure. The largest component of the overall rise in health spending was also spending on public hospital services (up by $2.1 billion), making up almost a third of the growth in recurrent health expenditure.

The federal government’s share of public hospital funding was 38.2% in 2011-12, down from 39.6% in 2010-11. The state and territory governments’ share of public hospital expenditure was 53.3% in 2011-12, up from 52.0% in 2010-11.