Continued slow growth in health spending

29 September, 2015

A new report from the Australian Institute of Health and Welfare (AIHW) shows that spending on health rose in 2013–14, after record low growth in the previous year.

The report, Health expenditure Australia 2013–14, shows that $154.6 billion was spent on health goods and services in 2013–14. This was up by 3.1 per cent in real terms from the previous year.

'This growth was lower than the average annual growth over the decade (five per cent), but more than the 1.1 per cent growth seen in 2012–13, which was the lowest since the 1980s,' said AIHW spokesperson Dr Adrian Webster.

Around $6,639 was spent per person on health in 2013–14, which was $94 more in real terms per person than in the previous year.

'This growth was also relatively slow—a 1.4 per cent increase was seen in 2013–14, which was less than half the average annual growth over the decade (3.3 per cent),' Dr Webster said.

'Despite relatively low growth in overall health spending in 2013–14, the proportion of the economy represented by health increased from 9.7 per cent of gross domestic product (GDP) in 2012–13 to 9.8 per cent in 2013–14,' Dr Webster said.

This was a result of relatively low growth in GDP compared with health spending.

The report shows that spending by governments was $104.8 billion in 2013–14 (almost 68 per cent of total spending), an increase of 2.2 per cent in real terms since 2012–13.

Of total government expenditure, spending by the Australian Government was $63.7 million (60.8 per cent of total government spending), an increase of 2.4 per cent from last year. Spending by state and territory governments was $41.1 million (39.2 per cent of total government spending), an increase of 1.9 per cent since 2012–13.

Non-government funding accounted for $49.8 billion (32.2 per cent) of health spending in 2013–14.

'Non-government funding increased more than any other source, up by 5.0 per cent in real terms since 2012–13,' Dr Webster said.

The report also looks at longer term trends in health spending.

'Over the second half of the decade, the Australian Government's share of total health spending fell from 43.8 per cent in 2008–09 to 41.2 per cent in 2013–14, while the state and territory and local government share has remained fairly stable since 2009–10, at around 26.6 per cent (the value seen in 2013–14),' Dr Webster said.

The non-government sector share of total expenditure increased relatively rapidly over the past two years, despite generally falling throughout the decade.

'Over the decade, funding by individuals was the fastest growing type of non-government funding, growing by an average of 6.2 per cent a year in real terms compared with 5.3 per cent for all non-government sources' Dr Webster said.

The AIHW is a major national agency set up by the Australian Government to provide reliable, regular and relevant information and statistics on Australia's health and welfare.