Summary of: Health expenditure Australia 2009-10 - Australian ...

APHA Information Paper Series
Summary of:
Health expenditure
Australia 2009-10
For APHA Members and
Subscription Service Clients
This document provides a summary of the health expenditure in Australia in 2009-10 following the release of the
AIHW report on Health and welfare expenditure series, number 46
Australian Private Hospitals Association ABN 82 008 623 809
October 2011

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Table of Contents
1 Total health expenditure ..................................................................................................................................... 4
2 Who pays Funding of health expenditure ......................................................................................................... 4
3 Health expenditure and funding, by area of health expenditure ........................................................................ 5
4 International comparisons ................................................................................................................................... 6
5 Key Contacts ........................................................................................................................................................ 7
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1 Total health expenditure
During 2009‐10, Australia spent an estimated $121.4 billion on health goods and services. This was an
increase of 7% or $7.9 billion (in terms of current prices 1 ) and 3.6% or $4.3 billion (in real terms, i.e., after
adjustment for inflation) with respect to the previous year. (Table 2.1, p. 8). The real term health expenditure
growth rate of 3.6% was 1.7% below the average annual health expenditure growth rate of 5.3% over the past
decade, i.e., from 1990‐00 to 2009‐10.
In 2009‐10, Australia’s spending on health accounted for 9.4% of Gross Domestic Product (GDP), an increase
of 0.4% since 2008‐09 and 1.5% since 1999‐00 (Table 2.2, p.10).
Over the 10 years to 2009‐10, both health expenditure and GDP grew in every year. In fact, average annual
real growth in GDP was 3.1% or $33.4 billion, compared with average annual growth of 5.3% or $4.9 billion on
health expenditure (table 2.3, p. 11). As a result of this, the health expenditure to GDP ratio, for the same
period, had an average annual real growth rate of 2.3%.
During 2009‐10, the estimated $121.4 billion spent on health expenditure was equivalent to an average spent
of $5,479 per Australian. This is an increase of $69 per person (after adjustment for inflation) from the
previous year (Table 2.6, pp. 14‐15).
In 2009‐10, recurrent expenditure on health goods and services was $116.3 billion. This was 95.8% of the
total expenditure on health goods and services in that year and the highest over the past decade (Table 2.7,
p.16). Recurrent expenditure on health goods and services usually accounts for 94%‐96% of all expenditure
on health goods and services in a year. For the same period, capital health‐related expenditure accounted for
the remaining 4.2% or $5.0 billion.
In 2009‐10, the percentage share of individual states and territories of the $116.3 billion spent in national
recurrent health expenditure was; NSW (32.1% or $37,358 billion), Vic (24.7% or $28,734 billion), QLD (20% or
$23,276 billion), WA (10% or $11,639 billion), SA (7.8% or $9, 077 billion) , Tas (2.2% or $2,601 billion), ACT
(1.8% or $2,128 billion), and NT (1.3% or $1,493 billion) (Table 2.9, p.17).
In 2009‐10, recurrent expenditure on health goods and services in Western Australia was $5,128 per person
(2.3% below the estimated national average of $5,251 per person) (Table 2.11, p.19). During the same time,
the Northern Territory’s average spending on health was $6,549 per person (24.7% higher than the estimated
national average).
Over the 10 years period from 1999‐00 to 2009‐10, the average annual real growth rate of recurrent health
expenditure per person was highest in SA and NT (4.3%) compared with the national average of 3.9% (Table
2.13, p.21).
2 Who pays Funding of health expenditure
During 2009‐10, Australia spent an estimated $121.4 billion on health goods and services. Of this, the
contribution of:
o Australian Government was 43.6% (or $52.9 billion)
o State, territories and local government was 26.3% (or $31.9 billion); and
o Non‐government funding sources were 30.1% (or $36.6 billion) (Tables 3.1 and 3.2, PP 22‐23).
1 In other words, it is unadjusted for inflation or movements in prices from one year to another.
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The $52.9 billion estimated government funding of health goods and services in 2009‐10, was made up of:
o $31.9 billion (or 60.3%) direct expenditure by the Australian Government on health programs – such
as Medicare Benefits Schedule (MBS) and Pharmaceuticals Benefits Scheme (PBS);
o $12.7 billion (or 24.0%) of National Healthcare Specific Purpose Payments (SPP) and National
Partnership (NP) payments to the states and territories;
o $4.3 billion (or 8.1%) rebates and subsidies for privately insured persons under the Private Health
Insurance Act 2007;
o $3.5 billion (or 6.6%) funding by the Australian Government Department of Veterans’ Affairs (DVA);
and
o $0.5 billion (or 1.0%) non‐specific tax expenditure (Table 3.5, p. 27)
The $36.6 billion estimated non‐government funding of health goods and services in 2009‐10, was made up
of:
o $21.3 billion (or 58.1%) funding by individuals;
o $9.2 billion (or 7.6%) funding provided by private health insurance; and
o $6.1 billion (or (5%) funding from other non‐government sources (mainly in the form of payments by
compulsory motor vehicle third‐party and workers compensation insurers (Table 3.7, p.31).
Over the 10 years to 2009‐10, real growth in funding by individuals averaged at 6% per year. This was 0.7%
higher than the average annual real growth of 5.3% in total funding for health expenditure (Table 3.8, p.32).
From 2003‐04 to 2009‐10, per person health funding by individuals (that is, averaged over the whole
population) grew at an average annual rate of 3.9% (table 3.9, p.33‐34). Over the same period, average per
person out‐of‐pocket expenditure on medical services grew by 5.6% per year.
During 2009‐10, private health insurance funds provided $9.2 billion in funding of health goods and services
(Table 3.10, p.35). Of this:
o Private hospitals received 49.2% (or $4.5 billion);
o Dental services received 11.7% (or $1.1 billion);
o Medical services received 10.4% (or $1.0 billion); and
o Administration received 9.7% (or $0.9 billion).
In 2009‐10, the net health funding provided by private health insurance providers averaged at an estimated
$933 per person covered (Table 3.13, PP. 39‐40). The average funding per person covered was $1,015 (the
highest) in SA, while it was only $495 per person in NT (the lowest).
In 2009‐10, the average fee charged for hospital services and the average copayment for insured patients
aged:
o Less than 14 years was $172 and $51, respectively, per person covered in that age group; and
o Greater than 85 years was $4,135 and $1,003, respectively, per person covered in that age group.
3 Health expenditure and funding, by area of
health expenditure
Health expenditure consists of two elements; recurrent expenditure and capital expenditure. Hereafter the use of
these terms (with or without reference to health) refers to health‐related expenditures.
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Of the $116.3 billion recurrent health expenditure in 2009‐10, public hospital services received $36.2 billion
(or 31.2%), medical services received $21.2 billion (or 18.3%), and expenditure on medications received $16.3
billion (or 14.0%) (Table 4.1, p.44).
Over the 10 years to 2009‐10, average annual expenditure on research was the highest real growth in total
recurrent expenditure (12.0%). This was followed by 8.4% annual average growth in expenditure on
medications (p.43 and table A8).
Between 2003‐04 and 2009‐10, expenditure on public hospitals accounted for the largest amount of real
growth in recurrent health expenditure ($10.1 billion or % 31.8%) (Table 4.2, p.43).
Between 1999‐00 and 2009‐10, real growth in public and private hospitals expenditure averaged 4.9% and
5.6% per year, respectively (Table 4.3, pp. 49‐50).
The Australian Government’s funding of public hospital services in 2009‐10 ranged from 27.9% in the ACT to
51.4% in TAS (Table 4.9, pp.57‐58). For the same period, the non‐government share of funding ranged from
2.1% in the ACT to 9.7% in VIC.
In 2009‐10, state government purchases of private hospital services in WA, TAS, VIC and NT accounted for
19.6%, 5.7%, 2.8% and 1.6%, respectively, of total revenue of private hospitals in the respected states (Table
4.0, pp. 59‐60).
In 2009‐10, total expenditure in patient transport services was $2.6 billion. Of this, state and territory and
local governments’ share was 64.9%, non‐government sources funded 24.4% and the Australian
Government’s share was 10.7% (p.61).
In 2009‐10, Medical services out‐of‐pocket expenditure increased, in current prices, by 10.3% or $246 million
(p.61).
Between 1999‐00 and 2009‐10, the weighted average fee charged for medical services provided under
Medicare increased by 5.7% per year (table 4.11, p.63). Whilst at the same time, the weighted average
benefit paid increased at a lower annual rate of 4.9%. As a result of this combination, the average
copayments increased at a faster annual rate of 8.6% (p.61).
In 2009‐10, the total amount spent on pharmaceuticals for which benefits were paid was $9.6 billion, an
increase of 7.5%, in real terms, from the previous year (Table 4.14, pp. 67‐68).
In 2009‐10, the government spent an estimated $8.4 billion on Pharmaceutical Benefits Scheme (PBS) items,
an increase of $500 million from 2008‐09 (Table 4.17, pp.72‐73).
In 2009‐10, $7.7 billion was spent on dental services. Of this, individuals funded 61.1% compared to 24.5%
funding by governments (p.76).
In 2009‐10, capital expenditure on health facilities and investments was 4.2% (or $5.0 billion) of total health
expenditure (p.79).
Over the 10 years period to 2009‐10, capital expenditure on health goods and services by non‐government
sectors accounted for approximately 40% to 70% of all capital health expenditure. Over the same period,
government capital expenditure on health goods and services varied between 30% and 60% (Table 4.23,
p.79).
4 International comparisons
According to the Organisation for Economic Co‐operation and Development (OECD) definitions, Australia’s
health to GDP ratio was 9.1% compared with the 9.6% median in 2009 for member states of the OECD (Table
5.1, pp.83‐84). Average per person expenditure on health in Australia was $5,287 in 2009.
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In the same period, the United States spent 17.4% of its GDP on health, the highest spender on health care in
2009, with an average $11,940 per person (table 5.1, pp. 83‐84).
Over the 10 years period to 2009‐10, the government contribution to funding of health care in Australia rose
by 1.7%, while the average government share for the OECD overall increased by 2.4% (Table 5.2, p.86).
In 2009, Australia’s health to GDP ratio was 9.1%. Of this, the Australian government share was 5.8%, which
was 1.1% below the OECD median, 2.4% below the United Kingdom, 2.3% below Canada and 2.5% below the
US (table 5.2, p.86).
In 2009, Australia’s average out‐of‐pocket health expenditure per person was $900, which was $50 below the
weighted OECD average (table 5.3, p.87).
5 Key Contacts
Barbara Carney
Director, Policy and Research
Email: barbara.carney@apha.org.au
Tel: (02) 6273 9000
Mehrdad Khodai‐Joopari
Manager, Research and Data
Email: mehrdad.khodai@apha.org.au
Tel: (02) 6273 9000
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