Rising Cost of Good Health

Australia’s health system is facing sharply rising costs and a growing number of demands, according to a new report released on 25 June 2014.

Page last updated: 25 June 2014

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25 June 2014

Australia’s health system is facing sharply rising costs and a growing number of demands, according to a new report released today.

Minister for Health, Peter Dutton, said the Australia’s Health 2014 report confirmed that the ageing of Australia’s population, chronic diseases, consumer expectations and new health technologies were factors in the growing expense of health and hospital services.

“Australians on average are now living 25 years longer than a century ago; however, these improvements come with a rapidly rising price tag.” Mr Dutton said.

“The Australian Institute of Health and Welfare report found that total health spending in 2011-12 was around $140.2 billion, which was 70 per cent higher in real terms than a decade prior.

“The report shows that health expenditure has grown in real terms at an average rate of 5.4 per cent per year in the past decade, far outstripping growth in the broader economy, which has only been growing at 3.1 per cent.

“Health spending per person has risen from $4,276 in 2001-02 to $6,230 in 2011-12.

“Almost 70 per cent of total health spending in 2011-12 was funded by governments, with the Australian Government contributing the greatest share at 42.4 per cent.

“It’s for these reasons that we acted in the 2014-15 Budget to build sustainability into our health system and to set it on a sure footing for the future.

“By asking people to make a modest $7 contribution to the cost of their own healthcare, we’re in a much stronger position to safeguard our health system from collapsing under its own weight.”

The biennial Australia’s Health report, compiled by the Australian Institute of Health and Welfare is the most comprehensive analysis of the health of Australians and their health system.

The 2014 edition found that chronic diseases were the leading cause of illness, disability and death in Australia, accounting for 90 per cent of all deaths in 2011.

“These diseases, including cardiovascular disease, diabetes, cancer and mental health issues, are heavily linked to lifestyle decisions,” Mr Dutton said.

“Unless we can turn around our disturbingly high rates of overweight and obesity, lack of exercise and poor diet, more and more of us will develop these serious illnesses.

“In the Budget, we announced a $100 million Sporting Schools initiative to get our school children fit and active, and we committed $96 million towards bowel cancer screening.

“That’s in addition to our $20 billion Medical Research Future Fund, which will turn Australia into a world leader in the uncovering of cures to many of these conditions.”

Mr Dutton said that while there was still a way to go, reported improvements in Indigenous health were pleasing, including higher life expectancy, falling infant mortality rates and lower smoking rates.

“The Government is committed to closing the gap on Indigenous health, just as we are determined to ensure that our health system is able to deliver quality, affordable health care for all Australians into the future,” Mr Dutton said.

For more information, please contact the Minister's Office on 02 6277 7220

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