In 25 years, health expenditure has increased faster than inflation, and has increased as a function of GDP in Australia.
The Australian Institute of Health and Welfare released a report, 25 years of health expenditure in Australia, to present data from 1989–90 to 2013–14 describing some of the key trends and explores the relationships between health expenditure and its drivers.
Over the 25-year period, health expenditure grew much faster than:
- Inflation-growing from $50.3 billion in 1989-90 to $154.6 billion in 2013-14 in real dollars
- The population-with per person expenditure increasing by 123.5%
- Population ageing-with the ratio of total spending to the size of the population aged 65 and over increasing by 69.0%.
Health expenditure increased from 6.5% of gross domestic product (GDP) in 1989-90 to 9.7% of GDP in 2013-14. However, it did not grow faster than government revenues and the wealth of individuals at all stages in the entire 25-year period.
During periods of relatively slow revenue growth, health expenditure grew greater than growth in taxation revenue. Non-government health expenditure tended to keep pace with growth in individual net worth over the period, but was faster than growth in average incomes.
Demand for health goods and services is likely to be influenced by some factors such as population growth and population ageing, development of new technologies and community expectations regarding their availability and use. Increased demand for health goods and services does not automatically translate into increased health expenditure, though.
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