Australia has a mixed public and private health care system.

The core feature is public, taxation-funded health insurance under Medicare which provides universal access to subsidised medical and pharmaceutical services, and free hospital treatment as a public patient.

Medicare is complemented by a private health system in which private health insurance assists with a person’s hospital treatment as a private patient, or with their dental services, or allied health services.

The health of our population
Our investment in health
Public and private hospitals
Medicare
Pharmaceuticals
Aged care
Prevention
Dental

The health of our population

Australia’s health system delivers above-average health outcomes, compared to other OECD countries, for about average expenditure when compared with other OECD countries.

Australia’s life expectancy is one of the highest in the world, second only to Japan. Males born in 2003-05 could expect to live to be 78.5 years, while females could expect to reach 83.3 years.

However, not all Australians share the same high-quality health outcomes. Aboriginal and Torres Strait Islander people experience comparatively poorer health and shorter life expectancy. The gap in life expectancy between Indigenous and non-Indigenous Australians is estimated by the ABS to be around 9.7 to 11.5 years.

Chronic disease is also a major burden on the health of Australians. In 1996, chronic disease accounted for 80 per cent of the burden of disease, measured in terms of loss of years and quality of life.

Overweight and obesity are major risk factors for many chronic diseases. In 2007-08, 61 per cent of Australian adults (aged 18+) were either overweight (36.6 per cent) or obese (24.8 per cent).

In the same year, 25 per cent of Australian children (aged 5-17) were either overweight (17.1 per cent) or obese (7.8 per cent). In the 1960s, overweight/obesity prevalence among Australian children was around 5 per cent.

Our investment in health

In 2006-07, Australia spent $94 billion on health goods and services, $4,507 per person, including spending by the Australian Government, states and territories, and private organisations and individuals.

Health expenditure was approximately 8.7 per cent of gross domestic product (GDP), in 2006-07, which is below the OECD average (8.8 per cent in the same year). In real terms health spending grows faster than GDP. Health spending was 7.7 per cent of GDP in 1996-97.

Australian Government

In 2009-10, the Australian Government Health and Ageing allocation was $42.8 billion, including $7.9 billion for aged care and population ageing programs, and $294 million for sports programs.

A further $14 billion was allocated through federal Treasury for health programs, mainly for payments to states and territories.

The total of $57 billion (which does not include health spending for veterans) is 17 per cent of the Australian Government 2009-10 spend.

Most of this – 86 per cent – is for benefits to individuals through, for example, Medicare and Pharmaceutical benefits, and Ageing and Aged Care programs, or for payments to states and territories.

Payments to states and territories for health are made through the new National Health Care Agreement and associated National Partnership Payments. These are providing $64 billion for the period 2008-09 to 2012-13.

States and territories

Health spending is about 25 per cent of state and territory health budgets (including transfers from the Australian Government for health and Goods and Services Tax revenue for health), of which about two-thirds is for hospitals.

Private sector

The private sector funds a third of total health expenditure in Australia. In 2005-06, the private sector funded 32.2 per cent of total health expenditure – including individuals’ out-of-pocket costs, health insurance funds and other private sector funds (including motor vehicle third party insurers and workers’ compensation insurers).

In June 2008, 44.7 per cent of Australians were covered for private hospital treatment by private health insurance.

Public and private hospitals

In 2007-08 there were 762 public hospitals with over 56,000 beds in Australia. This represented around two-thirds of all hospital beds. In the same year, public hospitals employed 27,000 salaried medical officers and 107,000 nurses.

In 2007-08 there were 7.9 million hospital separations (that is, people being discharged); 4.7 million of these were provided by public hospitals.

Public hospitals provide the majority of (96.6 per cent) of non-admitted hospital services. In 2007-08 these included 7.1 million presentations to emergency departments (5.3 per cent more than the previous year) and 41.3 million other non-admitted occasions of service (a visit to a hospital for a health care purpose).

Private hospitals provide the majority of procedures in some areas of acute care, such as major procedures for obesity, knee procedures, and chemotherapy.

Medicare

In 2007-08 about 87 per cent of the population saw a doctor or health provider for private medical services attracting a Medicare rebate. Medicare benefits were paid for nearly 279 million services in that year.

Almost one in four Australians will visit a doctor in any two-week period, and there are more than 137 million visits to general practitioners, or GPs (about 110 million visits) or non-specialist doctors per year. The estimated total 2009-10 Medicare benefits spend for all kinds of medical services is $15 billion.

General practice

In 2006-07, there were about 25,600 GPs providing services eligible for Medicare benefits. In full-time terms, these were equivalent to about 18,100 GPs.

In 2007-08 the Medicare benefits spend for GP services was $4.4 billion. In the June quarter 2008, GP bulk billing rates were 80.1 per cent.

There are in the order of 5,000 general practices in Australia. In 2006-07 more than half of practices had five or more GPs, though between 30 and 40 per cent of GPs are in smaller practices.

Pharmaceuticals

In 2007-08, 73.5 per cent of prescriptions dispensed by Australia’s network of more than 5,000 community pharmacies were subsidised by the Pharmaceutical Benefits Scheme (PBS) (68.0 per cent), or the Repatriation Pharmaceutical Benefits Scheme. In 2009-10 the estimated spend on the PBS is $8.2 billion.

Aged care

At 30 June 2009, there were 178,379 residential aged care places. That represents 86.9 operational residential aged care places per 1,000 persons aged 70 years and over.

In 2007-08 there were 121,915 admissions to residential aged care, of which 68,816 were for permanent care.

Community care is important to enable older Australians to stay in their own homes. The largest program in this regard is the Australian Government, and state- and territory-funded Home and Community Care (HACC) program which, in 2007-08, assisted about 831,500 people.

Prevention

It has been estimated that preventative health expenditure by governments in Australia in 2005-06 was $1.5 billion.

Associated with the current five-year National Health Care Agreement is a National Partnership Payment from the Australian Government that will provide $872 million over the life of the Partnership to the states and territories for preventative health activities.

Dental

Total expenditure on dental health in 2006-07 was $5.7 billion. About 80 per cent of the cost of dental services came from non-government sources, including about $3.9 billion in out-of-pocket payments from patients.