Non-PBS medications are driving patient out-of-pocket health costs, with a new report showing Australians spent $30.6 billion on out-of-pocket health-related expenses in 2017-18.
The Australian Institute of Health and Welfare (AIHW) report Health expenditure in Australia 2017-18, showed that individuals spent $9.4 billion on medications that were not subsidised through the PBS; with $6 billion on dental services; and $4 billion on referred and unreferred medical services.
AMA President Dr Tony Bartone said it was clear that the greatest contributor to patient out-of-pocket costs continues to be non-PBS medications, which includes vitamins and minerals and complementary therapies that are purchased over the counter at pharmacies.
“Medical costs make up only 13.1 per cent of out-of-pocket expenditure for individuals,” Dr Bartone said.
“The AIHW report shows clearly that there is little change overall in national health spending.
“Medical services are not the highest or even second highest area of expenditure for an individual.
“The greatest contributor to patient out-of-pocket costs is over the counter medications, vitamins, and health-related products, many of which have no proven efficacy.”
Dr Bartone said one of the most telling statistics in the AIHW report is that total spending per person was $27 (‑ 0.4 per cent) less per person than in the previous year.
“This is in spite of the ageing of the population, an increased complexity of the caseload, and the advent of new and more expensive interventions,” he said.
“We need to increase health funding enough to keep up with an increasing and ageing population with more complex health needs.
“Maintaining funding at the same level will only see the situation get worse for our overstretched hospitals and patients waiting for their care.”
The AIHW report shows almost $7,500 per person was spent on health goods and services in Australia during 2017-18, totaling more than $185 billion nationally.
Total health spending increased by $2.2 billion in 2017-18 to $185.4 billion in constant prices.
“This was a 1.2 per cent increase on 2016-17 against a backdrop of 3.9 per cent average annual growth over the decade,” said the AIHW’s Dr Adrian Webster. “The lower growth rate in 2017-18 was partly due to the previous year having included one-off capital expenditure on projects such as the new Royal Adelaide Hospital. It was also a result of a previous spike in Australian Government spending on new drugs to treat hepatitis C.
“Governments funded two-thirds ($126.7 billion) of total health spending in 2017-18, with the Australian Government contributing $77.1 billion – $1.8 billion more than the previous year.”
State and Territory governments spent $49.5 billion – $1.3 billion less than the previous year.
“Health expenditure by governments represented 24.4 per cent of tax revenue, a decline from 2016-17 where 26 per cent of tax revenue was spent on health,” Dr Webster said.
“The decline in health expenditure as a proportion of tax revenue was primarily due to relatively rapid revenue growth when compared with previous years.”
In 2017-18, personal out-of-pocket health costs amounted to an average of $1,578 per person. There was little change in the proportion of individual net worth spent on health over the decade.
Contributions to health spending by private health insurers rose by $400 million to $16.6 billion in 2017-18.
“The decade has seen an overall increase in spending by private health insurance providers per person covered. In 2017-18, private health insurers spent an average of $1,470 per person covered, compared with $1,043 in 2007-08,” Dr Webster said.
The total number of people holding private health insurance decreased by almost two million over the decade.
Shadow Health Minister Chris Bowen said the report confirmed that the Government “just isn’t getting it” when it comes to health care.
“Australians have never paid more for health care out of their own pocket while the Coalition Government’s health spending growth is going backwards,” Mr Bowen said.
“According to (the report’s) numbers, Australians spend over $30 billion a year on out of pocket health costs,” Mr Bowen said.
“This is while Government spending growth on health is at decade lows and health expenditure has reduced as a percentage of revenue.”
