Out-of-pocket health costs spiralling

The Government spent $185.4 billion on health services and products in 2017-18 – or $7485 per person – according to a report released yesterday by the Australian Institute of Health and Welfare (AIHW).

Spending increased by $22.2 billion or 1.2 per cent, which was lower than the decade average of 3.9 per cent.

The report found that patients spent $3.9 billion on out-of-pocket hospital expenses in 2017-18, up $560 million or 17 per cent over the financial year, and quadruple the amount spent a decade earlier.

Specialist out-of-pocket costs increased by almost $200 million in 12 months, and GP out-of-pocket costs rose by $38 million.

We also spent $9.4 billion on medicines and pharmacy products not listed on the PBS.

The Age reports that the AIHW figures show the growth in federal health spending in 2017-18 was almost four times slower than the increase in tax revenues.

“The Coalition government spent $77.1 billion on health in 2017-18, up 3.4 per cent on the previous year, while it collected $308.7 billion in taxes – an increase of 12.6 per cent.”

Grattan Institute health economist Stephen Duckett said the growth in out-of-pocket costs was “a serious concern, especially at a time when household budgets are under pressure because of flat wage growth”. He added that future reforms to the private health insurance system must examine in-hospital out-of-pocket costs.

“It may mean people will find it harder to afford to see a doctor, with long-term health consequences,” he said.

Dr Duckett said that while the number of GP services to be bulk-billed had risen over the same period “for those who are not being bulk-billed, the out-of-pockets are going up – and for specialists, there’s just basically no control over their fees”.

He said the Government needed to do more to address overcharging by specialists and that Health Minister Greg Hunt’s promised fee transparency website was “never going to work” because it was voluntary.

Contributions to health spending by private health insurers rose by $400 million to $16.6 billion; however, the number of people with private health cover dropped in the 12 months between 2016-17 and 2017-18 by about 33,000 to 11.3 million – the first decrease over the past decade.

In 2017–18, private health insurers spent an average of $1470 per person covered, compared with $1043 in 2007–08.

The $30.6 billion Australians spent on their health included $9.4 billion on medicines and pharmacy products not listed on the PBS; $6 billion on dental, and $4 billion on medical specialists and allied health professionals such as physiotherapists, optometrists and podiatrists.

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Written by Janelle Ward

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