OECD Analysis: Australia's Spending On Health Is Much Lower Than In The US

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Australia’s health spending is slightly lower than the average of developed countries but is well below that of the United States, according to analysis by the OECD (Organisation for Economic Co-operation and Development).

Total health spending accounted for 9.1% of GDP in Australia in 2011-2012, slightly lower than the average of 9.3% in OECD countries in 2012.

But Australian spending was much lower than the United States, which spent 16.9% of its GDP on health in 2012, and in a number of European countries including the Netherlands, France, Switzerland and Germany (which all spend more than 11%).

The public sector is the main source of health funding in nearly all OECD countries. In Australia, 68% of health spending was funded by public sources in 2011-2012, below the average of 72% in OECD countries.

This chart shows how Australia compares to other OECD countries:

The OECD says that unlike in many other OECD countries, health spending in Australia has hardly been affected by the economic crisis.

In 2011-2012, health spending in Australia has gone up by over 5% in real terms compared to a 1% increase on average across OECD countries.

“This strong increase in Australia was triggered by substantial growth in spending on outpatient curative care, administration and public health services,” says the OECD health statistics update.

The growth rate in pharmaceutical spending in 2011-2012 in Australia was fairly modest but this followed strong growth rates of over 6% per year in real terms in years prior to that.

In most other OECD countries, expenditure for pharmaceuticals has been declining since 2010.

Generally, Australia gets a good report on the health of the population.

Life expectancy in Australia remains among the highest in OECD countries, following Japan, Iceland, Switzerland, Spain, Italy and France. In 2012, life expectancy at birth in Australia was 82.1 years, almost two years higher than the OECD average of 80.2 years.

The OECD says Australia has achieved remarkable progress in reducing tobacco consumption, cutting by more than half the percentage of adults who smoke (from 35.4% in 1983 to 15.1% in 2010).

The smoking rate in Australia is now one of the lowest in OECD countries.

The OECD report says:

“Much of this decline can be attributed to policies aimed at reducing tobacco consumption through public awareness campaigns, advertising bans and increased taxation. As of 1 December 2012, Australia became the first country in the world to require tobacco products to be sold in plain packaging.”

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