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02 Dec 2019


Many Australians compare our healthcare system to that of other countries, and rightly feel proud. As a nation we love brand Medicare. We love the idea of universal free access to public hospitals.

We similarly take pride that our health system runs at almost half the cost of the healthcare system in the United States. This is an often-repeated fact, which is again a fact we should be proud of.

The World Bank reports current health expenditure as a proportion of gross domestic product was 17.07 per cent in the United States in the most recent reporting year of 2016, compared to almost half at only 9.25 per cent in Australia. 

Implicit in the US-Australian comparison is the message of more from less. It’s widely known patients in the United States miss out on medicines and service access to health care that Australians take for granted, yet our system costs only half us much to run.

Focusing on the US-Australia comparison ignores what are possibly more useful comparisons. Australia is often compared to Canada, which spends 10.53 per cent of its GDP on health care. Average health care expenditure across European countries is 10.22 per cent, or across OECD countries is 12.59 per cent.

In Australia, we’re surely at the end of more service from less expenditure. Signs of an over-stretched health system have long been present. Yet Governments around the country are more focused on budget surpluses than they are on funding patient outcomes. 

Pick a measure, any measure, and evidence of the stretched system is apparent.

Victoria is expecting jumps in public hospital waiting lists next year, at some hospitals by up to 50 per cent.

The Royal Darwin Hospital budget is so stretched its morgue is often overflowing. Grieving families are forced to gather in the heat of a car park rather than somewhere with dignity.

General Practice training places are undersubscribed, again. Low take-up in part reflects insufficient incentives from declining value of the MBS over many years.

It shouldn’t be a competition for which State or Territory is worse, but reality is that just about every part of health care is stretched to capacity. Years of forced efficiencies, cost containment, and indexation freezes have taken a toll.

Whenever the AMA or others raise the need for more investment in health, the response of Health Ministers around the country is the same: “Record spending in health!” Yet the record spending claim is a result of population growth. Just to keep up with babies born and immigrant arrivals, new records need to be set each year.

Yet no Health Minister has ever said funding levels have been set to meet the actual cost of care delivery matched to growing population demand. The health system makes do with what it receives, rather than being funded to the level it needs.

With comparable countries spending more on health care than Australia, it’s time the funders of our own healthcare system took stock.

Lifting health expenditure to the average of Europe, Canada, or the OECD would likely prevent Victoria’s hospital waiting lists blowing out, build a new morgue in Darwin, and provide sufficient incentive to sustain a career in General Practice. 

If the AMA doesn’t argue for more health expenditure, who will?


Published: 02 Dec 2019