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Health Insurance Australia

Private Health Insurance News

Australia currently spends 9.1% of GDP on health, which is around the average for OECD countries. Various projections have been made of future growth of health care costs given current trends, new technology and predicted demographic changes. The 2007 Intergenerational Report projects that Australian government spending on health alone, as a percent of GDP, will nearly double in the forty years from 3.8% in 2006/07 to 7.3% in 2046/47.[1] Others have predicted that total health spending will increase to 12.5% of GDP by 2042.[2]

Of course, the amount we spend on health is a matter of choice and this will be heavily influenced by the overall strength of the economy. However, the Australian Government’s share of growth in health costs must create significant policy concern, if only for the contribution it makes to the size of the government deficit the Intergenerational report predicts. This will become even more of a focus if the Commonwealth does, as it should, become the single funder of Medicare entitlements.

This further raises the stakes on concerns I have about the sustainability of the governance arrangements we have in place for Medicare.




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