It appears Australia's health spending is not out of control

In Health spending crisis isn't real Ross Gittins has read the Australian Institute of Health and Welfare's report on total health spending in 2012-13 and concludes that our health spending is not growing unsustainably:

So how unsustainable was the growth in 2012-13? Total spending on health goods and services was $147 billion, up a frightening 1.5 per cent on the previous year, after allowing for inflation. This was the lowest growth since the institute's records began in the mid-1980s, and  less than a third of the average annual growth over the past decade.

Allow for growth in the population, and average annual health spending of $6430 per person was actually down a touch in real terms.

It gets better (or worse if you've been one of the panic-merchants). That $147 billion is the combined spending on health by the federal government, state governments, private health funds and other insurers, plus you and me in direct, out-of-pocket payments on co-payments and such like.

So total spending may not have grown much, but the federal government's share of the tab rose faster than the rest, right? Err . . . no. The opposite, actually.

The feds' health spending in 2012-13 actually fell by 2.4 per cent in real terms. The states' spending rose by 1.5 per cent, but that left the combined government spend falling by 0.9 per cent.

So it was actually the private sector (including you and me) that accounted for  most of the overall increase in spending. This is a big problem for government?

By my reckoning, out-of-pocket payments by individuals rose by 6.9 per cent in real terms. The pollies seem to have been doing a good job of shunting health costs off onto us even before the latest onslaught.

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The institute's latest figures show the federal government's real spending on health grew at an annual rate of 4.8 per cent over the five years to 2007-08, but by just 4.1 per cent over the five years to 2012-13.

Perhaps more significantly, they show that whereas the prices of health goods and services rose faster than the prices of all domestic goods and services by 0.7 per cent a year during the first five-year period, during the second period they rose by 0.2 per cent a year more slowly than other prices.