Report: Federal share of health funding down 2% over decade

THE COST of keeping Australians healthy has jumped about 70% in the past decade, but Canberra is already paying a smaller share of the costs, a key national report showed today.

The Australian Institute of Health and Welfare Australia's Health 2014 report has highlighted inconsistencies in the Abbott government's arguments that cuts are needed to rein in the rising costs of health.

While it showed the national cost of delivering health rose 70% to $140 billion from 2001-02 to 2011-12, Canberra's share has shrunk almost 2%.

The Federal Government continues to fund the lion's share of costs, at 42% in 2011-12, but that fell from 44% a decade ago, while states have picked up the cost, up from 23% to 27% of the national health bill in the same period.

Health Minister Peter Dutton said the report showed health expenses for each Australian rose from $4276 in 2001-02 to $6,230 in 2011-12.

"It's for these reasons that we acted in the 2014-15 Budget to build sustainability into our health system and to set it on a sure footing for the future," he said.

"By asking people to make a modest $7 contribution to the cost of their own healthcare, we're in a much stronger position to safeguard our health system from collapsing under its own weight."

But his comments came as Prime Minister Tony Abbott reportedly gave the first signal he was willing to negotiate on the controversial GP co-payment.

After a meeting with Mr Abbott in Canberra on Wednesday, Australian Medical Association figures - a group highly critical of the tax - said Mr Abbott told them "alternative models" could be put on the table.

But in parliament later, Mr Abbott said the government was determined to go ahead with the tax, and despite the mixed messages, it remains one of the key budget measures the new Senate is unlikely to pass without significant changes.

Labor's health spokeswoman Catherine King said on Wednesday the AIHW report made an "absolute nonsense" of government claims health spending was unsustainable.