The latest Australian Institute of Health and Welfare report released on Wednesday found the country spent more than $180 billion on health in 2017-18, a 1.2 per cent increase from the year before.

But it was still lower than the 3.9 per cent average increase in spending over the previous decade.

The total $185.4 billion spend -which includes private health insurers - equated to $7485 per person, according to the institute.

As well, the growth in Australians' net worth fell short of out-of-pocket health cost rises.

Over the past 10 years, our net worth has grown 4.3 per cent each year, but our out-of-pocket health costs grew by 4.1 per cent.

Taxpayers forked out an average of $1235 per person in 2017-18, with the majority - $380 - spent on non-subsidised medications.

Australians also spend an average of $1578 in out-of-pocket costs in 2017-18.

Two-thirds of the health spend was funded by the commonwealth, as well as state and territory governments.

Hospitals received the largest share of that funding - 40 per cent of the total health spending.

More than half of what Australia spent on health costs went to NSW and Victoria combined, with those states representing more than half of Australia's population.

The Northern Territory spent more on total health costs per person than the national average, at an average of $10,857 per person.

Labor's health spokesman Chris Bowen is dismayed by the figures, saying 1.8 million Australians each year were avoiding Medicare services because of the cost.

"It couldn't be clearer that this government needs to stop sitting on their hands when it comes to the health system, and address the record out of pocket costs and record high waiting lists on their watch," he said.

Private health insurers spent $1470 per person covered in 2017-18, up from $1043 in 2007-08.

When calculating private health spending nationally, including non-insured people, private health insurers spend an average of $671 per person.

It comes as the number of people with private health insurance dropped by almost two million over the decade.

Insurers spent the least in the ACT (1.5 per cent), and the most in the Top End (4.2 per cent).

Out of the $16.6 billion spent on health costs by private health insurers, over half - $9.4 billion - was spent on hospital services.

Health spending accounted for 10 per cent of Australia's entire economic activity.

Australian Associated Press