A report on government services by the Productivity Commission reveals that state and territory spending on healthcare grew by an average of 6.2 per cent annually in the decade to 2005-06, whilst commonwealth spending grew by an average of only 4.9 per cent.

And while the states have directed increased funding to public hospitals, the commission says a "significant factor" in the commonwealth's extra spending has been its support for the private system, via the 30 per cent rebate on private health insurance premiums. As a result, while overall government spending on public hospitals grew by an average of 7.9per cent annually in the decade to 2005-06, average spending on private hospitals grew by 25 per cent. Another indication of the development of a two tiered health system?

The figures confirm a report released last October by the Australian Institute of Health and Welfare that showed the federal government share of public hospital funding fell from 45 per cent to 41 per cent between 1995-96 and 2005-06, while the states' share rose from 46 per cent to 51 per cent.

However, we still have no way to compare hospitals or hospital systems in, and between, the states. So it is difficult to pinpoint what is working and what isn't working. So there needs to be a single set of data for private and public hospitals to pinpoint the problems.