Western Australia's health costs have tripled over the past decade, adding to the State Government's significant budget woes and prompting a system-wide review of spending.

Reducing the rate of growth in the health sector will be a monumental challenge for the Government, particularly given WA's hospitals are more expensive than those in other states.

But why are health costs so high in WA and what can be done about it?

How much is our geography to blame?

One of the reasons for WA's elevated health care costs is the sheer size of the state.

"In WA we've got a lot of very small hospitals which are a long way away from the big services and that limits what we can do out near people's homes," Australian Medical Association WA president Omar Khorshid said.

The wages for health professionals have been outstripping the CPI. ( Flickr: Zsenko Zivkovic )

Under the national Activity Based Funding (ABF) model for hospitals, states and territories receive loadings based on the "remoteness" of a patient's postcode.

Health Minister Roger Cook believes the formula is unfair, because Tasmania received a larger increase in funding due to remoteness loading than WA did when the ABF model was brought in two years ago.

However, Grattan Institute health program director Professor Stephen Duckett argues location only contributes a small amount to WA's higher costs.

"If you look at the costs of the major hospitals in Perth, they're more expensive than major hospitals in other states and territories," Professor Duckett said.

"You can't blame dispersion and location geography reasons for that."

What about health workers' wages?

For the past seven years, wages for health professionals have outstripped the consumer price index (CPI).

The divergence between wages and CPI varies, but for some professions, such as nurses, salary growth has been up to five times the rate of inflation.

Data from 2015 showed WA doctors receiving the highest pay among their peers across the nation, at every level of experience.

This presents a significant challenge for the Government, given wages are set for the duration of enterprise bargaining agreements.

"Seventy per cent of the costs of hospitals are for staffing, so the scope for savings is going to be limited if you only focus on [the other] 30 per cent," Professor Duckett said.

Too wealthy for too long?

Health economists argue WA's strong economic growth during the mining construction boom meant there was no impetus for cost control.

Strong population growth and expensive new infrastructure, including Fiona Stanley Hospital, put added pressure on the health budget.

"I think it's basically policy reasons that you're ending up with higher costs," Professor Duckett said.

"Because Western Australia has been a wealthy state for so long, there hasn't been the efficiency drive that other states have seen."

So what can be done about it?

The wages for health professionals might be fixed for now, but there are other options to reduce staff costs, including:

Lower staff levels

Lower staff levels Roster changes to reduce the cost of overtime or other entitlements

Roster changes to reduce the cost of overtime or other entitlements Shortening the length of stay for patients

WA has a smaller share of GPs per capita than other states.

Experts say increasing the number of GPs in WA would alleviate pressure on the health system, by shifting patients from hospital emergency departments to primary care.

"If we can deliver good quality care in general practice, that allows us to rely less on hospitals," Dr Khorshid said.

Grattan Institute's Stephen Duckett said the Government should also look at the distribution of services, given the relatively recent opening of Fiona Stanley Hospital.

"Was the planning for [Fiona Stanley Hospital] predicated on a tighter rationalisation of Royal Perth and other hospitals, and has that occurred?" Professor Duckett said.

"Are West Australian hospitals paying more for drugs and other supplies than other states are? Are staffing levels appropriate?"

"There are a number of things you could look at which don't address, for example, contemporary industrial agreements."