Australians are living longer with the life expectancy of women reaching almost 84 and men almost 80.
But we are also spending more time in ill-health - 13.36 years for women and 11.28 years for men.
Australia is in line with the rest of the world, according to an international analysis of all major diseases and injuries in 188 countries from 1990 to 2013.
Globally people are living longer, even in some of the poorest countries, with life expectancy rising by more than six years to 71.5.
"Thanks to marked declines in death and illness caused by HIV/AIDS and malaria in the past decade and significant advances made in addressing communicable, maternal, neonatal, and nutritional disorders, health has improved significantly around the world," say the researchers.
In Australia, women's life expectancy increased by almost four years to 83.99 and men by almost six years to 79.71.
But the years spent unwell increased by around a year for women and almost 18 months for men.
Ischemic heart disease, lower respiratory infections, and stroke cause the most health loss around the world.
In Australia, the top three causes were low back and neck pain, ischemic heart disease and depressive disorders.
But the fastest growing causes of health loss in Australia since 1990 were diabetes for men and Alzheimer's disease for women.
"The world has made great progress in health, but now the challenge is to invest in finding more effective ways of preventing or treating the major causes of illness and disability," said Professor Theo Vos, lead author of the study, published in The Lancet.
Co-author, Dr Alan Lopez, from the University of Melbourne, said the study showed the Australian health system was working in enabling people to live longer.
"But that's not enough," he said.
"We also want our longer lives to be healthier.
"To do this, we must address the conditions that are increasingly contributing to health loss like Alzheimer's disease and depression."
Japan has the highest healthy life expectancy at 73.4 years, while Lesotho the lowest at 42 years.
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