1. Health system opportunities

Australia’s healthcare costs have been out-growing its wealth (Gross Domestic Product) by 1-2 percent per year over the past half century. This is not necessarily a bad outcome nor out of line with other first world nations – we ought to afford more healthcare as we get wealthier. However, healthcare expenditure has passed the tipping point of being sustainable. Current trajectories will mean all State Government revenues will be spent on health by 2046 (no more spending on schools, roads etc.) and private health insurance will not survive its current downward spiral, where costs are rising at 8 percent each year and there is declining membership of well Australians each year to pay for this expenditure.

Our ageing population, rising consumer expectations, increasing prevalence of chronic disease, and proliferation of new technologies and services will drive up demand for healthcare services, as well as the price of each service. Whilst 14 percent of our population is over 65 years old today, of whom 4 out of 5 have chronic health conditions, this cohort will grow to 22 percent by 2046. The cost of managing chronic diseases such as diabetes, neurological and musculoskeletal conditions will multiply by 4.4x, 3.6x and 2.2x respectively over the next 20 years.

Primary care can be part of the solution – improving our health system upstream can have substantial impacts downstream. For example, currently only 50 percent of chronic conditions are managed according to freely available clinical guidelines, resulting in half of clinical markers (such as HbA1c or systolic BP) meeting desired targets. As a consequence, patients suffer avoidable complications or exacerbations of their chronic conditions, and end up in hospital unnecessarily for unplanned presentations or elective procedures up to 40 percent of the time. Whilst we know this is not cost effective (a GP consult costs up to $80 whereas a typical hospital stay costs $5000), it is our patients that suffer. Any of us with loved ones that have complex or chronic health conditions will know that healthcare is often fragmented, not coordinated, inconvenient and ironically, uncaring; unlike other service industries, the VIP customers of our health system often get the worst experience.

Australia’s health system is well poised for new innovations to tackle these challenges.


  • WHO Health report and OECD health expenditure reports
  • One in Four Lives Report
  • AIHW Australia’s Health publication
  • National Health Survey
  • AIHW Health expenditure forecast 2033
  • MJA: CareTrack study 2012
  • Australian Diabetes Care Project, Federal Health Department