ASIA
15 April 2015
Australia’s healthcare has good vital signs
Australia’s healthcare has good vital signs, but sustainability, costs and sources of funding are critical areas, says Frost & Sullivan.
Australia’s healthcare has good vital signs, but sustainability, costs and sources of funding are critical areas, says Frost & Sullivan.
In 2013, Australia’s healthcare per capita hit A$6,200 per annum, making up 9.3% of GDP. This ranks the highest in the Asia Pacific region in terms of expenditure per capita; and second highest as a percentage of GDP; exceeded slightly only by Japan. From 2013 to 2020, Australia’s spending is expected to increase at a CAGR of 3.2% from A$190 billion in 2013 to A$238 billion in 2020, accounting for nearly 10% of GDP then.
In 2013, Australia’s public expenditure was 68% after Japan in first place at 83% and Thailand second at 76%. Healthcare expenditure broken down by sector was 38% in hospitals, 36% in primary care, 20% in capital expenditure and 6% in other recurrent areas. Primary healthcare expenditure increased 61.8% in the last 10 years.
“Naturally with these statistics, sustainability of current levels of expenditure, cost management, and sources of funding are essential factors that need addressing. Privatisation of government health service and government funded R&D will be strong focus areas”, said Rhenu Bhuller, Partner and Senior Vice President, Healthcare, Frost & Sullivan Asia Pacific.
“While Government spending will focus on development of public healthcare infrastructure, adoption and implementation of technology and chronic and infectious diseases control and treatment, private healthcare spending is expected to see consistent growth to 2020 with out-of-pocket spending expected to rise at more than 8% each year”, said Bhuller.
State and territory government funding for hospitals have increased by 78.6% over the last 10 years while non-government expenditure on hospitals increased by 88.6%. In 2013, Australia had 1,355 hospitals, and this is expected to grow largely through more public-private partnerships; such as the Bendigo Hospital and HP with the Royal Adelaide Hospital.
68% of healthcare funding was by the government, whilst 32% was non government spending. Over 2012 and 2013, out-of-pocket spending in Australia grew 8.2% and non-government spending increased 10%. Year-on-year growth in both these areas was more than government spending, indicating the increasing contribution from individuals in healthcare payments.
The key trends for healthcare in Australia will be that increasingly, consumers will be given responsibility for health, complementary therapies will gain recognition, competition in aged care will intensify, integrated platforms will be a necessity for chronic disease management and a rise of GP super clinics will be inevitable to reduce the load on hospitals.
An aging population and rising incidence of chronic conditions like cardiovascular and pulmonary diseases are forcing the government and healthcare providers to take a two pronged approach towards improving health quality and reducing cost of care through exploring chronic disease management programs that help patients stay out of the hospital; and adopting population health management programs that reduce disease cost and risk over a sizeable population.
“Moving healthcare delivery from hospitals to primary and community care is a prerogative for the government. Various public and private providers are exploring technology based solutions to improve efficiency of healthcare services, as well as drive changes in consumer behaviour towards preventive healthcare," Bhuller said. Aged care products and services in areas like home healthcare and remote patient monitoring will be crucial to support independent aging and aging in place.
In 2013, Australia’s healthcare per capita hit A$6,200 per annum, making up 9.3% of GDP. This ranks the highest in the Asia Pacific region in terms of expenditure per capita; and second highest as a percentage of GDP; exceeded slightly only by Japan. From 2013 to 2020, Australia’s spending is expected to increase at a CAGR of 3.2% from A$190 billion in 2013 to A$238 billion in 2020, accounting for nearly 10% of GDP then.
In 2013, Australia’s public expenditure was 68% after Japan in first place at 83% and Thailand second at 76%. Healthcare expenditure broken down by sector was 38% in hospitals, 36% in primary care, 20% in capital expenditure and 6% in other recurrent areas. Primary healthcare expenditure increased 61.8% in the last 10 years.
“Naturally with these statistics, sustainability of current levels of expenditure, cost management, and sources of funding are essential factors that need addressing. Privatisation of government health service and government funded R&D will be strong focus areas”, said Rhenu Bhuller, Partner and Senior Vice President, Healthcare, Frost & Sullivan Asia Pacific.
“While Government spending will focus on development of public healthcare infrastructure, adoption and implementation of technology and chronic and infectious diseases control and treatment, private healthcare spending is expected to see consistent growth to 2020 with out-of-pocket spending expected to rise at more than 8% each year”, said Bhuller.
State and territory government funding for hospitals have increased by 78.6% over the last 10 years while non-government expenditure on hospitals increased by 88.6%. In 2013, Australia had 1,355 hospitals, and this is expected to grow largely through more public-private partnerships; such as the Bendigo Hospital and HP with the Royal Adelaide Hospital.
68% of healthcare funding was by the government, whilst 32% was non government spending. Over 2012 and 2013, out-of-pocket spending in Australia grew 8.2% and non-government spending increased 10%. Year-on-year growth in both these areas was more than government spending, indicating the increasing contribution from individuals in healthcare payments.
The key trends for healthcare in Australia will be that increasingly, consumers will be given responsibility for health, complementary therapies will gain recognition, competition in aged care will intensify, integrated platforms will be a necessity for chronic disease management and a rise of GP super clinics will be inevitable to reduce the load on hospitals.
An aging population and rising incidence of chronic conditions like cardiovascular and pulmonary diseases are forcing the government and healthcare providers to take a two pronged approach towards improving health quality and reducing cost of care through exploring chronic disease management programs that help patients stay out of the hospital; and adopting population health management programs that reduce disease cost and risk over a sizeable population.
“Moving healthcare delivery from hospitals to primary and community care is a prerogative for the government. Various public and private providers are exploring technology based solutions to improve efficiency of healthcare services, as well as drive changes in consumer behaviour towards preventive healthcare," Bhuller said. Aged care products and services in areas like home healthcare and remote patient monitoring will be crucial to support independent aging and aging in place.