Australia’s healthcare system has long been a point of national pride, with universal coverage through Medicare, a mix of public and private care, and comparatively good health outcomes. But lately, mounting expenditure and ballooning costs are creating ripple effects across households, providers, and the system as a whole.
Increased Household Burden
One of the most immediate impacts is on individuals and families. According to the Australian Institute of Health and Welfare (AIHW), in 2023-24, Australia spent around $270.5 billion on health goods and services, about $10,037 per person. While government funding covers a large share, there remains a significant out-of-pocket component.
For many Australians, the rising cost of care is already causing delays or even avoidance of treatment. Reports suggest that about one in ten people in more disadvantaged areas delayed or skipped prescription medicine because of cost, and that cost-of-living pressures are leading some to delay seeking medical care.
If you’re watching every dollar you spend on groceries, fuel and bills, seeing the doctor or filling scripts starts to look like another squeeze. That’s particularly problematic for people with chronic illness, lower incomes or living in regional and remote areas.
Strain on Providers
Rising costs don’t just affect patients, they also impact the providers. For example, health sector inflation in Australia has been very high. In 2024, the consumer price index for health rose by 6.1% in the 12 months to April, putting pressure on general practices and clinics to either absorb costs, raise fees, or reduce bulk-billing.
In other words, the system that Australians take for granted as relatively affordable is under pressure. If providers can’t maintain viability while delivering care, then what’s affordable today may not stay that way.
Widening Inequities and Regional Disparities
Another impact is the risk of deepening inequities. When costs rise and rebates or subsidies don’t keep pace, people who are less well-off are the most vulnerable. For instance, specialist fees in some cases are increasing well beyond the Medicare rebate, meaning that the “gap” to be paid by the patient is growing. If you live in a remote region, have fewer service options and less disposable income, then rising costs can become a major barrier.
Pressure on Public Budgets and Future Sustainability
From a government point of view, rising health costs mean bigger budgets, tougher choices and constraints on other areas. The funding model (for Medicare, public hospitals, subsidised medicines) is based on certain assumptions about cost growth, demand and technology. But with an ageing population, more chronic disease, and more advanced (and more expensive) treatments, the growth trajectory is steeper than historical norms. Reform and innovation are necessary but often costly upfront.
Rising healthcare costs pose a threat to the sustainability of the system as Australians currently understand it. Whether through increased taxes, higher out-of-pocket fees, or reduced service levels, the question becomes how to maintain quality, universal care in the face of financial pressures.
What this Means for Future Public Health Professionals
For those in, or aspiring to, the field of public health, the trajectory of rising healthcare costs offers both challenge and opportunity. Those who earn a Master of Public Health are well-placed to help design solutions by analysing cost drivers, designing efficient service models, spearheading prevention initiatives to reduce downstream costs, and advising on policy reform.
Prevention, health promotion and efficient system design become more critical when delivery costs are high. The more we can focus on reducing avoidable illness, optimising existing resources and ensuring equitable access, the better equipped the system will be for the pressures ahead.
Taking Action
What can individuals and systems do to respond to the impact of rising costs?
To respond to the impact of rising costs, stay on top of your health proactively, understand your out-of-pocket exposure, and consider whether additional cover or services are required.
Providers can explore efficiencies, lean service models, telehealth, task-shifting, partnerships and introduce a stronger primary-care and early-intervention focus, all things which may help reduce cost escalation.
The rising cost of healthcare in Australia is no longer a distant challenge, it’s present, affecting households, providers, access and system sustainability. It means more people are paying more, delaying care, or getting less. It means providers and hospitals are under pressure, and it means governments face an uphill battle to maintain universal access without simply shifting the burden onto individuals. If Australia is to continue offering healthcare for all, then smart prevention, efficient delivery and equitable funding models are key.
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