The OECD study also found 16 per cent of Australian adults skipped medical consultations due to high costs. This suggests pent-up demand for healthcare. ANZ Research sees this evolving into actual demand if household incomes rise above the rate of healthcare prices.
This is not necessarily how household incomes and healthcare prices will evolve. ANZ Research expects health prices are likely to remain higher than inflation and strong growth in household income is unlikely. However, it is possible technology will reduce the price of some medical services, therefore leading to some strong pockets of strength.
Preventing disease and improving coordination and data collection in the healthcare system are some of the top priorities for governments in Australia.
As well as needing to spend more because their populations are ageing, Australian governments have chosen to prioritise improved health outcomes, given the positive impact a healthy population has on wellbeing, workforce participation and economic growth.
Australia still has scope to increase its expenditure in line with other developed economies such as Sweden, Switzerland, Norway and the USA. In each budget, there are new health initiatives on top of existing policies.
In the 2019-20 Federal Budget, Medicare and aged-care funding were boosted and $A5 billion was committed to a 10-year Medical Research Future Fund investment plan.
The National Disability Insurance Scheme will grow very strongly over the coming four years to reach 1 per cent of gross domestic product in 2020-21.