As Australia’s population continues to age, more people are requiring health and aged care services. While this will put added strain on the public health care system, aged care residential service providers, and public and private hospitals are set to benefit from increased demand.
The population aged 70 and over is forecast to grow at an annualised 3.7% over the five years through 2022-23. Chronic health issues, such as cardiovascular disease, are more likely to affect older people than younger demographics. As a result, total health expenditure is projected to grow at a similar rate over the same five-year period. Australia’s ageing population has seen more people require specialised medical treatment and aged care services.
Aged care residential service providers have started offering a variety of lifestyle accommodation options and services in recent years. These options, alongside flexible pricing and rising government funding, have driven growth for this industry. Investors have become increasingly attracted to the aged care sector as demand rises for the construction of new facilities.
Residents are increasingly demanding a seamless transition through different care stages. This, combined with the government’s ‘ageing in place’ principles (which allow people to live in their residence of choice for as long as possible), is encouraging innovation in aged care services. Revenue for aged care residential service providers is expected to rise to $27.8 billion by 2022-23.
Because older people tend to require more hospital treatments than younger age groups, revenue for hospitals has grown at a strong rate over the past five years. For example, the Australian Institute of Health and Welfare estimates that 63% of men aged 75 and over suffer from cardiovascular disease.
People aged 65 years and over are also more likely to have private health insurance, which is contributing to increased demand for hospital services. Rising membership for private health insurance has increased demand for treatments provided in private hospitals. Private hospitals tend to have shorter waiting times for elective surgery and greater amenities, which encourage older people to take up private health insurance. Revenue for both public and private hospitals is expected to rise over the next five years, to reach $85.6 billion by 2022-23.
While Australia’s ageing population represents a challenge for government funding plans, sectors that provide services to this growing demographic are benefiting from rising revenue. Revenue growth is expected to accelerate over the next five years, as increasing numbers of older people enter aged care residential facilities and require more frequent treatment for illness and chronic diseases.
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