Australia's private health expenditure to balloon to $67.7b

It will be 36% of total health spending.

The private sector will play an increasingly important role in the future of healthcare provision in Australia. According to BMI Research, while the Australian government is focused on improving the delivery of public healthcare services, inefficiencies such as inadequate federal government funding, a failure to improve waiting times and health workers treating patients with fewer resources, will continue to characterise the country's public hospitals in a 'constant state of emergency'.

Australia's rising chronic disease burden, increasing health costs and limited public financing options will pose significant challenges to the healthcare sector over the coming years, thereby pushing the government to call upon private investors to provide better facilities and access to more specialised care.

Here's more from BMI Research:

In the long term this will shape commercial opportunities for private healthcare providers and foreign drugmakers. Highlighting the importance of strengthening private sector healthcare investment - private spending on healthcare represented around 33% of total health expenditure in 2016, according to the World Health Organization (WHO).

Over the next decade we forecast private health expenditure to grow from AUD56.1bn (USD41.7bn) in 2016 to AUD90.2bn (USD67.7bn) in 2026, at a 10-year compound annual growth rate (CAGR) of 4.9%, representing around 36% of total health spending.

In line with the efforts to contain public healthcare expenditure in Australia, the most growth seen over the last few years has been in the private sector. Over 2011-15, the number of public hospitals remained constant at around 700. However, the number of private sector hospitals showed stronger growth.

From 2011-15, the number of private hospitals increased from 592 to 630. The two largest for-profit hospital operators a re Ramsay Health Care and Healthscope that account for about 40% of all private hospital beds in Australia between them. Ramsay Health Care is the largest private hospital operator in Australia with 73 facilities located throughout the country.

In August 2017, local news sources reported that the group is reviewing possible acquisition deals not only in markets in which it already operates, such as the UK and France, but is also looking to expand into new countries like Spain, Germany, Scandinavia and Asia.

In November, Ramsay received regulatory approval to acquire Malouf Pharmacies, which is one of Australia's leading pharmacy brands and the largest privately owned pharmacy group in Queensland, employing more than 450 staff.