The growing health infrastructure pipeline

The rapid growth of Australia’s population is seeing a vast corresponding need for more health infrastructure to meet demand.

Across Australia there are now 36 infrastructure projects worth over $29 billion set to begin construction by 2025, and these numbers will continue to grow over time to accommodate the health needs of Australians.

Covering a range of projects including new, revitalised and expanded hospitals, it is imperative to understand the drivers for this need, and where it’s taking us.

Why is the pipeline growing?

The key population drivers for growing health care needs were laid out clearly in the ABS 2021 Census data. 27.7% of Australian’s report at least one or more long-term health conditions, including a variety of conditions such as arthritis, mental health conditions and diabetes, while 3% of Australian’s are living with three or more long-term conditions.

Of Australia’s 25 million+ people, 17.2% are over the age of 65, which accounts for the most health-need intensive life stage and high rates of hospitalisations, as well as a higher burden of disease.

While emergency department presentations were primarily from those over 65, the next highest presentations also occurred at the other end of the age spectrum, with 648.6 presentations per 1000 population of males under the age of four, and 548.3 per 1000 population of females under four.

The complex use of hospitals, across the spectrum of non-acute and acute needs, is also driving the demand. While hospitals did experience 11.8 million hospitalisations across Australia during 2020-21, a staggering 47 million non-admitted patient service events were also recorded, accounting for a total of nearly 59 million hospital presentations.

Where it’s growing?

Our population has continued to grow along the Eastern Seaboard, with over 81% of the population living in Eastern States that account for just 37% of Australia’s total land area. Growth in health need is unsurprisingly located accordingly, with the bulk in the areas of fastest and largest growth.

Of the 36 health infrastructure projects expected to start by 2025, the majority are located in NSW, Victoria and Queensland. As of Q4 2022, nine of these projects have already progressed to the procurement phase, and a further five have been awarded to progress to construction.

As all of these projects progress through detailed planning to construction phases of development, our Eastern Seaboard states will see increasing demand for contractors to deliver the construction works.

Based on current projected timeframes for these projects, this contractor need will peak in 2025, however the current market for construction is already constrained by surging private demand, as well as the need for infrastructure contractors in other areas outside healthcare.

It is therefore possible, if not likely, that these projected completion timeframes for health infrastructure will slip, and potentially delay the delivery of health care for this growing demand.

What else can we do to meet health care demand?

Hospitals and acute care infrastructure form a key part of the health system in Australia, however they are not the only part that can answer growing demand. While hospitals deliver health care across the spectrum of primary to quaternary care, moving the focus to funding and delivery of greater primary care could deliver significant benefits, including reducing demand pressures on hospitals for non-acute services.

A report from the Primary Health Reform Steering Group released in 2021 identified the key role primary health reforms can and should play in addressing the health needs of Australians. Recommendations from the report identified a variety of areas for improvement, including:

• the need to unify health systems across Australia
• integration of care into multi-disciplinary care teams to deliver a continuum of health care
• development of a Voluntary Patient Registration (VPR) system to support a single point of contact and better coordinate care for patients
• significant reform of funding models to move the emphasis to preventative rather than reactionary care, and reduce funding needs in the longer term.

Particular focus has been placed recently on Medicare reforms, with increasing calls from primary care providers and allied health to investigate alternative models of care to existing models, particularly patient centred and integrated care models.

The high prevalence of chronic conditions within the population, as well as other health need pressures that are appearing in hospitals to the tune of an added $42 billion per annum, could be alleviated with much needed primary care reforms.

Increasing emphasis on primary care, and in turn moving Australia towards a stronger preventative focus, would reduce the already overburdened hospital system, improve patient outcomes and enhance the impact of delivering new hospitals by ensuring that health demand does not continue to outstrip supply before new or revitalised infrastructure can be delivered.

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