Investing in Australia’s Healthcare Future

Australia’s healthcare sector stands as one of the most substantial and dynamic parts of our economy, both in terms of societal impact and its role in shaping future demand.

A Major Economic Pillar

In 2022–23, Australia spent approximately A$252.5 billion on health goods and services, about A$9,597 per person, accounting for 9.9% of GDP ^1.
Even though this proportion dipped slightly from the pandemic peak, the scale and centrality of healthcare to our economy remain significant ².

A Massive Workforce

Healthcare is not just big in dollars, it is big in people too. As of July 2025, the Healthcare & Social Assistance sector employed 1.31 million Australians, representing 15.9% of the labour force ³. That makes it the largest employment sector in the country.

Private Coverage and Service Demand

Private health insurance continues to play a critical role. As of September 2023, 55.1% of Australians held some form of private health insurance, with 45.2% having hospital coverage and 55.0% general treatment (extras) cover ⁴.
This demand highlights the importance of allied health and preventative care services, particularly as Australians seek options to complement the public system.

Structural Tailwinds and Shifting Demand

Several long-term trends are shaping the sector:

• An ageing population, which increases demand for aged care, chronic disease management, and rehabilitation services ⁵.
• Post-pandemic shifts, such as sustained higher uptake of mental health services and vaccination programs.
• Innovation in healthcare delivery, with technology improving diagnostics, patient management, and access to community-based care.

Healthcare Through a Private Equity Lens

These dynamics illustrate why healthcare continues to attract attention from private capital:

• Resilience with potential for expansion
  The sector is underpinned by ongoing demand and is often viewed as more resilient during economic slowdowns, while still presenting areas of longer-term growth.
• Diverse areas of focus
  Beyond private hospitals, sub-sectors such as allied health including therapy services, occupational rehabilitation, mental health platforms, and vaccination services are receiving increasing interest.
• Innovation and scalability
  Technology-enabled care models and digital health platforms are helping providers meet patient demand more efficiently, with the potential to achieve scale over time.

In Summary

Healthcare is not only a social necessity but also a sector where demographic, technological, and policy trends are driving change. With nearly 10% of GDP directed towards it, a large share of the workforce engaged, and evolving models of care, healthcare is expected to remain an important focus for private investors monitoring structural themes in the Australian market.

References

[1] Australian Institute of Health and Welfare (AIHW), Health expenditure 2022–23.
[2] AIHW, The health sector relative to the economy, 2022–23.
[3] Australian Bureau of Statistics (ABS), Workforce by industry, July 2025.
[4] Private Healthcare Australia, Industry Statistics, September 2023.
[5] Government of Australia, Ageing of Australia, demographic trends.