Australia's healthcare industry has a bright future
PKF's latest annual Business & Population Monitor shows Australia's ageing population, healthcare advancements and an increase in life expectancies will contribute to a rapid rise in the demand for health services.
Sydney, Australia: With an ageing population, rising incomes, and the increasing ability to treat chronic conditions out of hospital, the Australian healthcare sector is set to grow. This is one of the key findings to emerge from PKF Chartered Accountants & Business Advisers' third annual Business & Population Monitor special report entitled Health and wellness – opportunities and challenges, which looks at the impact of Australian demographic changes on the healthcare sector.
PKF's National Director, Enterprise Advisers, Matthew Field, said with this growth comes a twin challenge on how governments, businesses and families will cope: "Population ageing and health cost inflation will lead to a major shift in the spending habits of Australians and will present a myriad of business opportunities."
According to PKF's Health and wellness – opportunities and challenges report, in 2009 the healthcare sector became the largest employer in Australia, officially employing around 750,000 people, or nearly seven per cent of Australia's workforce; however, this figure does not include numerous vital smaller sectors, such as alternative therapies and fitness and health providers, which add up to at least another 200,000 people.
"When we look at the healthcare sector, it is clear demand is driven by 'desperation' rather than 'disposable income'. This coupled with Australia's ageing population and an increase in life expectancy implies the health sector can expect substantial growth in the coming decades. The already large industry has the added advantage of being less cyclical than most, which will create an abundance of opportunity for businesses in the years ahead," said Mr Field.
However, there will be challenges – with the demand for health services set to rise rapidly, the ability of Federal and State governments to finance this expansion will be constrained.
In addition, skills shortages will be inevitable. "The skills shortage in some areas of the health sector are already being felt, particularly with immigration levels falling and given that Australia's nursing workforce is ageing," said Mr Field.
PKF's Health and wellness – opportunities and challenges predicts in the next 25 years the number of people in Australia over the age of 85 will rise from the current 400,000 to well over one million, and Australia's ageing population will mean many more people of advanced age will be suffering from a range of chronic conditions.
"This is a positive outlook for businesses selling into these markets and with Australians generating more wealth they will have greater access to more complicated technologies as they emerge," said Mr Field.
Costs for diabetes are projected to have the largest percentage increase in market size, followed by dementia, Parkinson's disease, digestive disorders and sense disorders. The projected spend on diabetes ranks it highest with the expected increase in obesity being a major factor.
Regarding ageing and aged care, PKF's Health and wellness – opportunities and challenges suggests aged care and residential care services will experience the highest growth (including aged care for elderly Australians in their own homes), followed by pharmaceutical wholesaling and retailing and then medical and other healthcare services.
Healthcare providers, including small and medium sized enterprises (SMEs) who are currently underrepresented in the sector, stand to benefit from increases in demand for service delivery, allowing them to distinguish themselves from bigger competitors – particularly in regional areas where SMEs have the opportunity to expand and grow.
In housing investment is below its long-term average. This indicates that while new houses are being built, little is being spent on renovating existing homes. Business investment has also fallen away significantly after experiencing very high growth rates over the last five years due to the mining booms in the Pilbara and Kalgoorlie regions.
PKF is a chartered accounting and business advisory firm, with 11 offices located in metropolitan cities and major regional centres in Australia. PKF Australia forms part of the worldwide accounting network of PKF International, which has some 400 offices in 125 countries worldwide.
PKF offers a full range of accounting, business advisory and consulting services to clients across a wide range of industries and business growth phases. PKF services include Audit & Assurance, Business Risk Solutions, Corporate Recovery, Corporate Advisory, Enterprise Advisers, Financial Planning, Management Consulting, Organisation Development, Professional Practices Network, Superannuation Consulting, Taxation Consulting, Corporate Secretarial, Litigation Support, Outsourcing and Succession Planning.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.