With soaring medical bills, increasing waiting times and an ageing population, how is our healthcare system coping and what will it look like in future? In Healthcare's Silver Squeeze, Insight hears from practitioners and patients caught in the healthcare cost crisis and asks, who should pay the price? Watch on .
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Healthcare's Silver Squeeze
episode • Insight • News And Current Affairs • 51m
episode • Insight • News And Current Affairs • 51m
When George Paw moved with his family from Malaysia to Australia at the age of 15, he remembers being in awe of our health system.
"It was incredible. I was able to just walk into a GP clinic and see a doctor, and then just walk out without paying a single cent," he told SBS Insight
"I thought it was a fantastic use of taxpayer money."
For George, like many Australians, this has become a different story in 2025. The software engineer has struggled to find a GP who bulk bills where he lives in Melbourne.
"With the rising costs, this is just another thing that I have to add to my bill in order to afford medical care."
George once thought the Australian healthcare system was "fantastic". Now, he worries it's heading in a "disappointing direction". Source: Supplied
Overall, George feels the health system is heading in a "disappointing direction".
"I think it's going to spiral out of control. It's $20, $30 these days. But then in 10, 20 years, what could it be?" he said.
"As the years go on, we're taking up more of the tax burden to fund Medicare as compared to our predecessors."
Rising costs
Duncan Sharpe has found the cost of treating his type 2 diabetes incredibly expensive.
He's been paying out of pocket to manage his diabetes for over 30 years, and estimated it's cost him "tens of thousands of dollars".
He worries about how he will cover increasing healthcare costs as he ages.
"I unfortunately have more ailments as I get older, as everyone does," he said. "I know that my health care in the future will be dependent on what I can afford."
Duncan estimates his diabetes has cost him "tens of thousands of dollars" over the last three decades. Source: Supplied
"Last year, I lost the sight in my right eye. I have 10 per cent eyesight in that eye, and I was out of pocket nearly $20,000 with top medical healthcare," he said.
"For me, in the future, it will be the tax break that you get, but it will be the public system that I use."
'Increasing gap between haves and have-nots'
Rachel David has been the chief executive of Private Healthcare Australia (PHA), the health insurance industry's peak representative body, since 2016. She says our mixed public and private hospital system outperforms almost every other health system in the world, but the rising costs need to be discussed.
"We have switched from acute conditions that were over pretty quickly — either you got better, or you died — to chronic conditions that are being managed over a long period of time," she said.
"The technology is getting better … and there have been some phenomenal advances in pharmaceuticals. But some of them are coming at a huge cost."
Rachel said there will be a segment of society that both want to and can pay more for their healthcare.
"They'll do everything from vitamin infusions to Ozempic to the most expensive aged care," she said.
"But what that does is it really increases the gap between the haves and the have-nots. And that inequity flows through to everything."
Longer lives and fewer carers
Australia’s population is ageing due to increasing life expectancy and declining fertility rates.
Over the past 50 years, life expectancy in Australia has increased by more than 13 years for males (to 81.1) and around 11 years for females (to 85.1), according to the Australian Institute of Health and Welfare.
At 30 June 2020, Australians over 65 represented 16 per cent of the total population. By 2066, that proportion is expected to jump to between 21 per cent and 23 per cent.
Macquarie University health economics professor Henry Cutler says the ratio of workers to elderly Australians has been dropping significantly and is projected to drop even further, which makes funding a problem.
"There will be less workers working to pay taxes that go towards funding the health care that we need, particularly for older Australians," he told Insight.
"We need to think about how we are going to fund health and aged care in the future … we can't fund it through the public purse because the demand is too great."
Henry said some possible solutions to fill the gap could include productivity improvements, immigration, or asking people to delay their retirement or pay more.
"If they don't pay more, quality may decline."
Australians are living longer. Source: SBS
"The research that I've seen suggests that an increase in private health insurance membership does little to reduce the public hospital elective surgery waitlists," he said.
"Although it removes a lot of the demand from the public system, it also removes a lot of the supply of clinicians.
"And so what happens is that people move from public to private. And therefore clinicians move from public to private. They get paid more in the private system, and so therefore they would rather work in the private system."
Rachel says she's "sceptical" of the argument around waiting lists.
"A waiting list is just a way of managing demand; it can be as long as a piece of string. So that's really not a measure I'd use," she said.
She says private health insurance takes the pressure off public hospitals.
"Two thirds of the planned or elective surgery that takes place in Australia — and these are essential procedures, this is not cosmetic surgery — takes place funded by private payers, mostly private health insurance."
The federal Department of Health says private hospitals cover more than 40 per cent of all hospital admissions and deliver more than 70 per cent of elective surgeries, with more than 15 million Australians holding private health insurance.
Are we heading towards a US-style system?
With many Australians now having to pay to see a GP, there are concerns we are moving closer towards a user-pays model like the US healthcare system adopts.
While Australia's hybrid system combines publicly funded Medicare with private health insurance options, the US system is primarily private, with the majority of Americans receiving coverage through their employers or through buying insurance privately.
The US healthcare system is the most expensive in the world, with high costs for both insurance premiums and medical services. A significant portion of the US population remains uninsured, facing financial hardship and limited access to care.
Rachel said that although we have some economic inequity in healthcare, key differences between the Australian and US healthcare systems make an American-style shift unlikely.
"In Australia, there are legal protections against us moving to a full user pays system that goes all the way to the constitution," she said.
The Australian constitution states the funding of public hospital services is shared between the federal, state and territory governments.
Rachel said that when a person needs surgery in Australia, their referral goes directly to a surgeon or public hospital without an insurer or business needing to pre-approve a claim — as happens in the US.
"A sick person doesn't pay more [than a healthy person], either through their taxes or insurance premiums, for their healthcare. We all pay more or less the same.
"And you can pretty much get treated wherever you are; there's not like a narrow network of doctors and hospitals where you have to go. If you live in Adelaide but your doctor lives in Sydney, then Medicare and private health insurance will still cover you."
George is passionate about ensuring we have an equitable health system, and has created the website HeyMp! to encourage people to find and write to their local MP about things of concern to them, such as increasing funding to Medicare.
"MPs are the ones who control the purse that funds our Medicare system," he said.
"We should be writing to them to advocate for better funding of Medicare and better healthcare."
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