Australia’s ageing population is driving demand for hospital services.
Melbourne, Australia (PRWEB) January 29, 2014
General hospitals provide acute care, and are split between government-funded public hospitals and private hospitals. Public hospitals receive the majority of their funding from state governments and the Federal Government, while private hospitals primarily source their revenue from private health insurers and out-of-pocket patient costs. IBISWorld industry analyst David Whytcross states “demand for general hospitals has surged over the past five years due to Australia's ageing population and the prevalence of chronic illness among adults. Private hospitals have gained further benefits from steady increases in private health insurance coverage.” As a whole, the General Hospitals industry is forecast to grow 3.8% annualised over the five years through 2013-14 to be worth $56.4 billion.
Over the past five years, public hospitals have been boosted by increases in public funding, particularly from state governments. State government funding growth is expected to slow down through 2013-14, resulting in sluggish revenue growth of 0.4% for the year. Revenue growth for private hospitals has been driven by growth in private health insurance coverage, which is indirectly funded by the Federal Government through premium rebates. Expenditure has increased within both hospital systems primarily due to Australia's rising age profile. In 2011-12, people aged 65 and over accounted for almost 50.0% of patient days, with this proportion steadily increasing. With the higher prevalence of private health coverage in this age bracket, expenditure within both public and private hospitals has grown due to these demographic changes. Population ageing will continue over the next five years, with the baby boomer generation moving into retirement. According to Whytcross, “the Federal Government will support the increased demand from older generations through activity-based funding, increasing its contribution to industry revenue by funding efficient growth.” Efficient growth involves increases in expenditure due to volume rather than cost growth. Private hospital revenue is expected to rise due to growth in private health coverage. However, growth in coverage will be counteracted by the downgrading of coverage levels, which will limit private hospital service volumes.
With the largest general hospitals owned and operated by state governments, standard methods of determining industry concentration are not readily applicable to the General Hospitals industry. Larger public hospitals jointly funded by the Federal Government and state governments operate alongside smaller private hospitals. Hospital networks owned by New South Wales, Victoria, Queensland and Western Australia account for a significant proportion of industry revenue, resulting in high market share concentration. While concentration is high, each state health department manages hospitals of different sizes and attributes and no individual hospital accounts for a significant market share. The industry’s major players include the NSW Ministry of Health, the Victorian Department of Health, Queensland Health, the Department of Health of Western Australia and the South Australian Department for Health and Ageing. For more information, visit IBISWorld’s General Hospitals report in Australia industry page.
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IBISWorld industry Report Key Topics
General hospitals provide diagnostic, medical and surgical services and continuous inpatient nursing care. The industry also includes establishments that provide both hospital facilities and training of medical and nursing staff.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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