Australians aged 85 and over are expected to triple by 2065. Is the healthcare system prepared?
Australians will live longer but bear more chronic health conditions. As the population ages, demand for more complex health services will grow, compounded by climate-related health risks.
These were the findings of the 2026 Intergenerational Report, released on Monday, the most recent five-yearly exercise.
While Australia’s old-age dependency ratio remains low by international standards, the population aged 85 and over is projected to reach 1.9 million by 2065-66, up from 625,000 today, with most of the growth occurring over the next 10 to 15 years.
“As Australia’s population ages, and chronic conditions become more prevalent, a greater focus on preventative care will be needed,” the report read.
Currently, 61% of Australians have a chronic health condition – estimated to account for $100 billion in annual disease-related spending.
Reducing modifiable risk factors, including smoking, excessive alcohol use, and obesity, alongside early disease detection, was therefore essential, the report read.
Dr Anthony Marinucci, chair of the RACGP’s specific interest group in aged care, told The Medical Republic that rethinking current care delivery models was necessary.
“The biggest barriers are fragmented systems,” he said.
Australians living longer was certainly something to celebrate, Dr Marinucci told TMR, but independence, dignity and living well required prevention.
“Where does that next dollar generate the most health value and keep people well for the longest?”
Government spending on general practice rose to $13.4 billion in the last financial year, up from $12.7 billion in 2023-24.
But the report projected public hospitals would become the fastest-growing sector of the government’s health spending, comprising 2.5% of the country’s GDP by 2065-66, compared to medical benefits at just over 1.5%.
“Hospitals are tertiary care centres; they are often a response to an acute event. Of course we need tertiary care spending,” Dr Marinucci said.
However, he said upstream, preventive care in general practice and the primary care workforce were the “better investment”.
“We need to prevent avoidable deteriorations and hospitalisations, especially for older Australians, before they become a crisis.”
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By 2065-66, the median age was projected to be 43.5 years in capital cities and 50.9 outside them, with the report warning that the widening gap between capital cities and regional areas will place a greater burden on already under-resourced regions.
Capital cities were also expected to grow more than twice as fast as the rest of Australia, according to the report.
Climate change – including extreme heat, severe weather, and poor air quality – will only amplify health-related risks among older populations, potentially increasing illness and death, the report said.
Dr Marinucci told TMR making regional work more financially and professionally attractive and recruiting more multidisciplinary teams was key, especially given that rural areas already operate with a smaller workforce.
“This old school concept of a single GP carrying the entire load of a community, it’s not reasonable, and it’s not sustainable too. That’s the issue,” he said.
The health care and social assistance industry currently accounts for about 16% of the workforce and is projected to grow at twice the rate of all other industries over the next 10 years, according to the report.
Employment in allied health services was expected to be the fastest-growing sector, with an increase of almost 30% over the next ten years.
Associate Professor Sarah Chalmers, president of the Rural Doctors Association Australia (RDAA), told TMR there was an “enormous health underspend” and a “growing threat of further inequity for rural and remote communities”.
A report commissioned by the National Rural Health Alliance found an $8.25 billion shortfall in rural health spending for 2023-24 compared to urban areas, with an average of $1090.47 less spent per person. This gap had grown by $1.6 billion since 2020-21.
“Rural and remote communities are not just places that cost a lot of money and are inconvenient,” she said.
While there were high initial costs of employing a rural allied health professional, doctor, or nurse, Professor Chalmers said a highly effective primary care service could prevent unnecessary tertiary hospital admissions.
According to Productivity Commission estimates cited in the report, better integration of digital health technology, including AI, could deliver more than $5 billion in annual savings and automate up to 30% of healthcare tasks, freeing time for direct patient care.
“International research also suggests that AI technology has significant potential to address workforce pressures in health care and aged care through health monitoring, disease management, and risk prevention,” the report read.
“Most clinicians spend a large portion of their time on non-patient-facing administrative work. Hopefully [AI] tools allow us to spend more time in clinical interaction,” Dr Marinucci said.
Automation could prevent duplication of health records, he said, but it wouldn’t alone fix poor interoperability.
Digital technologies and AI software modelled for major metropolitan centres would also have to be adapted to rural and remote services that did not have the same backup services, Professor Chalmers said.
“I see AI similarly to how I see telehealth. It’s an adjunct. You can’t replace face-to-face telehealth services … it’s a really important part of healthcare,” she told TMR.
“Making sure that as we roll out new technologies that we do the necessary planning in the more difficult and less resourced contexts … [so that] things actually are actually designed for the context that we’re putting them into.”
Each report since 2002 has addressed a similar challenge associated with Australia’s ageing population, namely the pressures on the delivery of healthcare services to older Australians and on the distribution of funding.
Read the full report here.
