Understanding Future Demand for Healthcare Services

Future demand for healthcare services  looks set to rise rapidly as the nation ages. The latest Intergenerational Report released by the Treasury department projects the outlook for the economy over the next 40 years. We unpack the interplay between the ageing population and demand for medical services.

1. We are ageing rapidly as a nation.

Over the period to 2063, Australia’s population is expected to grow at a slower rate than the previous 40 years (1.1% vs 1.4% per annum). Unsurprisingly, the nation overall is expected to live longer and remain healthier into old age. Consequently, the median age is anticipated reach 43.1 years old by 2063 — compared with 38.5 years currently (i.e. an increase of +4.6 years).

2. Australia’s healthcare workforce will need to double in size over the next 25 years.

The 65+ years age cohort currently accounts for 16% of Australia’s population but 40% of the nation’s health expenditure. Based on the projected growth in 65+ year olds over the next 20 – 30 years, the care and support workforce will need to double in size to meet the demand for healthcare goods and services by 2050. 

3. The ageing population will be the key driver of Government health expenditure over the next 40 years.

The chart below illustrates the components of the Australian Government health expenditure to 2063. Clearly, as we grow older as a nation, we will utilise medical services more often.  The Intergenerational Report indicates that, “the real health spending for those over 65 years old is expected to increase six-fold, over the period to 2063, and nine-fold for those over the age of 85 years”. 

As Australia continues to age, the burden on healthcare services will intensify. This demographic shift not only underscores the pressing need for an expanded and efficient healthcare workforce but also highlights the critical need for the expansion of medical facilities to accommodate the increasing demand for healthcare goods and services. Clearly demand for medical floorspace will be an integral aspect of our nation’s healthcare infrastructure planning in the years to come. 

Please contact us if you would like to understand more about the potential for medical services and floorspace in your area.

Project Team

Krystal Anagnostou


Philippa Curtis

Associate Director

Greg Malempre


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