Reducing out-of-pocket costs for Australian healthcare consumers

The rising cost of healthcare: what it means for consumers

The cost-of-living crisis is placing immense financial strain on Australians, and healthcare expenses are no exception. Our latest report explores the sharp rise in out-of-pocket medical costs and the challenges consumers face in accessing affordable care. Without meaningful reform, Australians could find themselves paying a staggering $1.6 billion in out-of-pocket expenses by 2030.

The cost-of-living crisis is hitting consumers hard, especially when managing their healthcare

Australian households are under increasing financial pressure, with inflation driving up the cost of essential goods and services—including healthcare. Out-of-pocket healthcare costs now exceed $8 billion annually, making it harder for consumers to access the care they need. One in five Australians is delaying or avoiding medical treatment due to cost concerns, highlighting the growing affordability challenge. Without action, rising costs will continue to limit access to essential healthcare, particularly for low- and middle-income households.

Without change, consumers could find themselves paying $1.6B in out-of-pocket costs by 2030

Our latest report, in partnership with Private Healthcare Australia (PHA), reveals that without reform, Australians could be paying an additional $1.6 billion in out-of-pocket healthcare costs each year by 2030. This would push total consumer healthcare contributions to nearly $10 billion annually, adding further strain to household budgets. The impact is particularly severe for those requiring specialist care, with out-of-pocket costs for procedures such as cataract surgery and knee replacements exceeding $2,000 per patient in some cases.

Out-of-pocket cost growth is driven by a lack of competition, price transparency and consumer protections as well as inflation

A range of systemic issues is driving the rise in healthcare costs:

• Limited competition among providers is keeping prices high, with patients in Australia paying up to 50% more for procedures compared to other OECD countries.
• A lack of price transparency makes it difficult for consumers to compare costs, leading to unexpected bills and financial stress.
• Weak consumer protections expose Australians to excessive fees, particularly in specialist care, where pricing varies significantly.
• Inflationary pressures have worsened the situation, with medical services inflation outpacing overall inflation in recent years.

Without meaningful reform, private healthcare will become increasingly unaffordable for many Australians. Addressing these challenges through greater competition, improved transparency, and stronger consumer protections is critical to ensuring affordable and accessible healthcare for all.

Read the full report here.