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Record $1.6B digital health funding across ANZ, with no signs of slowing down

by Jack Le Guay •
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Analysis of 2022-23 budgets shows the health sector, and associated digital and ICT funding, is growing at an unprecedented rate. 

More than $1.6bn in new initiative funding has been announced for digital health initiatives in the 2022-23 year and across the forward estimates in ANZ jurisdictions, double that of the previous year. New initiative funding is in addition to funding agencies receive in general budgetary appropriations.

This may be unsurprising, given that the world continues to live through the effects of the pandemic. However, COVID is just one factor of many putting pressure on the health system. A surge in health spending has long been anticipated by governments grappling with the challenges of ageing populations, inefficient systems, labour shortages and the rise of chronic (lifestyle) diseases.

Digital health has been receiving increasing attention by governments in recent years as a salve to the issues facing the sector. National coordination in Australia under the Australian Digital Health Agency (ADHA), which is in the final year of its first five-year strategy, has been vital in aiding governments to develop digital transformation plans. 

Digital health agencies such as the ADHA and state-based counterparts have emerged as powerful entrepreneurs for whole-of-system digital transformation seeking to corral together what can often be a fragmented and localised sector to undertake often complex and expensive foundational projects such as electronic medical records. 

Ambulance services are also in view, with ramping crises in Victoria, NSW and South Australia receiving attention in this year’s budgets with explicit or implicit ICT components. 

Treasurers in New Zealand, Western Australia, South Australia, Queensland, Tasmania and the Northern Territory proclaimed that 2022-23 would break records for overall health funding in their respective jurisdictions. While NSW and Victoria announced record rural and regional health packages. 

Health represents the highest percentage of government expenditure compared to any other function for every Australian state and territory jurisdiction. For the federal Australian and national New Zealand governments, health comes in second, ahead of defence and education, and only bested by spending on welfare and social services. 

Health as a percentage of total estimated government expenditure in 2022-23 ($M) 
 

Jurisdiction

Total estimated expenses

Health function

Percent health

South Australia 

 $23,554  

 $7,715  

33% 

Tasmania 

 $8,323  

 $2,646  

32% 

Western Australia 

 $36,836  

 $11,495  

31% 

Victoria 

 $89,844  

 $27,976  

31% 

Queensland 

 $74,915  

 $22,466  

30% 

Northern Territory 

 $7,133  

 $1,897  

27% 

New South Wales 

 $114,878  

 $30,296  

26% 

New Zealand 

 $128,444  

 $29,999  

23% 

Federal 

 $628,469  

 $105,754  

17% 

Despite the eye-watering figures, spending on health as a total figure and proportion of overall expenditure is expected to climb. The NSW government is predicting healthcare costs to grow to 38% of expenditure by 2061 based on current figures, with WA reaching the same proportion of expenditure by 2026-27 “without intervention”. 

$680.8 (AU$615.11) million in new digital health funding across the forward estimates 

New Zealand, which is in the process of tearing up its decentralised health services model, in response to many of the same drivers spurring the health bonanza across the ditch, saw an enormous investment in digital health this year. 

$545 million of the amount is contingency funding over the next four years, which means that the total cost of these initiatives may be considerably lower than this amount. 

$220 million of this amount will go towards the Health Data, Digital – Foundations and Innovation initiative which will likely include data analytics and investment in the Hira Tranche 2 health information platform. 

Other initiatives include a digital transformation program for the Southern Health System, a population health and disease management digital capability and public health data surveillance capabilities. 

$480.2 million in new digital health funding across the forward estimates 

Usually light on digital initiatives, Tasmania shelled out big time on its $475 million, 10-year Digital Health Transformation initiative. The initiative will see $150 million spent over the first four years to implement the Improving Patient Outcomes Digital Strategy 2022-2032. This includes investment in electronic medical records, interoperability, virtual care and analytics. 

The strategy highlighted an ageing population and “increasing rates of chronic disease” driving up the costs of running the health system. 

In his budget speech, Treasurer Michael Ferguson noted that health expenditure was $11.2 billion, or 33.6 per cent of the state’s total operating expenditure over the forward estimates, up from 28 per cent in 2013-14.  

$7.2 million over four years will also go towards the Outpatient Transformation Program to improve care in the home and to create a digital portal. 

$300 million in new digital health funding across the forward estimates 

Queensland’s entire $300 million digital health funding goes to one project – for the continued roll-out of the state’s integration electronic medical records (ieMR) system over five years. 

The project has already seen $332 million spent over the past six years, with a December 2018 audit revealing almost double that amount would need to be invested to see the project through to completion. 

Any further complications with the delivery of the project will likely hamper Queensland’s ability to realise greater efficiencies within the health system. Electronic medical records are a foundational component of every jurisdiction’s digital health strategies, paving the way towards better workflows, virtual and in-the-home care and advanced or predictive analytics. 

$232.8 million in new digital health funding across the forward estimates 

NSW’s biggest digital health initiative this year was the announcement of $94.5 million to support a new Ambulance Virtual Clinical Coordination Centre. This was also supported with a $15 million investment to create the NSW Ambulance Virtual Clinical Care Centre. 

$58 million was announced towards the implementation of a Digital Baby Book. The funding will support “real-time integration of health records” across hospitals. The initiative itself is an example of interjurisdictional collaboration in the digital health sector, beginning as a pilot in 2019, led by NSW and Victoria. 

The state has been at the forefront of digital health spending, facilitated through eHealth NSW. 2021-22 saw the announcement of the five-year Virtual Care Strategy and a large $141 million investment to unify electronic medical records in the budget. 

The state also announced $2.4 billion to be invested in regional health, following a damning report into rural, regional and remote health outcomes. Future digital health spending could see a greater focus on servicing non-metropolitan regions in future budgets.  

$129.1 million in new digital health funding across the forward estimates 

The Australian federal government continued its role as a national facilitator of health service coordination, pledging $96.8 million towards phase three of the Health Delivery Modernisation Program – which will automate claims processing for Medicare. $32.3 million will go towards the Intergovernmental Agreement on Digital Health to support My Health Record. 

It is unclear what approach the new Labor government will take towards the urgency of digital health funding, with a mini-budget likely from new Treasurer Jim Chalmers in the coming months. 

$101 million in new digital health funding across the forward estimates 

WA has recently seen significant investment in digital health off the back of its Sustainable Health Review and associated HealthNext cloud migration project, funded by windfall revenue from historically high iron ore prices. The state currently has $501 million worth of digital health initiatives underway, with $222 million of that amount to be spent in 2022-23. 

New funding is mostly towards a top-up of the Human Resource Management Information System for WA Health, with $18 million going towards a real-time data project. 

$98.8 million in new digital health funding across the forward estimates 

Victoria’s 2022-23 digital health investment focussed on two main areas – mental health and cyber security. 

$64.8 million will fund the creation of a “contemporary mental health information infrastructure.” This will include an electronic mental health and wellbeing record, data exchange and a portal for personalised services. 

No new digital health funding across the forward estimates 

Despite recording the highest ratio of health to total government expenditure, South Australia recorded no new explicit ICT initiatives in the sector in this year’s budget. 

The first budget of the new Malinauskas Labor government was largely focussed on fulfilling election promises, many of them in the health sector, however explicit digital initiatives did not feature. 

Ambulance ramping played a big role in the ousting of the Marshall government, and the funding of a $120 million new ambulance operations centre will likely include significant digital components. 

The mid-year update later this year and the 2023-24 budget will be ones to watch for digital health initiatives, as the new government assesses its priorities. 

Australian Capital Territory 

The 2022-23 ACT budget will be handed down on 2 August and may include some small digital health initiatives. However, given the 2021-22 budget contained $73 million towards the implementation of a digital health record, new digital health funding may be constrained in the coming budget. 

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