Frost & Sullivan: Australian Healthcare Reforms Inject Life to Medical Devices Market
SINGAPORE, July 27 /PRNewswire/ –The consequences as a result of the major Australian healthcare reform plan will impact the outlook of the medical devices industry, and possibly precipitate a series of rapid changes for the market.
The Australian federal government delivered one of the biggest reforms to the healthcare system through the National Health Reform Plan. In November 2008, the federal government signed a USD 53billion agreement for health and hospitals funding over the next five years, which delivered a 50 per cent increase on the previous Australian Health Care Agreements.
Sourabh Kankhar, Consultant, Frost & Sullivan has forecast that the Australian medical devices market, which was worth USD 2.3billion in 2009, will grow at an estimated compound annual growth rate (CAGR) of 9 percent in the period 2009-2012.
In 2009, an estimated USD 98 billion (around 9.1 percent of GDP) was spent on healthcare goods and services in Australia. The country has seen a steady increase in government funding for healthcare to address the rise in demand for better healthcare services due to factors such as the ageing population and increasing incidences of chronic diseases.
“Australia’s robust healthcare system and the federal government’s radical healthcare reform plan will provide numerous growth opportunities for medical device companies. The market is expected to perform better in the next two years and achieve an estimated USD 3.0billion in revenue by 2012,” says Kankhar.
Through this reform plan, Australia has committed to invest in areas such as primary and sub-acute care to reduce preventable admissions to hospitals; to raise preventative health awareness; to improve healthcare infrastructure; and to improve access to emergency departments. In line with the healthcare policy reform, some USD 530million of the overall budget has also been dedicated towards purchase of medical equipment, machines, hiring of more doctors, increasing beds, provide training, etc which will reduce the waiting periods for elective surgery over duration of 4 years. This move is expected to provide capacity to accommodate 40,000 additional elective surgery procedures annually.
In a complex healthcare environment such as Australia, there are other factors that drive the growth of the medical devices market. Factors such as rising healthcare costs, ageing population, high prevalence of chronic diseases, increasing demand for personalized care and advances in technology are all part of the whole picture and each plays a substantial part in affecting the medical devices market.
The demand for better healthcare services is also being driven by the ageing population in Australia. The proportion of the population aged 65 years and over is projected to rise from around 12 per cent at present to 18 per cent by the year 2021, to 25 percent by the year 2051.
In 40 years from now, healthcare expenditure for patients over 65 is estimated to be seven times higher than the present level and the Commonwealth’s health spending is estimated to increase by more than AUD 200 billion by 2050.
Expansion of the medical device export market has also become quite significant in driving growth of the medical industry. The Australian medical devices industry is extremely trade-oriented with over 90 percent of domestic demand for medical devices being satisfied through imports and export of over 90 percent of products manufactured in Australia. Many local companies such as Cochlear and ResMed are satisfying the growing demand of medical devices in the global market with their niche products and focus on innovation.
Promoting the development of biotechnology and nanotechnology leading to the creation of novel materials and devices for medical and diagnostic needs is another crucial step for Australia. The medical devices industry is characterized by high levels of R&D expenditure and strong collaborations with the health and medical systems, universities and health researchers in hospitals.
“Escalating healthcare costs , biggest healthcare reforms since Medicare, increasing exports and advancement in technology are ingredients necessary to induce a sustainable growth and provide future growth opportunities for cardiovascular devices; surgical equipment and devices; point-of-care diagnostics; and homecare and non-hospital devices,” Kankhar explained.
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