Health system overview

Every day, millions of Australians come into contact with the health system. It may be through health promotion and disease prevention programs such as school-based vaccinations; an appointment with a general practitioner (GP); a visit to the pharmacist to pick up a prescription; or a more complex interaction, such as being admitted to hospital for surgery. A key role of the health system is to respond to these individual needs by providing safe, effective, accessible and appropriate treatment and other services.

Australia’s health system is a complex mix of service providers and other health professionals across a range of organisations. These include Australian and state and territory government and private sector service providers. Collectively, the health system works to meet the physical and mental health care needs of Australians.

The complex structure of Australia’s health system is reflected in its funding arrangements. The health system is funded by Australian and state and territory governments as well as non-government funders such as private health insurers and individuals.

In 2023–24, Australia’s health systems represented 10.1% of Gross Domestic Product which was above the OECD average but similar to comparable countries such as Canada, New Zealand, UK and France. For information on how much is spent on health goods and services, the sources of health funding and trends in the distribution of health spending, see Health expenditure.

The health system is not the only system that influences health outcomes. In Australia, health is shaped by many other factors, including social and economic factors such as education, housing, employment, income and social support, as well as environmental factors (both natural and built). For more information, see Social determinants of health, Environment & health and What are determinants of health?

Who is responsible for the health system?

The Australian and state and territory governments share responsibility for funding, operating, managing and regulating the health system. Private for-profit and not-for-profit organisations also operate health services, including public and private hospitals, GP practices, medical practices, specialist clinics, pharmacies and dental clinics. Separately, private organisations offer private health insurance products—financial products that help people manage some health care costs (Department of Health, Disability and Ageing 2026).

Health services are delivered by a range of health professionals working in a variety of settings, from large hospitals (in capital cities and regional centres) to small health clinics (such as those in remote areas). Australia’s health workforce includes GPs, surgeons and other medical specialists, nurses and midwives, dentists, allied health professionals including Aboriginal and Torres Strait Islander health practitioners, paramedics, administrative and other support staff. For more information, see Health workforce.

A variety of organisations support health services. Government health departments and other agencies are responsible for policy and service planning. Government departments, and research and statistical organisations collect and publish information on Australians’ health status and health conditions, use of health services and the performance of the health system. Universities and health services train health professionals. Consumer and advocacy groups have a role in public debates on policies and regulation. Voluntary and community organisations also provide support directly to individuals, as well as fundraising for research and awareness raising through health advocacy programs.

Australia also has 31 Primary Health Networks (PHNs), which are independent organisations funded by the Australian government to coordinate primary health care in their region. PHNs assess local health care needs and commission services to address gaps and improve access and equity. They also with general practitioners (GPs), other primary care providers, secondary care providers and hospitals to improve service planning, coordination and integration of care (Department of Health, Disability and Ageing 2025b).

Role of government

The Health Ministers Meeting (HMM) works to progress health issues of national importance which require cross-border collaboration. It is made up of the health ministers of each state and territory government, along with the Australian Government Minister for Health, Disability and Ageing (Department of Health, Disability and Ageing 2023a).

The main roles of each level of government in Australia’s health system are:

The Australian Government:

• develops national health policy
• funds medical services through Medicare and medicines through the Pharmaceutical Benefits Scheme (PBS)
• provides funds to states and territories for public hospital services
• funds population-specific services, including community-controlled Aboriginal and Torres Strait Islander primary health care, health services for veterans, and residential aged care
• funds health and medical research
• regulates medicines and medical devices
• supports access to, and regulates, private health insurance.

State and territory governments:

• fund and manage public hospitals
• regulate and license private hospitals and other health premises
• regulate products with health impacts such as alcohol and tobacco
• deliver community-based and preventive services (for example, cancer screening and immunisation), ambulance services, and address complaints.

Local governments in some jurisdictions can be involved in:

• delivery of community and home-based health and support services
• environmental health services (for example, waste disposal, water fluoridation)
• public health activities.

Additionally, all levels of government have shared responsibilities, including education and training of health professionals, regulation of the health workforce, food standards and safety, improving the safety and quality of health care and funding of programs and services (Biggs and Cook 2018; Department of Health, Disability and Ageing, 2026; Duckett and Willcox 2015).

What services are available?

Many services are required to meet the health needs of Australians and deliver a high-quality health system. These include:

• Health promotion and health protection and disease prevention programs, which focus on improving health and preventing the root causes of ill health. This includes immunisation and vaccination, healthy lifestyle initiatives and cancer screening.
• Primary care is often a person’s first point of contact with the health system. It includes general practice, allied health and other primary care services, such as community pharmacies and community health services.
• Specialist care, which provides services for those with specific or complex conditions or issues. This includes mental health services, cancer treatment, alcohol and other drug treatment services, palliative care and clinical assessment for surgery. Specialist care also includes pathology, imaging and other diagnostic services and referred medical specialist services, where the patient’s presentation to the specialist is recommended by another medical practitioner.
• Hospitals, where health services are provided to admitted and non-admitted patients (including outpatient clinics and Emergency Department care).

Most Australians have exposure to preventive health measures across their life, from educational campaigns to free vaccines. Australians can utilise health services as needed, dependent on their health needs and personal circumstances.

Medicare

Medicare is Australia’s universal health insurance scheme. Medicare subsidises some or all of the costs of various medical services, including services delivered in public and private hospitals. It ensures all Australians have equitable access to health care when they need it, regardless of where they live or their ability to pay (About Medicare | Australian Government Department of Health, Disability and Ageing)

Another important part of Medicare is the Pharmaceutical Benefits Scheme (PBS). As part of the National Medicines Policy, the PBS is an Australian Government program that provides Australians with reliable, timely and affordable access to a wide range of medicines. The PBS is available to all Australian residents who hold a current Medicare card.

Medicines can contribute to the quality of life of Australians by curing or relieving the symptoms of illness. They can also prevent complications in existing health conditions or delay the onset of disease. Under the PBS, the government subsidises the cost of medicine for most medical conditions. While most of the listed medicines are dispensed by pharmacists and used by patients at home, some medicines are dangerous to administer and need medical supervision (such as chemotherapy drugs) – these are only accessible at specialised medical services, usually hospitals (Pharmaceutical Benefits Scheme (PBS) | About the PBS).

Medicare, including the PBS, is currently available to Australian and New Zealand citizens, permanent residents in Australia, and people from countries with Reciprocal Health Care Agreements with Australia (Department of Health, Disability and Ageing, 2026a). People outside these categories have to pay full fees for health services or take out private health insurance (Private Health Insurance Ombudsman n.d.).

For more information, see Medicines in the health system, Referred medical specialist attendances, Pathology, imaging and other diagnostic services and General practice, allied health and other primary care services and What Medicare covers | Australian Government Department of Health, Disability and Ageing.

Private health insurance

Some medical and allied health services are not subsidised through Medicare. For example, Medicare does not usually cover costs for ambulance services, most dental services and optical aids (such as glasses and contact lenses).

For these services, private health insurance is one option for managing health care costs (Department of Health 2021a). Private health insurance can also give people with cover the option to avoid waiting lists in the public system and the ability to choose their own doctor (Biggs and Cook 2018).

The Australian Government offers a means-tested rebate to people who hold private health insurance and imposes the Medicare Levy Surcharge on higher-income earners who do not have an appropriate level of private patient hospital cover (ATO 2023).

Hospitals

Hospitals are an important part of the health system, providing a range of services to many people in need. These services include admitted patient and non-admitted patient care, and emergency care for patients who require urgent attention. Australians admitted to public hospitals should have access to fee-free treatment as public patients (Department of Health, Disability and Ageing 2023b). Public hospitals are largely owned and managed by state and territory governments. The Australian Government contributes to state and territory public hospital funding through the National Health Reform Agreement (Department of Health, Disability and Ageing, 2026b). 

Private hospitals are owned and run by the private sector, including both for-profit companies and not-for-profit organisations. Private hospitals charge for their services and receive income from:

• private health insurers
• patients (who pay out-of-pocket expenses not covered by their health insurance policy, and any excess payments based on their policy)
• the Australian Government (through private health insurance rebates, the Department of Veteran’s Affairs and Medicare Benefits Schedule claims)
• state and territory governments when they contract private hospitals to deliver public hospital services (Department of Health, Disability and Ageing 2024).

For more information, see Hospitals.

Health system challenges

Australia’s health system faces complex challenges that can affect patient experiences, service delivery and quality of care. The COVID-19 pandemic highlighted how Australians used health services, including a significant expansion of telehealth. MBS telehealth items have existed since 2002, and were expanded during the pandemic, with most temporary items now made permanent alongside face‑to‑face care. Telehealth has also grown outside the MBS, with some private services providing consultations and other services (such as prescriptions and medical certificates), meaning MBS-based measures may underestimate total telehealth activity. This can improve convenience and access for patients, but may affect continuity of care where information is not shared between providers (MBS Review Advisory Committee: Telehealth Post-Implementation Review Draft Report).

The pandemic also affected hospitals. Hospitals experienced periods of high demand, particularly during waves of COVID‑19 infections. At the same time, some non‑urgent services were paused or deferred to manage capacity and reduce the risk of infection. These pressures highlighted ongoing challenges for hospitals in balancing demand, workforce capacity and quality of care.

Examples of some of the health system challenges in Australia include:

• Digital health technologies: Australia’s health sector has a long history of using innovative technologies to improve health care delivery, empower health care users and providers to better manage health outcomes, and strengthen data systems. However, not all health providers and consumers have the same access to and experience with digital technologies. For more information, see Digital health.
• Gaps in comprehensive and quality information in crucial areas of the health system: These gaps limit evidence-based population health monitoring, planning, service delivery and policy development. For example, nationally consistent primary health care data is a known information gap. While the primary health care sector is rich in clinical data and information to support individual patient care, availability of data for national population research to inform policy, planning and system management, is limited. There are also gaps in nationally consistent information on some privately funded care, including parts of private hospital activity and private virtual care delivered outside Medicare. For more information, see Australia’s health 2024: data insights article Australia’s health data landscape.
• Ageing population: As life expectancy and the number of older people in Australia continues to grow, understanding the diversity within older population groups and catering to changes in health care needs and the demand for health care is becoming even more important. For more information, see Health of older people.
• Chronic conditions: Chronic conditions are a leading cause of poor health, disability and premature death in Australia and continue to place a large demand on both the primary care and hospital system. As the proportion of people living with 2 or more chronic conditions continues to rise, so does the need for services from multiple providers, across multiple systems such as aged care, disability, education and social services. For more information see, Australia’s health 2024: data insights article The ongoing challenge of chronic conditions in Australia.

For more information, see COVID-19, Social determinants of health, What are determinants of health? and Australia’s health 2024: data insights article Enhancing communicable disease monitoring in Australia through data linkage.

Where do I go for more information?

For more information on the health system, see:

• Department of Health, Disability and Ageing The Australian health system
• Department of Health, Disability and Ageing About the National Health Reform Agreement