Australia’s push to modernise its healthcare system is facing a serious challenge. While countries like Canada and Malaysia are using artificial intelligence to significantly increase patient support, Australia is held back by an outdated funding model and a disjointed system. The Business Council of Australia has warned that technologies such as AI could greatly improve the delivery of care, but current structures make it hard to introduce innovation, particularly with scalable mental health solutions.
At present, Australia's health sector is burdened by increasing levels of chronic illness and an over-reliance on expensive, reactive treatment. Instead of investing in preventive and digital-first care, the system is focused on acute interventions. Other countries show what can be achieved. In Malaysia, for example, AI tools help individual counsellors support up to 200 patients at once compared to Australia's usual one-on-one format.
This difference reflects a wider technology gap. Industry groups argue that Australia's healthcare framework does not support digital care because funding remains tied to current provider-based incentives. These isolated funding priorities leave no room for virtual counsellors or AI-enabled navigators, as there is no specific budget for tech-based or preventive services.
This mismatch appears to be part of a broader systemic failure with real consequences. Experts say there is a “missing middle” group of patients who do not qualify for crisis care but are beyond general wellness. Without AI tools to detect early signs, these people often do not receive help until their symptoms become severe. The result is added pressure on already overstretched hospitals and care providers.
Calls for reform are growing. The Business Council has suggested that governments make data sharing more accessible with voluntary opt-in models and shift funding to focus on preventive, consumer-focused approaches. Advocates believe the public is ready to support these changes, yet unless health funding moves beyond its reactive focus, AI innovation will continue to lag and patients will face the consequences.
