The Cost of Living (Well): Examining the hidden costs of healthcare in Australia
“You don’t realise when you get sick, the financial implications….”
Medicare – Australia’s universal healthcare system – was designed to ensure all Australians could access healthcare regardless of their wealth. But new research shows soaring out-of-pocket costs are leaving many patients and families struggling to afford essential medical care.
A groundbreaking new study led by Associate Professor Katherine Kenny from the University of Sydney is shining a light on the social and emotional toll of these costs, which are impacting relationships between doctors and patients and widening the gap between those who can afford care and those who cannot.
Uncovering the costs of care
Australia’s out-of-pocket healthcare costs now exceed AUD$33 billion per year and constitute a higher percentage of overall healthcare spending than in the UK, Canada and even the United States. These costs—ranging from gap fees for non-bulk-billing GPs and specialists to prescription medicine costs —are reshaping the healthcare landscape, often at the expense of those who need care the most.
As a result of declining bulk-billing rates and other gaps in public coverage, nearly one million Australians forgo necessary medical treatment each year, and one in three fear they would not be able to afford care if they became seriously ill.
Associate Professor Kenny’s study, The Cost of Living (Well): A Sociological Study of Cost, Illness and Care, will explore the real-life impact of these financial burdens by gathering insights from patients, families, and healthcare providers.
The research, funded by the Australian Research Council and carried out with coinvestigators Associate Professor Sophie Lewis and Professor Alex Broom in partnership with Carers NSW, will examine not just the monetary costs but also the social, emotional, and relational consequences of high out-of-pocket healthcare costs.
“For many Australians, these costs mean making impossible choices,” said Associate Professor Kenny.
“Between paying for medication and covering rent, between pursuing treatment and maintaining their quality of life. Our study is about understanding these struggles and finding ways to mitigate the harms they cause.”
Australia prides itself on having a world-class healthcare system, but growing out-of-pocket costs are making access increasingly unequal.
Associate Professor Katherine Kenny
“Australia prides itself on having a world-class healthcare system, but growing out-of-pocket costs are making access increasingly unequal.”Associate Professor Katherine Kenny
Beyond the financial toll
“Talking to patients about the costs…[can be] worse than telling them they are going to die…”
High healthcare costs don’t just affect the individual patient. They create ripple effects that extend to families, carers, and even healthcare professionals. The study will explore how these financial pressures shape patient-clinician conversations, decision-making, long-term health outcomes and health equity.
“Doctors and nurses tell us that discussing costs with patients is one of the hardest parts of their job,” Associate Professor Kenny explained.
“Some clinicians say it’s worse than delivering a terminal diagnosis. The emotional weight of financial conversations in medicine is immense, and yet, we don’t talk about it nearly enough.”
By taking a person-centred approach and using innovative photographic methods, the study will uncover the hidden stories of cost and care in Australia.
Informing policy, supporting patients
The research will produce concrete outcomes and practical solutions, including clinicial training programs, discussion guides for patients and families, and public outreach initiatives through platforms such as Healthtalk Australia.
The findings will also contribute to broader policy discussions aimed at addressing the cost of healthcare, which is shaping up to be a key issue in the upcoming election.
“Australia prides itself on having a world-class healthcare system, but growing out-of-pocket costs are making access increasingly unequal,” said Associate Professor Kenny.
“This study will provide the evidence base needed to advocate for fairer, more sustainable healthcare policies that don’t leave patients and families struggling to ‘live well’ while managing illness.”
As part of the Sydney Centre for Healthy Societies and the Faculty of Arts and Social Sciences, the research team hopes this work will challenge existing assumptions about healthcare affordability and spark urgent discussions about how we value health and care in Australia.
