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Australia’s health system is under increasing pressure to meet the needs of an ageing and evolving population. But are we planning for the right kind of care?
Governments often rely on historical health service usage — broken down by age and gender — to forecast future demand. This method assumes that a 65-year-old in 2025 will have the same health profile as a 65-year-old did in 2000 or even 1950. Yet this assumption is flawed.
Health needs change over time, shaped by, for example, shifts in diet, environment, technology, and social norms. These influences can affect people differently depending on when they were born — what we call their “birth cohort.” For example, today’s teenagers have grown up with greater access to ultra-processed foods, which may lead to very different long-term health outcomes compared to previous generations. For instance, we observe a higher risk of obesity or metabolic disorders in younger cohorts.
By ignoring these cohort effects, we risk misjudging future health care needs, either overestimating or underestimating demand in critical areas.
What our research found
To explore this issue, my colleagues and I analysed longitudinal data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey, which has tracked Australians annually since 2001. We examined self-reported health conditions across different birth cohorts, controlling for age, gender and the year respondents were interviewed.
Our findings revealed significant shifts in health profiles:
Mental health: Successive birth cohorts show a higher likelihood of probable mental disorders, especially among women. For example, the prevalence of probable mental disorders among females born between 2000–2006 is 23% today, compared to 9% in earlier cohorts.
Physical health: There’s a decline in physical health problems across cohorts for both men and women.
Overall long-term health conditions: While the decline in physical health problems offsets the increase in mental health problems among men, the sharp rise in poor mental health among women has led to higher rates of long-term health condition among females in more recently born birth cohort.
These trends suggest that traditional forecasting models — based solely on age and gender — are missing key changes in population health. For instance, mental health needs may be significantly underestimated, while physical health service demand could be overstated.
To avoid miscalculating future demand, evidence-based care guidelines should also be applied when planning for the future.
Our study, published in the European Journal of Health Economics, highlights the importance of incorporating cohort effects into health planning models to improve accuracy and relevance.
What needs to change
If we want to plan effectively for the future, we need to move beyond outdated assumptions. Health care planning must incorporate cohort-specific data to better reflect the evolving needs of Australians.
This shift has practical implications. Workforce planning, resource allocation, and infrastructure investment all depend on accurate forecasts. If we underestimate mental health needs, we risk underfunding services and leaving patients without adequate support. If we overestimate physical health problems, we may misdirect resources that could be better used elsewhere.
Governments and health services should invest in dynamic forecasting models that account for cohort effects. This means using longitudinal data, like HILDA, to track how health evolves across generations—and adjusting policy accordingly.
Dynamic forecasting refers to models that incorporate cohort-specific health trends, using longitudinal data to estimate future needs more accurately. Unlike traditional models, they adjust for generational shifts in health conditions, such as the rising prevalence of mental health disorders among younger cohorts. Our study shows that using age-only models could underestimate mental health service needs by up to 45% for women by 2035.
Ultimately, our goal should be to ensure that future Australians receive the care they actually need, not the care we assume they’ll need based on outdated models.
Dr Sabrina Lenzen is a health economist with the University of Queensland.
The statements or opinions expressed in this article reflect the views of the authors and do not necessarily represent the official policy of the AMA, the MJA or InSight+ unless so stated.
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