From Mandates to Market Share: Navigating Australia’s A$4–6B Hospital Software Upswing to 2030

Executive Summary

Australia’s hospital software market, valued at A$4.2 billion in 2024, is entering a period of accelerated transformation. National digital health mandates, multibillion-dollar public investments, and rapid technology adoption are reshaping competitive dynamics. For vendors and investors, this is a structural shift that will define market leadership through 2030.

Key Insights:

  • Public Sector Dominance: Public hospitals account for 74% of spend (A$3.1B), driven by large-scale EMR programs such as NSW Health’s A$2.2B Single Digital Patient Record initiative.
  • Interoperability as a Gatekeeper: Compliance with FHIR-based data exchange is now mandatory. Vendors without proven FHIR capability are excluded from major tenders.
  • Cybersecurity and Cloud Economics: With 72% of hospitals migrating core applications to the cloud, sovereign hosting adds 18–25% to TCO. Cyber risk costs now exceed software licensing, with breaches averaging A$10.9M.
  • AI Adoption Outpaces Governance: Hospitals are realizing ROI from AI in imaging and decision support, but governance frameworks lag, creating risk for boards.
  • Vendor Landscape in Flux: Incumbents like Oracle Health face erosion from Epic’s NSW win and local innovators such as Alcidion and Telstra Health.

The market is projected to grow at 9–11% CAGR, reaching A$6.8–7.9B by 2030, with AI/Analytics and SaaS solutions expanding at more than 22% CAGR.

1. Market Sizing & Spend Baseline

Current annual spend on hospital software in Australia is estimated at A$4.2 billion for 2024. Public hospitals represent 74% of total spend, reflecting large-scale EMR rollouts and complex integration needs.

  • Public Hospitals: A$3.1B (74%)
  • Private Hospitals: A$1.1B (26%)

Confidence interval: ±15%, due to limited official reporting and outdated private bed data.

2. Funding & Policy Catalysts

  • National Digital Health Strategy (2023–2028)
  • FHIR Mandate
  • Federal Funding: Over A$1.1B allocated
  • Cybersecurity Regulation

3. Category Growth Forecast 2025–2030

Market forecast: A$6.8–7.9B by 2030 (CAGR 9–11%)

  • Analytics & AI: 22% CAGR
  • SaaS Solutions: 22.1% CAGR
  • EMR/EHR: 7–9% CAGR

4. Vendor Landscape & Competitive Dynamics

  • Oracle Health: Large footprint, low satisfaction
  • Epic Systems: NSW’s A$2.2B SDPR deal
  • Local Innovators: Alcidion, Telstra Health

5. Procurement Evolution

  • Public Sector: Structured tenders
  • Private Sector: Faster cycles
  • Emerging Trends: SaaS adoption, KPI-linked pricing

6. Technology Themes

  • Interoperability: FHIR-native architecture
  • Cloud Migration: 72% adoption
  • AI & Machine Learning
  • Telehealth Integration

7. Cybersecurity & Governance

Average breach cost: A$10.9M. Compliance with ASD Essential Eight and Privacy Act is mandatory.

8. Workforce & Change Management

Change management and training account for up to 25% of TCO.

9. Strategic Recommendations

  • For Vendors: FHIR-native platforms, security bundles, modular overlays, KPI-linked models
  • For Providers: Mandate FHIR, allocate 25–30% for change management, prioritize cybersecurity
  • For Investors: Track public sector wins, monitor local innovators, scrutinize R&D

Market Outlook: Australia’s hospital software market is positioned for sustained growth, driven by structural reforms and technology adoption.