Australia’s digital health boom faces policy paralysis

A record number of applications have been submitted to the nation’s leading digital health commercialisation program, yet Australia is dragging its feet on funding and adopting digital health technologies that would ease the pressure and optimise care outcomes.

“This represents a 65% increase on the average number of applications received across the previous four ANDHealth+ cohorts, making this the most competitive round in the program’s history,” ANDHealth Chief Executive Bronwyn Le Grice said. “The unprecedented level of interest in this intake reflects growing concern among digital and connected health founders about access to capital in the sector.”

The Medical Technology Association of Australia’s (MTAA) recently released digital health report delivers a blunt warning. Despite mounting evidence of the clinical and economic value of digital therapeutics (DTx) and remote patient monitoring (RPM), the nation still lacks a clear and equitable funding pathway. The result is clear: patients miss out, innovators lose hope, and investment flows overseas to countries moving faster.

“The more than 90 applications come from some of the most promising and innovative digital and connected health startup companies across Australia. The surge in demand highlights the critical role of non-dilutive, expert-led commercialisation support in an increasingly challenging funding environment for evidence-based digital and connected health technologies,” Le Grice said.

Digital health is now the fastest-growing sub-sector within health technology, expanding at 22% compared with just 6% for pharmaceuticals and 7% for medical devices. Yet, successive industry sentiment data collected by ANDHealth shows that access to capital remains the biggest barrier to commercialisation for Australian companies.

“As software-enabled and software-based technologies, including AI, play an increasing role in the prevention, diagnosis, management and monitoring of health conditions, alongside its increasing role in supporting accessible, affordable and effective health services, Australia needs to ensure that it has adequate capital to support its home-grown innovations,” Le Grice commented.

The companies that have completed the ANDHealth+ program to date have achieved noteworthy outcomes, impacting more than 3.4 million patients, attracting $195 million in follow-on funding, generating $82 million in revenue, undertaking 42 international market launches, and creating over 510 high-value jobs.

“Digital and connected health companies face commercialisation and go to market hurdles that are distinctly different to those faced by traditional biopharmaceutical and medical device companies. It is critical these companies receive tailored advice from national and international industry experts with direct experience in commercialising these types of technologies,” Le Grice explained.

The up to 5 successful ANDHealth+ applicants will receive tailored project support, access to ANDHealth’s global network of experts, and the opportunity to secure up to $5 million in milestone-based, non-dilutive funding over the two-year, two-stage program.

The stakes are high. A recent Productivity Commission report found that integrating digital technology into healthcare could save $5.4 billion a year by cutting hospital stays and another $355 million by avoiding duplicated tests. Around 30% of healthcare tasks could be automated through digital tools and artificial intelligence (AI), a game-changer for an overworked, burnt-out workforce.

Yet these savings remain largely theoretical. While other nations have frameworks to fund and scale virtual care, Australia treats digital health as an experiment. Companies are trapped in endless pilot programs with no path to sustainable funding.

Without funding certainty, digital health companies are relocating to other markets, venture capital is drying up, and skilled talent is being lured overseas. The MTAA report warns that “brain drain” is no longer a risk, it is a reality. As companies chase international markets with regulatory processes and clear reimbursement pathways, Australia’s digital health ecosystem shrinks, taking valuable R&D and clinical expertise with it.

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