A healthy alternative

Natural therapies, including herbal medicines and allied health services, have taken off in Australia. The prognosis is for healthy returns for the foreseeable future. By JASON BAKER of IBISWorld.

By Jason Baker

Health services that are “not elsewhere classified” has, as an industry in Australia, experienced strong revenue growth over the past five years, and this positive trend looks set to continue.


Other health services include natural therapies and other allied health services, which have experienced rapid growth.

The sale of herbal medicines in the Western world has increased significantly over the past decade, indicating a growing consumer acceptance of these remedies.

IBISWorld estimates that this industry expanded at an average annual rate of 6.6% over the five year period to 2005-06.

With the exception of radiology, services provided by this industry are not subsidised under Medicare. Private health insurance trends are significant in influencing both demand and income for these services. This is due primarily to the tendency for households to concentrate their health care expenditure on health services that are covered under either Medicare or under their private health insurance.

Most segments of the industry have seen a significant increase in practitioner numbers.

In many other segments of this industry, there was an increase in the average size of establishments, with some businesses moving away from a “cottage” base to larger and more professionally run bases.

The federally administered appropriations for hearing services amounted to $261.2 million in for the 2005-06 year. As a result of a federal budget announcement in May 2005, an additional $10.1 million was allocated over four years to assist an estimated 10,000 additional indigenous Australians suffering from hearing loss.

IBISWorld forecasts that this industry will expand at an average annual rate of 6.2% over the five year period to 2010-11.

Demand is expected to continue to grow as the population grows and ages, and as non-traditional medicine gains greater acceptance.

The ageing of the population will be a factor that will positively affect growth in demand for many industry services. A number of allied health professions will continue to lobby the Federal Government for inclusion of their services within the Medicare system.

It is unlikely new services will be incorporated under Medicare during the outlook period.

Public hospitals, and some smaller private hospitals, will increasingly outsource “other health services” activities and this should act to boost this industry’s revenues. For allied health services, competition from traditional medical practitioners offering non-traditional treatment is expected to increase as the popularity of non-traditional medicine increases.

It is expected that there will be growth in franchised “other health” operations, where the franchiser can provide benefits in promotion and provide economies of scale in management services and buying consumables, training and insurance.

As society takes notice of alternative health services, growth is expected in several segments of this industry, and the future for the industry looks healthy indeed.

Revenue growth
IBISWorld supplies business information databases, including industry reports, company reports and business indicator reports. www.ibisworld.com.au
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