By Melinda McGee
Published 27 March 2026  |  TherapyInsights

Telehealth is often framed as a technological breakthrough but that’s not what’s driving its growth in 2026.

For a growing number of Australians, it’s becoming the only affordable way to see a doctor.

The Australian telehealth market reached nearly $456 million in 2024 and is projected to grow at almost 19 per cent annually through 2033. Independent surveys suggest that over 40 per cent of Australians used a telehealth service in the past year. On paper, this looks like a technology success story. In reality, much of this growth is being driven by something far less glamorous: cost-of-living pressure that is making traditional in-person care inaccessible for millions of people.

This is not an innovation story. It is a cost-of-living story, disguised as a healthcare trend.

Australia’s out-of-pocket healthcare costs now exceed $33 billion per year a higher proportion of total health spending than in the United Kingdom, Canada, or even the United States, according to research from the University of Sydney.

The 2025 Australian Healthcare Index, which surveyed more than 8,200 Australians, found that 49 per cent had delayed seeking medical care due to rising out-of-pocket costs and gap payments. Rising costs for GP visits were rated the most pressing healthcare challenge, cited by 46 per cent of respondents ahead of private health insurance costs and emergency department wait times.

Separately, a report from Mandala Partners and Private Healthcare Australia found that out-of-pocket costs surged 12 per cent in a single year, and estimated that 330,000 Australians would delay care due to affordability concerns. The University of Sydney research found that nearly one million Australians forgo necessary medical treatment each year, with one in three fearing they would not be able to afford care if they became seriously ill.

These are not abstract statistics. They describe a healthcare system in which the decision to see a doctor is increasingly governed by household budgets rather than clinical need.

Against this backdrop, telehealth is emerging not as a lifestyle upgrade but as an economic survival mechanism.

Demand is coming from two directions simultaneously. Patients are seeking virtual consultations because they eliminate or reduce the ancillary costs that make in-person care unaffordable. Providers, meanwhile, are expanding telehealth offerings to maintain patient volumes as more people defer or abandon in-person appointments.

The Australian Government’s expansion of Medicare-funded telehealth services in March 2025 including additional specialist remote consultations for chronic disease management and mental health signals official recognition that virtual care is no longer a pandemic stopgap. It is becoming a structural component of the healthcare system.

But the policy framing remains focused on access and convenience. What the data increasingly shows is that cost is the primary catalyst.

The cost of healthcare in Australia is not just the consultation fee. For many patients, it is the cost of getting to the consultation in the first place.

Consider what an in-person appointment actually costs beyond the medical fee: fuel or public transport fares, which have risen sharply in the past two years. Parking, which in many hospital and specialist precincts now exceeds $15 per hour. Time away from work, often unpaid for casual or part-time employees. Childcare arrangements, if a parent must attend an appointment during school hours. Meals and incidentals for appointments that require travel to a regional centre.

For patients in rural and regional areas, these costs compound dramatically. A single specialist appointment can involve a full day of travel and $100 or more in direct expenses before the medical fee is even considered. As we’ve reported, patients are already skipping healthcare because of fuel costs a pattern that is accelerating as the cost of living continues to rise.

Telehealth removes the cost of getting care not just the cost of care itself. That distinction explains why its growth is accelerating fastest among the populations that can least afford to travel.

The shift is playing out in households and clinics across the country. Four scenarios illustrate the pattern.

A mother in outer suburban Melbourne has a child receiving fortnightly speech therapy. Each in-person session requires a 45-minute drive, parking costs, and three hours away from her part-time job. She switches to telehealth. The therapy continues, but the hidden costs fuel, time, lost income are eliminated. The quality of intervention may differ in some respects, but the alternative was cancelling appointments altogether.

A man in western New South Wales needs a follow-up with a cardiologist based in Sydney. The round trip is six hours and costs more than $200 in fuel, food, and incidentals. He opts for a telehealth consultation. The appointment takes 20 minutes. He doesn’t miss a day of work.

An allied health practice in regional Queensland finds that cancellation rates are climbing as patients cite travel costs. The practice introduces a hybrid model alternating in-person sessions with telehealth reviews. Cancellation rates drop. Patient retention improves. Revenue stabilises.

A full-time employee in Brisbane needs to see a psychologist. Taking time off work for a midday appointment means losing income and explaining the absence to an employer. She books a lunchtime telehealth session from her car. The barrier to care is removed not by clinical innovation, but by eliminating the logistical penalty of seeking help.

Telehealth is not only reshaping patient behaviour. It is forcing providers to reconsider their service models. As the NDIS pricing model comes under increasing pressure, particularly in regional areas, providers face their own version of the affordability squeeze.

For many clinicians, telehealth reduces overhead. There is no travel time between home visits. Room utilisation becomes more efficient. Administrative costs fall when appointments are managed through integrated digital platforms. For providers adapting service models to remain financially sustainable, telehealth is increasingly part of the answer.

But the shift is not without tension. Many allied health professionals entered their fields precisely because they value hands-on, in-person care. Telehealth can feel like a compromise and for certain clinical needs, it genuinely is one.

An honest assessment of telehealth must acknowledge its limitations alongside its advantages.

Follow-up consultations, medication reviews, and routine check-ins are often as effective via video as in person. Mental health services, particularly talk-based therapies like cognitive behavioural therapy, have shown strong evidence of comparable outcomes when delivered remotely. Case coordination, care planning, and second opinions are well suited to virtual formats.

Physical examinations cannot be conducted remotely. Certain allied health interventions manual therapy, hands-on rehabilitation, paediatric assessments that rely on observation of movement require the clinician to be in the room. Patient engagement can suffer when the relationship is exclusively digital, particularly for older adults or those with low digital literacy. And connectivity remains a barrier in parts of rural and remote Australia where broadband infrastructure is unreliable.

The goal is not to replace in-person care. It is to recognise that for a growing number of Australians, the realistic alternative to telehealth is not in-person care it is no care at all.

Telehealth’s impact is most pronounced in regional, rural, and remote Australia precisely the communities where healthcare access has been eroding for years. As we’ve explored, rural Australians may soon lose access to healthcare altogether if travel costs continue to rise and local services continue to close.

For these communities, telehealth is not a premium service. It is a lifeline. The ability to consult a specialist, access a psychologist, or review a care plan without driving hundreds of kilometres is transformative.

But the promise depends on connectivity. Satellite and mobile broadband coverage in remote Australia remains patchy, and video consultations require a level of bandwidth that is not universally available. Without continued investment in digital infrastructure, telehealth risks becoming another service that works well in cities and poorly where it is needed most.

Telehealth’s growth is not happening in isolation. It is part of a broader pattern of adaptation by patients, providers, and systems in response to mounting cost pressures across Australian healthcare.

Health insurance premiums rose by an average of 4.41 per cent in 2026, on top of medical service costs that increased by 5 per cent the previous year. The 2025–26 federal budget committed $1.8 billion to public hospitals and expanded Medicare urgent care clinics, but these measures address acute-care bottlenecks rather than the underlying affordability challenge in primary and allied health.

Meanwhile, chronic disease prevalence continues to climb. Diabetes has increased 220 per cent in Australia over the past two decades. Overweight and obesity surpassed tobacco as the leading risk factor for death in 2024. These conditions require ongoing management exactly the kind of care that becomes most difficult to access when every appointment carries a direct and indirect cost.

Telehealth does not solve these structural problems. But it lowers the barrier to ongoing care in a system where that barrier is rising fastest for the people who need care most.

Cost-of-living pressures are not cyclical in the way that pandemic-era lockdowns were. The structural forces driving telehealth adoption rising fuel costs, housing stress, stagnant real wages in many sectors, and healthcare costs growing faster than incomes are unlikely to reverse in the near term.

This means the behavioural shift is probably permanent. Patients who have switched to telehealth to save money are unlikely to switch back when prices continue to rise. Providers who have invested in digital platforms will continue to use them. And the policy environment, with expanded Medicare telehealth funding and a National Digital Health Strategy through 2028, is explicitly designed to sustain virtual care delivery.

The question is not whether telehealth will grow. It is whether traditional in-person care models can remain viable alongside it or whether the economics will force an even more dramatic structural shift in how healthcare is delivered in Australia.

Several trends are likely to accelerate in the coming years.

First, hybrid care models will become the norm rather than the exception. Most providers will offer a mix of in-person and virtual services, with the balance determined by clinical need, patient preference, and increasingly cost.

Second, patient expectations will shift. As more people experience the convenience and cost savings of telehealth, tolerance for the logistical burden of in-person appointments will decline. Practices that do not offer virtual options will lose patients to those that do.

Third, policy will need to catch up. Medicare rebate structures, NDIS pricing models, and workforce regulations were designed for a system built around physical premises and face-to-face contact. If telehealth is to be a permanent feature of the healthcare landscape, funding and regulation must reflect that reality.

Fourth, equity must be centred. Without deliberate investment in connectivity, digital literacy, and culturally appropriate platforms, telehealth will serve those who already have the most access and leave behind those who have the least.

Telehealth is not growing because the technology got better. The core platforms have been available for years. It is growing because the economics of in-person care are breaking down for a significant portion of the Australian population.

This is a forced behavioural shift, not an innovation story. And it carries implications not just for how healthcare is delivered, but for who can access it, how much it costs, and whether the system is designed to serve everyone or only those who can afford to show up in person.

Telehealth may not be perfect. But for many Australians, it is becoming the only practical way to access care. That is not a technological triumph. It is a signal that something in the system needs to change.

About the Author

Melinda McGee is a healthcare economics writer specialising in cost pressures, funding models, and system sustainability across NDIS and aged care.