The recent $39 million NSW Budget allocation towards AI scribes for clinicians reflects growing recognition of the valuable role technology can play in easing administrative burden and workforce burnout across our health system.
This is a positive move. But it should be seen as a first step of a much larger journey.
AI scribes can reduce documentation load, improve efficiency and free up time for care. Yet they do not, in themselves, address the need to fundamentally change how care is delivered.
As we face a future where the healthcare burden will be shaped by ageing populations, the increasing burden of chronic disease and multiple co-morbidities, we need to look to technology to shift from an episodic, acute care system, to a decentralised, remote-enabled end-to-end health and care journey.
Digital and connected health is not simply about applying AI or software to make the existing system more efficient. It is about using technologies to create new ways to prevent, diagnose, treat, manage and monitor health and care.
It looks like at-home treatments that help patients avoid surgery, remote models that deliver specialist care outside traditional settings, software-based and software-enabled health and medical technologies, and connected devices that generate new clinical insights without invasive procedures.
It also covers technologies that deliver evidence-based therapies digitally, enable continuous monitoring between clinical encounters, support independent living and healthy ageing, and translate breakthroughs into everyday care.
These innovations could save millions of lives.
Australia has built world-class research, deep clinical expertise, strong software talent, a sophisticated regulatory system, and a growing pipeline of evidence-based companies in this sector. But because digital and connected health sits between fast-moving technology and slower-moving healthcare, it is too often misunderstood, undervalued and under-supported.
The consequences are becoming harder to ignore.
Diagnosing the problem
A recent industry survey found 92 percent of Australian digital and connected health SMEs are seeking to raise capital within the next 12 months. That is unsurprising in a sector where funding and time is required for evidence generation, clinical validation, regulatory clearances, cybersecurity, market entry and long procurement cycles.
But 46 percent admitted they were raising funds just to survive.
Eighty-six percent identified access to capital as one of their top five challenges, while 80 percent called for sector-specific investment funds capable of understanding the specialised capability their work requires.
Generalist capital often struggles to assess digital and connected health because it sits at the intersection of healthcare, technology, regulation and procurement. If Australia wants to prevent the loss of intellectual property, talent, jobs, economic value and healthcare outcomes, we need investment structures that reflect this sector.
Prescribing a pathway to scale
From a funding perspective, that means both private and public sector support. Non-dilutive investment and acceleration programs are valuable, but they can leave world-class companies facing a capital cliff once exhausted.
Mechanisms such as an expanded Biomedical Translation Fund, support for more diverse and emerging fund managers, and fund-to-fund backing from sovereign vehicles such as the National Reconstruction Fund, Innovation Victoria and the Queensland Venture Capital Development Fund could crowd-in private capital into domain-specific funds.
This would help companies move from evidence and early demand into commercial scale, while building the specialist capability Australia needs for a diversified, knowledge-based economy.
But investment is only part of the problem. Some of the best capital available to market-ready companies is revenue.
If Australian health systems are not incentivised to acquire and deploy Australian digital and connected health innovation, those companies will increasingly build, validate and scale elsewhere. The same survey found 74 percent of companies believed procurement reform would be transformative.
Australia spends approximately $200 billion each year on public healthcare. Procurement settings aligned to the “if not, why not” principle in the Ambitious Australia Strategic Examination of Research and Development Final Report would help more of that spend support local innovation, while creating stronger, faster-growing digital health companies.
Beyond funding and procurement, 66 percent of companies called for a dedicated health technology assessment and reimbursement framework that better reflects how digital and connected health deliver value and supports outcomes-based care.
AI scribes can save time, and that matters. But the real prize is bigger: a vibrant, fast-growing, evidence-based digital health sector delivering better health and economic outcomes for Australia.
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