Almost half of Australian healthcare organisations are already deploying artificial intelligence, but fewer than four in 10 healthcare leaders say digital and AI investment is easing workforce pressure, according to a new industry report.
The Capacity Paradox, a State of Industry Report prepared by Australian Healthcare Week (AHW) ahead of its 2027 event, looks at workforce, technology and organisational transformation across the Australian health sector.
The report is based on a survey of 175 healthcare leaders from public and private providers, state and territory health departments, technology and digital health organisations and industry partners. Survey findings were supplemented by structured interviews with four senior healthcare leaders and Australian and international research.
Interviewees included Royal Victorian Eye and Ear Hospital chief clinical informatics officer Kate Renzenbrink, NSW Ministry of Health clinical director of system sustainability and performance A/Prof Amith Shetty, and Catholic Healthcare CEO Josh McFarlane and CIO Brett Reedman.
The report identifies digital health becoming core infrastructure rather than a “finite initiative” as one of six findings from the research, alongside rapidly increasing AI adoption and continuing questions over whether technology is delivering additional workforce capacity.
It found 44.9 per cent of organisations were deploying AI in selected areas or had embedded it across multiple functions, while 55.1 per cent were still exploring AI or had not started implementation.
However, only 36.5 per cent of respondents said current digital or AI investment was easing workforce pressure. Almost one in five reported technology was adding to workload, with implementation, training and workflow redesign placing additional demands on staff.
The report found little evidence that AI investment was moving too quickly for healthcare organisations. Only 10.3 per cent of respondents believed investment was outpacing organisational readiness, compared with 38.5 per cent who believed investment was moving more slowly than readiness and 37.8 per cent who considered the two broadly aligned.
AI use was producing its clearest returns in lower-risk administrative work, according to the report, including documentation and patient engagement rather than clinical decision-making.
It cited the rapid uptake of AI scribes, estimated to have reached about 40 per cent of Australian GPs by late 2025 and the NSW government’s $38.7 million commitment to extend access to AI scribes to up to 6000 clinicians.
A/Prof Shetty said some of the strongest returns could come from less visible applications.
“The biggest ROI from AI is going to come from our backend operations – site allocations, task allocations, discharge summaries,” he said.
“Screening tools in the waiting room are great – they’re flashy, but that’s not where the ROI is.”
Digital foundations remain uneven
The report argues that technology itself is increasingly not the main barrier to digital transformation.
Funding and financial capacity, workforce capability and wellbeing – and culture, leadership and change adoption all ranked ahead of technology, governance and integration among reported barriers to transformation.
It also points to continuing weaknesses in Australia’s underlying digital infrastructure, citing Productivity Commission criticism of My Health Record and limited electronic medical record coverage in rural and regional hospitals.
Ms Renzenbrink said her hospital was operating several disconnected systems alongside substantial paper-based records, while upgrading a digital health record that had not been meaningfully updated since 2016.
“What we’ve done with our electronic medical record implementation, we’ve just digitised paper processes a lot of the time,” she said.
The report says implementation capability – including governance, data quality, workflow redesign and change management – is becoming more important than technology selection itself.
Digital capability also needed to extend beyond individual organisations as healthcare becomes increasingly interconnected.
Mr Reedman said interoperability across hospitals, general practice, community services and aged care should be a priority – including the ability to transfer data across the wider healthcare ecosystem.
The report points to NSW Health’s Single Digital Patient Record and Single Front Door programs as examples of infrastructure being designed around interoperability and process redesign across public, private, urgent care and GP services.
It notes the next stage of digital transformation will depend less on access to advanced technology than on whether organisations can build the leadership, workforce capability, governance and cross-sector collaboration needed to use it effectively.
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