A Market Growing Faster Than Its Funding Model
Australia’s digital therapeutics market was valued at USD 138.5 million in 2026 and is projected to reach USD 436.1 million by 2031, a compound annual growth rate of 25.8%. That growth is being driven by regulatory support, healthcare system modernisation and the rising burden of chronic disease. Yet the market’s most persistent structural problem is not demand or technology. It is the absence of a durable funding pathway that allows proven digital therapeutics to move from pilot projects into standard care.
The APACMed report Enabling Remote Care, published in January 2026, puts the problem plainly: Australians lack equitable and timely access to proven, evidence-based digital health technologies that enable virtual care and guided self-management. The report analyses current funding and adoption barriers and proposes a nationally consistent funding framework that aligns with Australia’s existing structures, including the Medicare Benefits Schedule and activity-based funding. The message is that digital therapeutics are being asked to compete for attention in a system that has no dedicated line item for them.
The Pilot-to-Mainstream Trap
The Medical Technology Association of Australia has taken the argument further. In a March 2026 submission to a Senate inquiry on rural and regional Medicare access, MTAA recommended that Medicare should fund digital therapeutics and remote patient monitoring where they demonstrably support early intervention, better self-management and improved monitoring for chronic and complex conditions. The submission highlights a structural trap: there is no funding in the community setting for the technology itself, and no funding for the nursing or allied health staff required to deliver digital programs virtually.
That gap is especially consequential outside metropolitan centres. In rural and remote settings, preventable deterioration often reflects gaps in follow-up, long intervals between appointments and difficulty accessing timely review. A funded DTx and RPM pathway would give local clinicians another practical tool to maintain contact, reinforce treatment plans and identify problems earlier. Without it, digital therapeutics risk becoming an urban convenience rather than an equity intervention.
The Evidence Case Is Stronger Than the Funding Case
The clinical case for funding is not speculative. Cardihab, a TGA-registered digital therapeutic for cardiac rehabilitation, combines a mobile app, guideline-aligned care programs and structured telehealth consultations. A five-year statewide data linkage study cited by MTAA found that 12-month outcomes improved uptake and survival, were more cost-effective in 87% of scenarios, and reduced re-admission bed days by 71%. Those are the kinds of numbers that health economists usually reward. Yet Cardihab still operates in a system where the technology itself has no community funding line.
What a Nationally Consistent Framework Would Require
The APACMed and MTAA proposals converge on several design principles: a dedicated health technology assessment pathway for digital health, a national library of approved DTx and RPM products for quality assurance, and reimbursement models that recognise both the software and the clinical support wrapped around it. The MTAA also recommends patient-specific reimbursement for individual technologies and clinical support services, augmented with block funding for very remote, low-volume settings.
The Australian government’s digital health innovation agenda acknowledges the potential of digital therapeutics but has not yet created a comprehensive reimbursement pathway for DTx, remote monitoring platforms and AI-enabled clinical technologies. That gap is now the central policy question for the sector. The technology exists; the clinical evidence is accumulating; the funding architecture remains the missing piece.
