This article--The Hospital Is No Place for the Elderly --in The Atlantic speaks a lot of sense in the light of this kind of foreboding about Australian governments needing to make tough choices now to balance the budget, rather than waiting for a crisis to act.

Australia’s future budget problems arise because governments are simply not raising enough in taxes to fund the medical costs of helping us live longer, or to pay the extra living costs via the age pension. The biggest problem is health spending. While education, research and infrastructure will benefit future generations, spending on increased health and age pensions increased the most. While health spending increases workforce participation a little, its major effect is to help today’s generation live longer and enjoy happier retirements. Today’s long happy retirements are being funded by structural deficits that send the bill to the next generation of workers.

The Atlantic article says that thanks to modern treatment, people commonly live into their 70s and 80s and even 90s, many of them with multiple chronic ailments:

A single person might be diagnosed with, say, heart failure, arthritis, edema, obesity, diabetes, hearing or vision loss, dementia, and more. These people aren’t on death’s doorstep, but neither will they recover. Physically (and sometimes cognitively), they are frail...What to do with this burgeoning population of the frail elderly? Right now, when something goes wrong, the standard response is to call 911 or go to the emergency room. That leads to a revolving door of hospitalizations, each of them alarmingly expensive.

A more appropriate model is providing care and support at home; a kind of care that is more about meeting patients’ goals rather than performing procedures. Home-based model of primary care represents a change in the culture of health care in that hospitalization is a last rather than a first resort.