Introduction Three hypotheses have been advanced to predict changes in population health in countries experiencing low birth and death rates, and increasing expectation of life. Determining which of these best accounts for changing patterns of illness and death is an important step in understanding both the public health and economic impacts of health intervention in an ageing population. The aim of this study was to evaluate the compression, expansion and dynamic equilibrium theories in Western Australia.

Methods Life tables and survival curves for first-time hospital episodes for chronic disabling and activity limiting conditions and all cause mortality in persons aged 15 or more years in WA in 1980–2003 were constructed using data from the WA Data Linkage System. Changes in life expectancy, average age at first-time hospitalisation and time spent in chronic disabling or activity limiting states were used to evaluate the competing hypotheses.

Results Life expectancy increased by 4.0 and 2.6 years over the 24-year study period in males and females respectively. However, average time spent with a diagnosed chronic disabling condition increased by 8.2 and 8.1 years in males and females respectively, while time spent in an activity limiting state remained largely unchanged.

Conclusion We found evidence to support an expansion of morbidity and some evidence against the dynamic equilibrium theory. This is consistent with population trends towards higher levels of self-reported ill-health in Australia and portends further challenges for the containment of healthcare costs in the future.