Contents
The hospital sector 3
Expenditure associated with the treatment of patients in all hospitals was A$34.1bn
in FY07, representing 36.2% of Australia’s total healthcare expenditure.
3
Overview of the hospital sector 3
Hospital spend and health care in Australia 3
Hospital sectors in Australia – a number of different models 5
Public hospitals 8
Private hospitals – rate of growth has outpaced public admissions and expenditure 14
Hospital players 15
Growth in payments to private hospitals 22
Trends in the private hospital industry 29
Pathology 39
The Australian pathology market is characterised by scale players and market
growth rates have been in the order of 7% pa.
39
What is pathology? 39
Background 43
Australian pathology market 44
Medical centres 46
To date, consolidation of the medical-centre market has been limited, which we
believe provides an opportunity for listed players.
46
Number of GPs 46
What is a medical centre? 47
The GP workforce 47
Stakeholders in medical centres – GPs and patients 52
Diagnostic Imaging 55
In this section we examine the Australian diagnostic imaging market. 55
What is diagnostic imaging? 55
Australian DI market 56
The rise of the independent DI practice 56
Market share of the non-corporate sector is rising 60
Implications for PRY and SHL 61
Key industry issues 65
In this section we examine the spending outlook for the MLS, UK Health insurance,
the Australian MOU and the Australian Government.
65
The Medicare Levy Surcharge and private insurance 65
UK Health insurance 66
National Health and Hospitals Reform Commission 68
Valuation and gearing considerations 71
In this section we examine gearing issues, exchange-rate sensitivity and
comparable multiples.
71
Ready-reckoner on debt issues for healthcare companies 71
Sensitivity to the cycle 74
Comparable multiples 79