Ramsay Health Care has weighed into the stoush between Medibank Private and hospitals group Calvary, to defend the quality of Australia’s private healthcare system.
Speaking as the company, Australia’s largest private hospitals owner, reported a 27 per cent rise in its full year profit, chief executive Christopher Rex rejected any inference that there was a problem with quality in the sector.
“I completely refute that, there is nothing wrong with quality in the Australian healthcare system ” he said.
“I think we need to be careful that we follow the advice of Cervantes and don’t tilt at too many windmills, because there is no windmill here,” he said, in a reference to Miguel de Cervantes’ classic Don Quixote.
Medibank Private has locked horns with Calvary, which operates 15 hospitals across Australia, by refusing to pay for 165 events it says are highly preventable as it looks to rein in its costs.
Fellow insurer nib also entered the debate this week, calling on hospitals to lift their game.
“Both private health insurers and providers such as hospitals will do very well into the future, but it can’t be on the back of tolerating inefficiencies, poor quality over-serving and cost variations,” chief executive Mark Fitzgibbon said on Monday.
“So I think we are heading toward a more mature future whereby both providers and hospitals in particular recognise that accepting pay for performance and accepting higher standards of quality are part of the future.”
Ramsay made a net profit of $385.5 million for the year to June 30, from $303.8 million in 2013/14.
Earnings per share rose 20 per cent during the year and the company said it was aiming for core net profit and EPS growth of between 12 and 14 per cent for 2015/16.
Meanwhile, it lifted its fully-franked final dividend 9.5 cents to 60.5 cents per share.
Ramsay shares were up $3.23, or 5.37 per cent, to $63.55 as of 1415 AEST.
The result was boosted by the company’s acquisition of Generale de Sante in France, which made it that country’s largest hospital operator.
Mr Rex said the company would continue to expand its international operations and would also receive a boost from aging populations.
“Utilising our global experience in acquiring and integrating hospitals, we will continue to canvass opportunities in new and existing markets,” he said.
“At the same time, demographics will continue to drive the need for capacity expansion and we expect ongoing benefits to flow from our brownfield investment strategy.”
The company is looking at further opportunities in France and is also targeting the Chinese market.
Ramsay has signed an agreement to jointly operate five hospitals in the city of Chengdu, which is plans to use as a foothold into for its expansion into that country.
RAMSAY’S EXPANSION PAYS OFF
* Net profit up 27pct to $385.6m
* Revenue up 50pct to $7.36b
* Dividend up 9.5 cents to 60.5 cents