One person's costs is another person's income

What a relief!

According to Jessica Gardner in the Sydney Morning Herald, a recent report suggesting that the growth in utilization of the Australia private health care system might slow down is off base.

Two rival private hospital leaders, Healthscope's Robert Cooke and Ramsay Health Care's Chris Rex, say a research report from Macquarie that warned of a hit to the companies' growth is premature and ignores important trends.

Macquarie's health analyst published a note on Monday warning that a federal government review of the Medicare Benefits Schedule would hit 'utilisation' of services, which is the largest driver of revenue growth for the companies.

Investors were unnerved by the analysis. On Monday Healthscope shares fell 4.8 per cent to $2.36, while Ramsay shares lost 3.2 per cent to $60.65.

In a strident statement Ramsay's Mr Rex said the report failed to consider further utilisation growth linked to the ageing population. "Macquarie's report incorrectly concludes that the modest impact of ageing in the past means that the impact will be minimal in the future," he said. "But it is the future impact of ageing – the baby boomers moving into the 60-70 year bracket - that needs to be considered... We have not yet felt the ageing impact – it is yet to come."

Whew!