At its annual general meeting at the end of last week, Gordon Ballantyne, new chief executive of Healthscope, Australia’s second largest private healthcare operator, said that he expected current private hospital market conditions to continue in the short term.
Results for next year, he said, would be “broadly similar” to 2017. At the end of August, Healthscope reported an almost 40% crash in net profits for the year, sending the group’s share price down more than 15%.
“Softer private hospital market conditions and variability in patient case mix have resulted in some margin pressures, where costs in certain areas of the business have grown faster than our health fund revenue increases,” he said.
To combat this, Ballantyne outlined four initiatives that the group had to win. First, Healthscope had to accelerate profitable topline growth; second, the group had to drive greater operational efficiency; third, it was planning a thorough review of its portfolio; and fourth, it had to execute its brownfield expansion strategy.
Investors were not convinced and on Friday, Healthscope shares slipped almost 3% to A$1.87 (US$1.46).
