Ramsay CEO Craig McNally says Australia can’t eradicate Covid-19

As the cost of lockdowns mount for Australia’s biggest private hospital group Ramsay, chief executive Craig McNally says the country must learn to live with Covid.

Healtcare workers are big supporters of vaccination, says Ramsay CEO Craig McNally. Picture: Lisa Maree Williams/Getty Images

Craig McNally, chief executive of Australia’s biggest private hospital operator Ramsay, says the idea of eradicating Covid-19 is “naive” and the country needs to learn to live with the virus.

It is an attitude that is gaining traction as Australia’s vaccination rollout steadily gathers pace, with the promise of an easing of restrictions once 80 per cent of the population is inoculated.

For Ramsay, the cost of lockdowns and elective surgery delays has been high, with the company revealing Melbourne’s lockdown had wiped $70m of its earnings last year, and while it is yet to determine the cost of Sydney’s shutdown it said its NSW business was twice as big as its Victorian operations.

Mr McNally branded it the “most challenging 18 months of the company’s history”.

“I‘m not going to delve into what percentage of vaccination is the right percentage - there’s better people than me to do that - but what I will say is that the country needs to learn to live with Covid,” Mr McNally said.

“The important thing is that we make sure that we protect the vulnerable and then we learn to live with Covid because 100 per cent eradication of Covid is a naive objective.

“It might have been fined a while ago, but I think the reality is, we just need to learn to live with and make sure the health system has got the capacity and expertise to be able to deal with it.”

But debate is raging about when the country will reach ‘freedom day’, with National Australia Bank CEO Ross McEwan pencilling in Melbourne Cup day, while others such as Blackmores chief executive Alastair Symington says after Christmas is more likely.

To accelerate the uptake of vaccinations, SPC, Qantas and Healthscope have taken the lead of US companies in mandating shots. Meanwhile, the NSW government made jabs compulsory for all health workers on Thursday afternoon.

But Mr McNally said it was also difficult to mandate vaccinations - even for health workers - given doses remain in short supply, particularly in regional areas, and the government must fix access problems.

“We’ve got a significant part of our staff based in regional areas and they need access because we’re not getting a mandate if they can’t get access,” Mr McNally said.

“Whilst there is a priority given to healthcare workers, it doesn’t mean that they necessarily have access and so there has to be sorted out.

“We‘re absolute supporters of vaccination, but some of the practicalities and realities need to be in place to then not disenfranchise people.”

Regardless, he said a formal policy to mandate vaccinations had been unnecessary across Ramsay’s hospitals in the UK, France, Asia and Sweden, given most of its overseas staff had received the jab.

Ramsay Santé, which covers the company’s hospitals in France, Italy and Scandinavia, has so far treated 11,000 Covid patients, while its UK staff have looked after 650,000 patients since the start of the pandemic.

Mr McNally said healthcare workers therefore were well aware of the risks associated with the virus and supported vaccination, saying “lifting vaccination rates will be the key to the recovery”.

“In the UK, about 97-98 per cent of our staff are vaccinated, and that‘s without a mandate that you must be vaccinated. So that’s really good take-up, and access is a big driver. They can quickly access (the) AstraZeneca (vaccine).”

Ramsay’s full year net profit surged 58 per cent to $449m following the resumption of elective surgeries - the main earner for private hospitals - after the pandemic’s first wave. Revenue rose 3.9 per cent to $12.4bn.

“As all our regions emerged from the lockdowns in the fourth quarter of FY21 we started to benefit from the pent up demand for private healthcare services and we believe we are in a strong position to assist with addressing the public backlog of elective surgeries moving forward,” Mr McNally said.

“The recovery in volumes has, however, been disrupted by further lockdowns. Lifting vaccination rates will be the key to the recovery.”

Ramsay did not provide any financial guidance. But it will pay a dividend of $1.03 a share fully franked on September 30. This takes the full investor payout for the year to $1.51 a share, representing a payout ratio of 79 per cent of statutory profit.

“The higher than normal dividend payout ratio this year reflects our strong cashflow and financial position allowing the full year dividend to be restored to the FY19 level,” Mr McNally said.

“The board recognises shareholder support during what has been the most challenging 18 months in the company’s history.”

Ramsay shares were up 1.8 per cent to $67.78 on Thursday.