Pathology players keeping keen eye on budget

Australia’s biggest listed healthcare company, Sonic Healthcare, reported a half-year loss in February.

Among companies watching the budget this week are likely to be pathology providers. There’s talk $500m worth of extra funding could be up to grabs.

However, some doubt this will be among the government’s healthcare promises just weeks out from an election where Labor will no doubt be focused on offerings which sway voters.

The largest listed operator in the sector is Sonic Healthcare, ahead of Healius and Australian Clinical Labs. Healius in February reported a $12.8m half-year loss but earnings before interest, tax, depreciation and amortisation rose.

It said cost inflation continued to be a factor, particularly with labour.

Healius said it welcomed the government’s announcement it would be reintroducing index­ation to a patient’s Medicare pathology rebates for tests for haematology, immunology, tissue cytology, infertility and pregnancy from July 1.

The commonwealth was continuing a 25-year funding freeze for over two-thirds of all pathology tests covered by Medicare, along with cuts of $356m to tests for vitamin B12 and urine, strongly opposed by the Australian Medical Association and other medical groups.

Healius said an internal review was being conducted by the Department of Health on Medicare rebates still subject to the indexation freeze.

“Healius is engaging with the review and supporting the ­sector-based campaign, Keep Pathology Bulk Billed,” it said.

Healius has been considered a takeover target in the past, and more government funding could once again place it in the crosshairsof a suitor.