Ramsay Health Care absent from business conference

The federal government is no longer reviewing the scope of the prostheses list.

As the Macquarie Australia Conference gets under way in Sydney this week, one name conspicuously absent from the list of companies presenting is Ramsay Health Care.

It’s understood that Ramsay has pulled out of the conference for this year.

Perhaps it has something to do with the fact that its chief executive, Craig McNally, and chairman David Thodey were in Europe last week.

Ramsay signalled to its shareholders while presenting its results earlier this year that it may be open to a sale of the European hospital business it owns 52.3 per cent of, Ramsay Sante.

Ramsay said it would “continue to review the business in the context of optimising shareholder returns” and it was “actively assessing a range of strategies to unlock value and drive improved performance from our portfolio of assets”.

Adviser UBS has been assessing options for Ramsay.

However, the challenge will be finding a buyer prepared to pay for the assets.

On a more positive note for Ramsay is the announcement of further government funding flowing to healthcare, with Ramsay undertaking some of the work for the government as a contractor.

But the best piece of news has been that the government is no longer reviewing the scope of the prostheses list that would have seen basic items removed which could be claimed at high prices, such as sponges etc.

A review of prostheses – artificial body parts designed to restore function or appearance – had been widely expected.

The review would eliminate some items that private hospital operators could claim, leaving them in a position where they would need to negotiate with private health insurers for compensation.

Private hospital operators have lobbied for such a review.

However, the move by Health Minister Mark Butler not to do so was seen as a way to offer some financial assistance to the struggling private hospital sector which is wrestling with staff shortages and higher staff costs.

It’s been the biggest issue on the agenda each year at the annual Private Hospital Association Conference, which was held this year in April.

Ramsay is the biggest claimant in Australia for prostheses and any changes would likely have created a hit to its bottom line of tens of millions of dollars.

Ramsay’s earnings before interest and tax of $512.3m for the half year were down 4.7 per cent, reflecting an improved result from Australia, strong growth in the UK region, offset by a decline in earnings from Ramsay Sante.