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News.com.au
4 days ago
- Business
- News.com.au
Criterion: Healthscope's collapse puts private hospitals in a world of pain, but there's still a faint pulse
The unlisted Healthscope's misfortune casts the spotlight on the listed Ramsay Health Care Private hospital profitability has shrunk, but the sector still accounts for more than 40% of admissions Ramsay's rehab includes putting its loss-making French business up for sale Private hospital operator Healthscope's lapse into administration this week highlights the role sector's financial woes that have been brewing for years – along with that of the private equity owner's excessive debt. As the country's second biggest hospital operator, the unlisted Healthscope is a case of 'too big to fail'. The operating business is expected to be sold and recapitalised, with lenders and landlords taking a suitable haircut. Notably, the Commonwealth Bank (ASX:CBA) was comfortable enough to extend a $100 million loan to keep the wards ticking over across Healthscope's 37 hospitals. But the structural pressures will remain, with private insurance payors not adequately compensating the hospitals for ratcheting costs (notably wages). The insurers, in turn, are being squeezed by the government's control over premium increases. At the same time, medical advances mean more procedures are done via day surgery, which is less lucrative. The private hospital sector should have much going for it, given the ageing populace and the pressures on the public hospitals. According to the Australian Private Hospitals Association, the 'privates' accounted for 41.2% of all hospital admissions in the 2022-23 year, a gain on the pre-pandemic 40.3% share in 2018-19. They also account for 705 of elective procedures. Global expansion puts Ramsay in the sick bay Healthscope was listed until 2019, when it was purchased by private equity. That leaves Ramsay Health Care (ASX:RHC), the country's biggest operator, as the only ASX-listed exponent. Ramsay owns or operates 76 hospitals and clinics locally, as well as 34 in the UK and 244 in Europe. In a misguided expansion, Ramsay acquired just over half of French group Ramsay Sante – the crux of its European ops – for around $140 million in 2010. Sante means 'good health' but there hasn't been much of that. In early 2022 Ramsay then acquired Elysium, which runs mental health and rehabilitation facilities in the UK, for $1.5 billion. The French and UK hospitals face similar headwinds to the local sector – probably more so given the reliance on governments that have been equally stingy with keeping up with cost inflation. As a result, Ramsay's overseas operations have performed worse than its local ones, resulting in the board's decision to find a buyer for Ramsay Sante. In the words of Allan Gray analyst Tim Hillier, 'grossly inadequate government funding has made Ramsay Santé an unsustainable essential services charity.' Serious but stable condition Ramsay shares have declined around 25% over the last year and halved over the last five years. Despite this decline, most brokers have a 'hold' call on the stock. In other words, they think Ramsay's condition will improve but they're not braving a 'buy' call until a peer puts their delicates on the line first. Ramsay CEO Natalie Davis describes 'significant value and growth opportunity' in the Australian business, albeit with a 'multi-year transformation required.' In the first (December) half, Ramsay reported a 6% revenue increase to $8.54 billion, with a reported loss of $105 million but underlying earnings from continuing operations steady at $500 million. But Elysium's earnings declined 41% to $14.9 million, while Ramsay Sante's contribution fell 23% to $102 million. Ramsay is pursuing operational improvements and tightening capital expenditure'. Value emerges amid aversity While myriad risks remain, Ramsay's subdued valuation arguably more than compensates for them. One wildcard is that Ramsay will receive a better-than-expected price for the French ops. In any event, the divestment would remove a gangrenous limb. There's also the 'replacement value' consideration. Allan Gray's Hillier notes a new 100-bed hospital would cost $150 million today – and Ramsay has 9300 beds across its network. Ramsay's $8 billion market cap also pales against the $30 billion, $88 a share billion cash bid lobbed by private equiteer KKR in 2022. The unrequited deal offers some glimpse of the potential upside should Ramsay's stint in rehab prove successful. But as broker Wilsons cautions: 'this situation is going to get harder before it gets easier. Easier means change and change is hard'.
CNN
14-05-2025
- Health
- CNN
CNN10: The big stories of Wednesday 5/14, explained in 10 minutes
Today on CNN 10, we get an update on an American hostage released by Hamas as he is reunited with his family in Israel. Then we'll learn about medical advances that could save the thousands of people on organ transplant waitlists, before hearing from a star commencement speaker, and learning what high school skill helped a woman save a teen's life. All this and more on today's CNN 10!
Forbes
13-05-2025
- Health
- Forbes
Wealth Is Knowledge, But There's No Knowledge Without Investment
Alzheimer's disease ranks as the sixth leading cause of death in high-income countries like the United States. This is according to the World Health Organization (WHO). It's a positive development, a sign Americans are living much longer, and they're living much longer because what used to kill them with ease no longer does. Enhanced investment could eventually push Alzheimer's off the list. The WHO report instructs on investment and cures. In low-income countries, tuberculosis to this day ranks #8 among the most common killers. Notable there is that tuberculosis last loomed as the biggest threat to American life in the 19th century. Wealth creation explains the change. As wealth expanded in the U.S., so increased capital that could be matched with doctors and scientists on the way to cures for diseases that formerly killed us with ease. As the late Dr. Lawrence D. Dorr explained it in his 2011 book Die Once, Live Twice, medical and pharmaceutical advances meant and mean that Americans are increasingly surviving maladies that used to be deadly. Thought of another way, in the not-too-distant past Americans and people from other high-income countries didn't live long enough to get Alzheimer's. It brings to mind where we go from here. What diseases, including Alzheimer's, can be met with pharmaceutical and other medical advances that render today's top killers tomorrow's afterthoughts? The list is long. At the same time, the investment necessary to discover a much better health future is growing. According to a report from ALLIANCE, a coalition out to enhance biopharmaceutical discoveries, since the passage of the 2017 Tax Cuts and Jobs Act (TCJA), top U.S. pharmaceutical companies have invested over $160 billion in new pharmaceutical developments. The challenge now is that assuming the TCJA isn't extended, the corporate tax will revert to the 35 percent that prevailed prior to its reduction to 21 percent. It's useful to keep the potential corporate tax increase prominently in mind while contemplating the investment mentioned in the previous paragraph. Precisely because drug development is so expensive, and so costly over such long stretches, tax policy over long stretches looms large. Uncertainty about how investment, along with how success borne of investments will be taxed renders the commitment of capital necessary to drive development a daunting prospect. Which speaks to the good and bad of the TCJA. Necessary corporate tax cuts were 'paid for' in 2017 with other tax increases, including higher taxation on top earners with a shrinkage of the SALT deduction. The very notion of 'paid for' is problematic. A reduced tax burden on individuals and corporations needn't be 'paid for,' the burden should just be reduced. The well-to-do shareholders of corporations frequently pay high rates of taxation, and they were as mentioned required to pay more in the way of taxes under the TCJA as a path to 'paying for' the corporate tax cuts. Again, this is wrongheaded. It implies that individuals and corporations work for government, and that tax policy must be tailored to meet government needs, not that of individuals and corporations from whom governments attain their sustenance. No thanks. American corporations and individuals are overtaxed, period. And the latter is made evident by the fact that a mere reduction of the corporate tax was 'paid for' via higher individual taxes. From this truth the aim must be to keep corporate taxes at TCJA levels, or reduce them, and doing this without raising taxes on individual earners. The simple truth is that there is no progress, and there are no health advances, without knowledge borne of wealth. So let's reduce taxes on individuals and corporations to increase the capital commitments that make discovery and knowledge possible. Life and health depend on it.
Yahoo
08-05-2025
- Health
- Yahoo
US infant mortality dropped in 2024. Experts partly credit RSV shots
NEW YORK (AP) — The nation's infant mortality rate dropped last year after two years of hovering at a late-pandemic plateau. Some experts think one reason for the drop could be a vaccination campaign against RSV, or respiratory syncytial virus, which is a common cause of cold-like symptoms that can be dangerous for infants. The infant mortality national rate dropped to about 5.5 infant deaths per 1,000 live births in 2024, according to provisional data from the Centers for Disease Control and Prevention posted Thursday. That's down from about 5.6 per 1,000 live births, where it had been the previous two years. CDC officials believe the findings will not change much when the final numbers come out later this year. Infant mortality is the measure of how many babies die before they reach their first birthday. Because the number of babies born in the U.S. varies from year to year, researchers instead calculate rates to better compare infant mortality over time. U.S. infant deaths fell to about 19,900 last year, according to CDC data, compared with about 20,150 in 2023. The U.S. infant mortality rate has been worse than other high-income countries, which experts have attributed to poverty, inadequate prenatal care and other things. Even so, the U.S. rate generally has improved over the decades because of medical advances and public health efforts. The 2022 and 2023 levels were up from 5.44 per 1,000 in 2021 — the first statistically significant jump in the rate in about two decades. Experts attributed those years to a rebound in RSV and flu infections after two years of pandemic precautions. In 2023, U.S. health officials began recommending two new measures to prevent the toll on infants — one was a lab-made antibody shot for infants that helps the immune system fight off the virus, and the other was giving an RSV vaccine to women between 32 weeks and 36 weeks of pregnancy. That effort is probably one explanation for the improvement, said Dr. Amanda Williams, interim chief medical officer for the March of Dimes. In a separate CDC report released Thursday, researchers noted infant hospitalizations in the 2024-25 respiratory virus season were more than 40% lower than past averages. But more work needs to be done to tease out other reasons, Williams added, noting that much of the improvement in 2024 was in infants who were at least one month old when they died. That could be explained not only by fewer deaths from RSV but also from other causes, like accidents, homicides or SIDS. ___ The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute's Science and Educational Media Group and the Robert Wood Johnson Foundation. The AP is solely responsible for all content.
