Healthscope, the operator of 45 private hospitals across Australia and dozens of pathology labs across Asia, reported a 3.8 per cent increase in revenue and earnings of $411.4 million, up 3.5 per cent on the previous year.
Speaking at the company's annual general meeting, managing director and CEO Gordon Ballantyne said he sees opportunities for Healthscope to "play an increasingly important role in the delivery of healthcare services in Australia."
Revenue growth from the company's hospital business rose 3.4 per cent to $2 billion, which Mr Ballantyne acknowledged was below expectations.
He attributed the result to the under-performance of its hospitals in Victoria and Tasmania.
"This was due to a number of contributing factors, including increased competition at certain sites, slower than planned ramp up of patient volumes in the first few months of two of our newer facilities and higher wage costs," he said.
"...we are confident of the long-term private healthcare industry fundamentals. However, 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," added Mr Ballantyne.
He outlined a series of initiatives designed to enhance the performance of the company's hospital business.
The initiatives include a focus on operational efficiency, underpinned by a detailed benchmarking exercise across all its hospitals. According to Mr Ballantyne, the process has identified a number of areas of improvement, which will be rolled out across 12 of its largest hospitals.
The company will also review the future role and growth potential of each hospital.
"The process is already underway with a review of the Victorian portfolio well advanced and a review of the rest of the portfolio planned to complete by December 2017," he said, adding the company must "successfully execute" its brownfields expansion strategy.
In the past year, the company invested $485 million in growth projects. Five hospital expansion projects were completed, delivering an additional 214 beds, 13 operating theatres and two emergency departments. It has invested an additional $1.1 billion in seven projects, including $840 million for the Northern Beaches Hospital in Sydney.
In her address to the annual general meeting, company chair Paula Dwyer welcomed recently announced reforms of private health insurance, headlined by pricing reform of prostheses.
"...the rising demand for healthcare is placing pressure on the industry as a whole. Last week we were pleased to see the Federal Government outline a comprehensive private health insurance reform package. This focused on increasing private health insurance participation through more affordable policies for younger Australians, and increasing overall affordability of health insurance through savings from a reduction in prostheses pricing.
"The prostheses changes are unlikely to have a material impact on Healthscope’s business, however they are important as part of a broader imperative to keep regulation of healthcare contemporary and relevant. We were particularly pleased to see changes to remove waiting periods for patients seeking mental health treatments in private hospitals.
"This policy change supports an increasing role for private hospitals in the delivery of these important services," added Ms Dwyer.