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02 Aug 2016

The success of Labor’s Medicare campaign and the Coalition’s slender margin of support in Parliament have virtually killed off the chances of significant health reforms in this term of government, according to investors.

While re-appointed Health Minister Sussan Ley is pushing ahead with the Medical Benefits Schedule review, the Health Care Homes trial, pilots of the My Health Record e-health system and reforms to mental health, analysts at Macquarie Group and UBS think the window to further major health changes has been slammed shut by the tight election.

UBS healthcare analyst Andrew Goodsall has put the chances that the Government will abandon the Medicare rebate freeze by next election at 75 per cent, and told The Australian it would be leery of undertaking any other major policy initiatives.

“Classically, the political cycle allows more substantial reform to occur in a post-election Budget,” Mr Goodsall said. “However, the success of the Labor Party campaign against the privatisation of Medicare may limit Government reforms on Medicare in the near-term.”

His doubts were shared by Macquarie analysts who, in a note to clients, said the Government would have little appetite for “meaningful” reform in the short- to medium-term given the resistance it has faced in Parliament and its near-run election result.

This period of relative policy stagnation would help ensure those parts of the healthcare industry that were prospering under current arrangements to continue enjoying solid growth.

“In our view, the benign political outlook for healthcare reform suggests private hospital growth is set to continue unabated at the lofty levels seen historically,” they said.

Adrian Rollins



Published: 02 Aug 2016