Ann: S&P DJ Indices Announces March Quarterly Review, page-19

The govt attack seems to be focused on specific areas not general supply. The CAJ case is clearly a reaction to the overuse of MRI scans and other scans. I have asked my GP who I know well and he says there are a few issues but he sees it as more related to unnecessary upward or high cost referrals. The medication issue he also sees as being under pressure with wide spread reduction in antibiotics usage needed.

There are pricing mechanism changes and probable co-payments processes in areas that are needed.

When asked he felt the pot of spending was still going to increase in response to an ageing population but that it would have to be a bit out of governments pockets and a lot more out of the wealthier populations pockets. Thats where he sees the reductions - No xray or scan for what must be a sprain as if you are private you will have to fork out $100 plus and not necessary.

Another person who is allied to it said the limit of contributions from private healthcare are likely to stay the same but the need and usage likely to go up. The ability of the medical aids to recover increases via above inflation raises of premium looking to be difficult.

The other big cost right now is the NDIS and that has an unknown costing...

So he felt that a PGC would be less likely to be affected than certainly a CAJ - I think LHC has a specialised area that may well be affected but have not looked at that for a while.

No doubt in his mind that there will be a general tightening but thinks the suppliers who are larger can cope better as they spread it across.

So all in all I feel its not likely to affect PGC but the industry is expecting to have less to spend so even if its not true in all areas the capex is under more scrutiny and this is no longer an area that has no limitations to growth as the spend has to be pulled back from its growth trajectory.

However if an industry is no longer flavour of the month the entire area share prices are affected. Even down to aged care look at REG.

Thats my take on it... and thats why I dont sell my core holding and will buy a few more at basement prices if I get offered them.