Could be either, or likely a combination of both, where upgrade of acquired sites and infrastructure is required to improve facilities acquired. Business case makes sense as difficult for the 1,000 odd opthalmologists to maintain their own theaters. Further, tight Federal and State funding for public facilities and flow on effects to ever increasing waiting lists makes these groups strategically attractive.
See the 2007 ASX releases, for background given during the time the greenfield Rivercity site was funded and built by group.
Somewhat back to the future; now that the doctor partner remuneration and consequential debt funding concerns have been largely addressed, the strategies of the past can resurface. What appears to have permanently changed is the ability to make any money from doctor exertion itself, given their 65% revised share of EBIT earnings diminishes their attractiveness as an avenue of profit, hence the increased focus on theatre fee income instead. Some margin potential exists in the higher margin surgery and laser correction services, as compared to consultation income, performed by the doctors, but difficult nonetheless.
Keep check of the Medicare Item Reports monthly data volume statistics released around 24/25th of each month, particularly item 42702. Good growth for Jan 2013 over same month noted, Vic NSW and QLD are the ones that matter.
VEI Price at posting:
66.5¢ Sentiment: None Disclosure: Not Held
