Fears of freeze on Medicare rebates

Freezing the Medicare rebate at is current level of $36.30 is likely to leave some patients facing a larger gap payment. Source: News Limited

PATIENTS may have to pay an extra $2.20 to see a doctor from November as fears mount the government will freeze Medicare rebates to fill a $17 billion budget black hole.

The Australian Medical Association yesterday called on the government to keep its "hands off Medicare'' as it reported speculation the government would freeze indexation of Medicare rebates to save $1.54 billion over the next four years.

"With the government looking at ways to reduce the Budget deficit, there is talk that they might freeze indexation of Medicare fees, in the same way that the Howard Government did in 1996,'' AMA president Dr Steve Hambleton said.

"The AMA calls on the government to rule out such a callous raid on vital health funding," he said.

Any short-term budget gain would have long term costs for the health system if people couldn't afford a doctors visit and early diagnosis was delayed, he said. 

A spokesman for Health Minister Tanya Plibersek said yesterday the government did not comment on budget rumours.

Medicare rebates are usually indexed for inflation on November 1, the same day the AMA issues its annual fee rise schedule for doctors.

On average AMA fees have risen by around 3 per cent in the last eight years and the Medicare rebate has increased by around 2 per cent.

Freezing the Medicare rebate at is current level of $36.30 is likely to leave patients of a non-bulk-billing doctor facing a gap payment of $36.09 from November 1 , $2.20 higher than the current gap.

Other areas the government could find health savings in the budget include generic medicines. 

The government has been paying chemists up to 80 per cent more than the market price for many generic medicines and economists have estimated it could save $1.8 billion a year if it rationalised the scheme.

A plan discussed between bureaucrats and medicine industry in the lead up to the budget would see all patients forced to use cheaper generic-brand medicines.

The Generic Medicines Industry Association, which is proposing the plan, also wants the patient charge for prescription medicine to be cut by 50 cents when patients choose the cheaper generic.

For pensioners the $5.90 co-payment for drugs supplied under the medicine subsidy scheme would fall to $5.50 under the proposal.

The $36.10 co-payment for general consumers would fall to $35.60. 

Medicines Australia which represents the pharmaceutical companies that make the brand name drugs has warned any such cuts would breach a memorandum of understanding it had with the government guaranteeing price certainty for medicines.   

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Ease in Cyprus fears lifts dollar slightly

THE Australian dollar is slightly higher after US shares rose amid optimism of a solution to the Cyprus financial crisis.

At 6.30am AEDT today, the local unit was trading at 103.83 US cents, up from 103.79 cents yesterday.

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Ease in Cyprus fears lifts dollar slightly

THE Australian dollar is slightly higher after US shares rose amid optimism of a solution to the Cyprus financial crisis.

At 6.30am AEDT today, the local unit was trading at 103.83 US cents, up from 103.79 cents yesterday.

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Europe stocks recoil on US stimulus fears

EUROPEAN stock markets have joined a global sell-off over concern about a possible end to US stimulus measures and as data showed slumping business activity across the eurozone, with London coming sharply off five-year highs.

Shares in banks led indices lower overnight, overshadowing upbeat company news across other sectors.

London's FTSE 100 index of leading companies fell 1.62 per cent to 6291.54 points, a day after surpassing 6400 for the first time in more than five years on the prospect of more cash stimulus from the Bank of England.

Meanwhile in Frankfurt the DAX 30 shed 1.88 per cent to 7583.57 points, while in Paris the CAC 40 dropped 2.29 per cent to 3624.80 points.

Milan dived 3.13 per cent to 16,010 points, also hit by concerns over the outcome of upcoming legislative elections in Italy, traders said.

"Following hints from the US that the Fed may scale back their asset purchase program sooner than expected, European stock markets sold off across the board today, with usual suspect Italy the biggest faller ahead of much anticipated weekend elections," said CMC Markets trader Alex Young.

With many having viewed European financial markets as being out of kilter with the real economic backdrop, he said the overnight realignment, also due to weaker than expected eurozone activity indicators, should not have come as a great shock.

Mr Young said investors "will now be pondering whether we are entering a necessary phase of correction on this equity bull run or whether this sell-off will gain traction in the weeks ahead".

The European single currency fell to $US1.3206 from $US1.3283 late in New York yesterday. The dollar dropped to 93.02 yen from 93.61 yen, while the British pound reached the lowest point for two-and-a-half years at $US1.5132, but then rallied to $US1.5258.

Gold prices struck a seven-month low point of $US1555.55 an ounce in Asian deals. They later stood at $US1577 on the London Bullion Market compared with $US1588.50 yesterday.

US stocks moved lower overnight, with the Dow Jones Industrial Average down 0.44 per cent to 13,866.70 points in midday trading.

The broad-based S&P 500 slipped 0.56 per cent to 1503.46 points, while the tech-rich Nasdaq Composite Index fell 0.82 per cent to 3138.61.

Asian stock markets suffered a heavy sell-off overnight, with Tokyo falling 1.39 per cent, Sydney sliding 2.33 per cent and Shanghai tumbling 2.97 per cent.

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EU on edge again with France debt fears

EUROPE releases its latest economic forecasts tomorrow - with a weak growth outlook likely to push France into overshooting EU budgetary targets and possibly triggering an intensification of the eurozone debt crisis.

After months in which the twin threat of government debt and recession appeared to be receding, recent data suggests the French economy will fail to rebound this year.

France's financial woes pose a pointed political problem as the EU strives to maintain momentum for tough economic reforms and balance painful austerity with anger over high and mounting unemployment.

The French economy has a gloomy outlook, going by a closely watched survey of private business activity released overnight, with purchasing managers suggesting a downward spiral sharper than at any time since March 2009.

The French government said this week that it will soon revise down its 2013 growth forecast, which will hinder its efforts to meet its EU obligations to cut its deficit.

More broadly, the latest feedback implies that the eurozone "is on course to contract for a fourth consecutive quarter in the first three months of the year", said the London-based Markit survey's boss Chris Williamson.

The French economy could be heading in the first quarter of 2013 for its worst performance in four years - putting pressure on Brussels to act, or explain leniency under EU rules tightened since the crisis first erupted in Greece.

The European Commission forecasts will show how far off the pace France and other countries are when it comes to an obligation to get public deficits back within the nominal EU limit of three per cent of gross domestic product (GDP) this year.

Within the eurozone, only Belgium, Italy, Austria and the Netherlands appear to be on the right track, said Amsterdam-based Carsten Brzeski of ING Bank in a note to investors.

Leaders across the EU are concerned about total unemployment of 26 million people, with the bloc's budget already tweaked to redirect billions towards reducing chronic youth unemployment in Spain and Greece especially.

The Group of 20 major world economies also now wants a softer approach to austerity cutbacks.

Street demonstrations and strikes remain a recurrent EU backdrop. About 50,000 people protested in Greece yesterday, and the EU capital of Brussels was also thronged by 30,000-40,000 demonstrators overnight angered by a salary freeze.

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Sonic shares dive amid earnings fears

SONIC Healthcare says it plans to cut costs across its Australian and US operations after warning its full year earnings will come in at the bottom end of earlier forecasts.

The pathology and radiology provider today reported a net profit of $150.6 million in the six months to December 31, up 5.4 per cent from $142.9 million in the previous corresponding period. Revenue rose 3.4 per cent to $1.7 billion, from $1.6 billion.

Last August, Sonic said it expected its full year earnings to rise by between five and 10 per cent in 2012/13 above the $624 million achieved in 2011/12. However, in its update today, the company said fee changes in Germany, fee cuts in the United States and impacts from Superstorm Sandy meant that its full year earnings would come in at the lower end of the guidance range.

The news prompted Sonic's shares to drop $1.125, or 8.01 per cent, to $12.925 at 1.40pm AEDT.

Chief executive Dr Colin Goldschmidt said that while Australia and Europe posted solid revenue growth, earnings from the US fell an unprecedented two per cent amid difficult trading conditions.

"Whilst our result at the moment, for the first time, is somewhat weaker in the US and it has impacted the whole result of Sonic, we certainly do not take a particular negative view about this," Dr Goldschmidt told analysts. "I'm confident that we will get through this in probably one or two reporting periods."

Dr Goldschmidt said Sonic already had launched a major cost reduction program across the US and had more unspecified cuts in the pipeline.

"As far as cost measures go in other countries, we've got a lot that we can still do in the US and a lot we can do in Australia," he said. "I'm not going into fine details of that ... but I can tell you it is quite significant and, depending on conditions, we will adjust our actions."

"We will be doing everything we can to reduce our costs in this low-revenue growth environment and I am confident our earnings will lift as we go forward."

Among the company's best-performers were its imaging and IPN medical centre divisions, where revenue jumped six per cent and 15 per cent, respectively. Kinetic Health, Sonic's occupational health provider and the largest in Australia, posted a 23 per cent rise in revenue, thanks to growing demand from resources companies.

Dr Goldschmidt said Sonic had no immediate plans for new local acquisitions after buying Healthscope (Western Australia) in October 2012, and would instead focus on potential acquisitions in Europe and the US.

"In Australia, I think the opportunities are probably almost done. The market is almost fully consolidated here," he said.

The chief executive would not comment on the possible outcome of a Federal Government review on the impact of industry deregulation on competition and rents due in April.

However, he said, Sonic was in a strong position to compete and win under the current conditions. Sonic lifted its partly-franked interim dividend by one cent to 25 cents a share.

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Sonic shares dive amid earnings fears

SONIC Healthcare says it plans to cut costs across its Australian and US operations after warning its full year earnings will come in at the bottom end of earlier forecasts.

The pathology and radiology provider today reported a net profit of $150.6 million in the six months to December 31, up 5.4 per cent from $142.9 million in the previous corresponding period. Revenue rose 3.4 per cent to $1.7 billion, from $1.6 billion.

Last August, Sonic said it expected its full year earnings to rise by between five and 10 per cent in 2012/13 above the $624 million achieved in 2011/12. However, in its update today, the company said fee changes in Germany, fee cuts in the United States and impacts from Superstorm Sandy meant that its full year earnings would come in at the lower end of the guidance range.

The news prompted Sonic's shares to drop $1.125, or 8.01 per cent, to $12.925 at 1.40pm AEDT.

Chief executive Dr Colin Goldschmidt said that while Australia and Europe posted solid revenue growth, earnings from the US fell an unprecedented two per cent amid difficult trading conditions.

"Whilst our result at the moment, for the first time, is somewhat weaker in the US and it has impacted the whole result of Sonic, we certainly do not take a particular negative view about this," Dr Goldschmidt told analysts. "I'm confident that we will get through this in probably one or two reporting periods."

Dr Goldschmidt said Sonic already had launched a major cost reduction program across the US and had more unspecified cuts in the pipeline.

"As far as cost measures go in other countries, we've got a lot that we can still do in the US and a lot we can do in Australia," he said. "I'm not going into fine details of that ... but I can tell you it is quite significant and, depending on conditions, we will adjust our actions."

"We will be doing everything we can to reduce our costs in this low-revenue growth environment and I am confident our earnings will lift as we go forward."

Among the company's best-performers were its imaging and IPN medical centre divisions, where revenue jumped six per cent and 15 per cent, respectively. Kinetic Health, Sonic's occupational health provider and the largest in Australia, posted a 23 per cent rise in revenue, thanks to growing demand from resources companies.

Dr Goldschmidt said Sonic had no immediate plans for new local acquisitions after buying Healthscope (Western Australia) in October 2012, and would instead focus on potential acquisitions in Europe and the US.

"In Australia, I think the opportunities are probably almost done. The market is almost fully consolidated here," he said.

The chief executive would not comment on the possible outcome of a Federal Government review on the impact of industry deregulation on competition and rents due in April.

However, he said, Sonic was in a strong position to compete and win under the current conditions. Sonic lifted its partly-franked interim dividend by one cent to 25 cents a share.

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