Australia’s ageing population is helping drive demand for industry services.
Melbourne, Australia (PRWEB) January 16, 2014
The Pathology Services industry provides vital information that helps doctors to diagnose and manage a number of diseases. IBISWorld industry analyst Arna Richardson states, “The ageing population and an increase in the prevalence of chronic illness are factors promoting demand for health services and referrals for pathology services.” The industry is expected to generate revenue from providing pathology services under Medicare amounting to $2.7 billion in 2013-14, representing growth of 3.1% on the previous year. Medicare is expected to record in excess of 126 million pathology services in 2013-14, up from 100 million services in 2008-09, suggesting strong volume growth over the past five years. Medicare rebates on average are forecast to equate to just under $20 per service. However, reported services include patient episode initiation items, which are additional to actual tests performed. Therefore, actual revenue per test item is higher than this figure.
Over the five years through 2013-14, industry revenue is projected to display modest cyclical growth by an annualised 2.9%, reflecting the impact of an increase in the number of pathology services but partly offset by a decline in average revenue per service. Strong growth in the number of services is mainly due to growth in the use of medical services, and an increase in the average number of pathology tests per medical service. According to Richardson, “one of the key variables currently shaping the performance of the industry is the five-year Pathology Funding Agreement signed by the Commonwealth Government and key stakeholders in May 2011.” This commenced in 2011-12, providing for just under 5.0% yearly nominal growth in industry-wide pathology funding outlays over a five-year term.
The Pathology Services industry is highly concentrated, with the four largest players contributing a substantial proportion of industry revenue in 2013-14. The four largest industry operators are Sonic Healthcare, Primary Health Care, Healthscope and St John of God Health Care. The industry is expected to become more concentrated until the ACCC prevents major incumbents from any further acquisitions. Both of the two largest players have undertaken a number of acquisitions in the five years through 2013-14 including Sonic's 2012 purchase of Healthscope's Western Australian pathology business. For more information, visit IBISWorld’s Pathology Services report in Australia industry page.
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IBISWorld industry Report Key Topics
Companies in this industry operate pathology laboratories and collection centres.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Technology & Systems
Regulation & Policy
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