Pathology Services in Australia Industry Market Research Report Now Updated by IBISWorld

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The ageing population and an increase in the prevalence of chronic illness are promoting demand for pathology services. For this reason, industry research firm IBISWorld has updated its report on the Pathology Services industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

A decline in average revenue per service is expected to partly offset moderarte revenue growth

The Pathology Services industry provides vital information that helps doctors to diagnose and manage a number of diseases. According to IBISWorld industry analyst Arna Richardson, “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 derives the vast majority of its revenue from providing pathology services under Medicare. The industry is expected to grow by 2.9% in 2014-15, to reach $2.8 billion. Medicare is expected to record more than 118.0 million pathology services in 2014-15, up from 93.0 million services in 2009-10, suggesting strong volume growth over the past five years. The average Medicare rebate is projected to equal just $20.00 per service. Over the five years through 2014-15, industry revenue is expected to grow modestly by an annualised 2.4%, reflecting the impact of an increase in pathology services. However, a decline in average revenue per service is expected to partly offset this. 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.

One of the key variables currently shaping the industry's performance is the five-year Pathology Funding Agreement signed by the Commonwealth Government and key stakeholders in April 2011. This commenced in 2011-12, providing just under 5.0% yearly nominal growth in industry-wide pathology funding expenditure over a five-year term. “Underpinning the industry's performance over the first part of the next five years will be the Pathology Funding Agreement,” says Richardson. Following a 1.1% funding adjustment in January 2013, it remains to be seen whether any further funding cuts will be triggered over the remainder of the agreement. Continued volume growth will drive industry revenue growth, boosted by advances in medical technology and a greater reliance on pathology testing for early detection and prevention.

The top four players in the Pathology Services industry currently account for a majority of industry revenue, indicating a particularly high concentration of ownership, although the degree of concentration varies by geographic region. The industry is expected to become more concentrated until the Australian Consumer and Competition Commission (ACCC) prevents major incumbents from any further acquisitions. Both of the two largest players have undertaken a number of acquisitions over the past five years, including Sonic's 2012 purchase of Healthscope's Western Australian pathology business.

For more information, visit IBISWorld’s Pathology Services industry in Australia report page.

Companies in this industry operate pathology laboratories and collection centres. Pathology services provided by public laboratories operating within general hospitals are excluded.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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