Friday, October 31, 2014
I spotted this report last week:
5:00 AM Wednesday Oct 22, 2014
Software developer ends speculation on IPO, but some possible investors worry it might set the bar too high.
The ink is barely dry on the announcement of Orion Health's up to $150 million sharemarket listing and fund managers are already talking down the offer's price - even though it is yet to be revealed.
After years of speculation, the Auckland developer of software systems used in hospitals yesterday confirmed it is aiming to float on the NZX and Australia's ASX late next month.
The company is looking to raise between $120 million and $150 million through its initial public offer, which will fund growth in key markets such as the United States.
An entity associated with chief executive Ian McCrae, who founded Orion in 1993 and remains the majority shareholder, is planning to sell $5 million of shares through the offer.
Valuations of up to $900 million have been bandied about for Orion, whose investors also include Milford Asset Management, Pioneer Capital and Sir Stephen Tindall's K1W1 fund.
Salt Funds Management managing director Paul Harrison said appetite for the listing would depend on the offer's pricing and the company's growth forecasts.
"I suspect the price expectations of the [Orion] vendors were set when companies like Xero were trading at $45 and the market was prepared to pay for blue sky and then some," Harrison said.
Shares in accounting software developer Xero have fallen from a record $45.99 in March to last night's close of $15.90 after a global sell-off of growth-focused stocks and recent market disappointment about the company's progress in the US.
Orion posted revenue of $153 million in its last financial year and is aiming for $1 billion in revenue by 2020.
There is an interesting Q&A that follows this:
While not an investment adviser it does strike me there are a few elements to be considered in this - remembering the very basic rule that the initial price you pay for an asset is what determines your profits over time. This means simply the lower the price the shares are issued at the more likely you are to do well.
Second there has been a bit of excitement around IT stocks in NZ. The poster child has been XRO (a web based accounting company that is yet to actually make a profit) which has gone from $1.0 to $45 and now back to $15 or so.
Third these are the people who bought us the user interface for the PCEHR.
Fourth there are major trends in e-Health funding and investment happening around the world which may mean Orion may be close to its peak right now.
Last many Health IT companies have had a difficult time over the last decade for one reason or another and the industry is rapidly evolving which can damage existing business models. It is also important to note that in the US market the commercial sustainability of Health Information Exchanges (which is some of the software Orion supply) is a seeming a little challenged.
So, in summary, all I am suggesting is to do your own careful research and do not pay too much for these shares if you decide to participate in the IPO. Caveat Emptor (Definition of caveat emptor -noun - the principle that the buyer alone is responsible for checking the quality and suitability of goods before a purchase is made.) as they say.
After having written this note I was spotted this follow-up article.
5:00 AM Wednesday Oct 29, 2014
Fund managers concerned by Orion’s unusual approach ahead of going to the market.
Fund managers have expressed concern over Orion Health's unusual decision to not provide earnings forecasts ahead of its highly anticipated initial public offer, which will raise up to $150 million in new growth capital.
The Auckland-based company, which develops IT systems used in hospitals, yesterday registered its prospectus and declared an indicative price range for its sharemarket listing of $4.30 to $5.70 per share, which would value the firm at between $720 million-$915 million.
IPO prospectuses usually contain detailed forecasts of future financial performance, but Orion decided not to include such information because of the inconsistent nature of its revenue.
Chief operating officer Graeme Wilson said the company's revenue came via large contracts and it was difficult to provide accurate forecasts "as to when contracts will land and not land".
Fellow Kiwi software developer Gentrack, which listed in June, was forced to downgrade its profit forecast just five weeks after the float because of delays with major customer contracts.
Salt Funds Management managing director Paul Harrison said the lack of prospectus forecasts - combined with the $14.8 million loss Orion has reported for the six months to September 30, up from a $4 million loss in the same period of last year - was "disconcerting". "It doesn't give investors much to go on, particularly in a business that you're expected to pay for growth opportunities."
However, Harrison reckoned investors would give Orion "the benefit of the doubt".
Another fund manager, who did not want to be named, said the lack of forecasts required a leap of faith by investors. "Personally, if I don't get forecasts I don't invest."
Seem others are not too sure either.
Posted by Dr David G More MB PhD at Friday, October 31, 2014
Thursday, October 30, 2014
Budget Night was on Tuesday 13th May, 2014 and the fuss has still not settled by a long shot.
It is amazing how the discussion on the GP Co-Payment just runs and runs. Some more this week.
Here are some of the more interesting articles I have spotted this 22nd week since it was released.
Clearly Ebola and the Government Response and the new Primary Health Networks got a lot of coverage and this continues.
The House of Reps returned a week or so ago and the Senate comes back 27th October so we will see how we go! I note rumblings about a much different approach to the Budget in 2015!
- The Australian
- October 21, 2014 12:00AM
AUSTRALIA must repair the federal budget and confront global risks, including falling commodity prices, according to a new alert from the Parliamentary Budget Office that sharpens the political fight over controversial savings.
PBO chief Phil Bowen told senators yesterday the nation needed “sensible budget management” to scale back annual deficits amid continuing risks to the government’s outlook.
But he warned that disputes in the upper house threatened to weigh down the budget by about $18 billion a year by 2024, undermining the government’s plan to deliver a surplus of about 1.4 per cent of gross domestic product in that year.
Although this week’s Senate estimates hearings make it impossible for the upper house to vote on budget bills this week, ministers are stepping up talks with crossbenchers on key savings in the hope of securing some changes before the end of the year.
Date October 22, 2014 - 5:30AM
Oh dear, what an embarrassment. Thank heavens so few journalists noticed. Last month one of the federal government's official beancounters, the Australian Institute of Health and Welfare, issued its report on total spending on health in 2012-13. It didn't exactly fit with what the government has been telling us.
As you recall, the minister for Health, Peter Dutton, got an early start this year, warning that health spending was growing "unsustainably". (Blame it all on Gough Whitlam, whose supposedly too expensive Medibank Malcolm Fraser dismantled, only to have Bob Hawke restore it as Medicare.)
The report of the Commission of Audit soon confirmed that health was prominent among the various classes of government spending growing - and projected to continue growing - "unsustainably".
Date October 23, 2014 - 12:15AM
One of the reasons that Australia urgently needed a change of government was that confidence was terrible under Labor, Coalition leaders liked to say before they won power.
It hasn't worked. Tony Abbott declared that Australia was "open for business." He and Joe Hockey offered a growth agenda. They promised to fix the budget deficit.
House prices have continued to rise strongly and, until a month ago, the sharemarket was on a strong uptrend too. Yet consumer confidence in Australia is stuck in a pessimism trap.
"Pessimists have outnumbered optimists for eight consecutive months," the Westpac Melbourne Institute consumer confidence index found in its October report.
Poll finds 72% believe cost of living has worsened, while two in three say electricity costs have risen
Daniel Hurst, political correspondent
Tuesday 21 October 2014 19.18 +11:00
Australians overwhelmingly believe that the cost of living, electricity bills and unemployment have increased in the past year, according to a new survey.
The Essential poll asked 1,801 people to consider a range of economic issues compared with the situation 12 months ago.
Demonstrating why cost of living remains a potent political issue, 72% of respondents said it had got worse in the past year, while only 6% said it was better.
By Colin Brinsden, AAP Economics Correspondent
October 24, 2014, 6:14 pm
The federal budget deficit is running nearly $2 billion smaller than anticipated at this stage of the financial year.
Prime Minister Tony Abbott says the government is getting the budget under control one "painful compromise" at a time.
Finance Minister Mathias Cormann released the government's monthly financial statement for September on Friday, which showed the underlying budget deficit at $19.16 billion.
The deficit had been expected to be $20.97 billion at this stage of the financial year.
$10bn in welfare changes and $10bn in savings stalled while ‘compromise’ offers put on the table
Lenore Taylor, political editor
Friday 24 October 2014 19.46 +11:00
The Abbott government’s “Operation Budget Repair” appears to have morphed into “Operation Let’s Salvage What The Hell We Can”.
The social security minister, Kevin Andrews, said this week he would consider “any reasonable offer” from crossbench senators in a last-ditch bid to get at least some of his $10bn in stalled welfare changes through the Senate.
And another $10bn or so of proposed savings or revenue raisings also remain on the Senate scrap heap, including the reindexation of fuel excise, the Medicare co-payment and the dramatic changes to higher education.
Medibank Private Sale.
20 October 2014, 5.07pm AEDT
Professor of Health Economics at University of Technology, Sydney
The IPO of Medibank Private is set to take place on November 25, and the indicative share price range in the prospectus released today suggests a market capitalisation of between A$4.3 billion and A$5.5 billion.
In public hands, Medibank has paid dividends of about A$450 million to the government over the past two years.
There are mixed opinions on whether the privatisation of Medibank will be largely positive or negative. However, from the point of view of Australian society overall, the privatisation is a good decision financially only if the revenue from the sale compensates for the loss of future returns.
Date October 21, 2014 - 1:14AM
Jessica Gardner and Georgia Wilkins
Retail investors will pay no more than $2 a share for a piece of Medibank Private when it floats in November.
The pricing was revealed alongside other key details of the federal government's $4 billion-plus sale of the health insurer released in a prospectus on Monday.
Finance Minister Mathias Cormann said the IPO would include a price cap of $2 a share for retail investors, even if the final price comes in above the indicative range of $1.55 to $2.
PUBLISHED: October 25, 2014
- Concern that policy could see private hospitals ‘cherry pick’ low-risk patients.
- Medibank argues rules aimed at minimising poor outcomes for patients.
Orthopaedic surgeon John Tuffley says Medibank Private is risking patient health and putting pressure on the public system by refusing to pay for what it argues are avoidable revisions of surgeries such as hip and knee replacements. Medibank has already struck a deal with private hospital group HealtheCare, which means the insurer does not have to pay if a surgery goes wrong and needs to be revised within 28 days of the original event.
The insurer’s managing director George Savvides has said the market leading insurer pays $100 million for revisions each year. Although he concedes that not all are avoidable, he wants to reduce that cost.
Date October 25, 2014 - 12:15AM
John Menadue still carries a sharp image in his head of the night in Melbourne, 47 years ago, when Medibank began crystallising as an idea for Labor.
It was a crisp July winter's evening in Kew, and gathered around a log fire at the home of left-leaning medico, Dr Moss Cass, were then opposition leader Gough Whitlam, Menadue (at that time Whitlam's aide), Cass and two health economists who'd become the architects of Australia's universal health care system, Dr John Deeble and Dick Scotton.
Deeble and Scotton had been researching ways to make health insurance - then voluntary and fragmented - more readily available and affordable to the great mass of Australians.
- October 25, 2014 12:00AM
- Sue Dunlevy National Health Reporter
- News Corp Australia Network
EXCLUSIVE: If you want obesity surgery, neurosurgery, cardiac surgery or a hip replacement you’re now likely to have to buy top private health cover, as insurers introduce a de facto risk rating system.
Patients who want comprehensive health cover now have to pay thousands of dollars more than they did in the past — or use the public system.
Australia’s private insurance is meant to be community rated, and no matter how sick you are you pay the same premium as a healthy person.
However, doctors say that by shaving some key procedures from cheaper policies, insurers are sneaking in a risk-rated system where your premium is determined by your health status.
- Simon Benson
- The Daily Telegraph
- October 20, 2014 12:00AM
PRIME Minister Tony Abbott has raised concerns about the potential spread of ebola to our region with the Papua New Guinea government, insisting that countries in the region be prepared for the killer virus.
The PM stopped in PNG on his way to Jakarta yesterday for the inauguration of Indonesian President Joko Widodo.
According to senior government sources, Mr Abbott met PNG Prime Minister Peter O’Neill to discuss “the global response to ebola and the importance of preparedness in the region”.
- The Australian
- October 22, 2014 10:19AM
AUSTRALIAN medical teams lack specialist training to manage an Ebola epidemic in our region, despite government claims it could “rapidly deploy forces” to a neighbouring country if requested.
The revelations that Australian Medical Assistance Teams were not being provided the training, which can take weeks, came as a leading public health expert said there was a “quite high” risk of isolated Ebola outbreaks in Australia, although such cases would be managed “very well”.
The Abbott government has resisted opposition calls to deploy medical personnel to combat the West African epidemic, warning of the difficulties in evacuating Australians infected with the virus.
22nd Oct 2014 3:20 PM
AUSTRALIA may not be ready to fully respond to an Ebola outbreak in our wider region, and it could be more than two weeks before all the response teams are prepared, a Senate Estimates hearing has heard.
The information from the nation's chief medical officer comes only days after he said state and territory health authorities were ready for an Ebola outbreak.
Professor Chris Baggoley told the hearing on Wednesday the rapid-response Australian Medical Assistance Teams had not received the right training.
Date October 24, 2014 - 6:00PM
Matthew Knott, Latika Bourke, Lisa Visentin
Sick of the government's talks on Ebola: AMA president Brian Owler. Photo: Andrew Meares
The peak medical body has accused the Abbott government of acting too slowly to tackle the Ebola crisis because of concerns about the political consequences of an Australian health worker being infected with the disease.
Government sources played down reports that Australia would be sending up to 16 health workers to west Africa as early as next week to fight the outbreak, but said negotiations with Britain to provide medical assistance were advancing.
It was confirmed on Friday that a doctor in New York had tested positive for the virus – the city's first diagnosed case.
Date October 25, 2014 - 4:55PM
Australia's response to Ebola has been a shambles, says the head of the country's medical association who's calling on the government to develop and announce a plan to help deal with the crisis.
Apparently 16 health care workers have been trained to go to west Africa and do "dangerous work" with Ebola patients, Australian Medical Association president Associate Professor Brian Owler said.
But neither the AMA nor the Chief Medical Officer know who the people are, what sort of training they've had and whether they're properly prepared.
"It's not the AUSMAT (Australian Medical Assistance) teams that you would expect would be trained to do this work," Professor Owler told reporters in Sydney.
GP co-payment could strip benefit of Base Hospital upgrade
Hamish Broome | 21st Oct 2014 5:00 AM
LISMORE Base Hospital's $80 million new emergency department will be twice as big as the present ED, but it will struggle to cope with the impact of the federal government's proposed $15 GP co-payment, according to a local nurse.
It's widely predicted that people with chronic disease, the elderly and others struggling to make ends meet are likely to visit hospital instead of seeing their GP because of the payment, which will charge $15 per GP visit, and $7.50 for concession card holders.
Now, figures from the a briefing prepared for NSW Premier Mike Baird (just released by NSW Labor) have put more science into that sentiment, predicting the co-payment will push up emergency department visits across NSW by 27%.
Emergency arrivals to jump under co-payment: Labor
By Jacqueline Breen
Posted Thu at 10:21amThu 23 Oct 2014, 10:21am
The Labor candidate for the far west says the proposed GP co-payment would flood Broken Hill hospital's emergency department with an extra 5000 patients a year.
Labor says New South Wales Health modelling predicts that the Coalition's proposed $7 co-payment, if introduced, would result in a 27 per cent increase in the number of patients presenting to emergency rooms across the state.
At Broken Hill that's an estimated additional 5116 admissions each year.
The Labor candidate for Barwon, Craig Ashby, says the tax will see more people clogging up hospitals, and some leaving health checks too late.
Opinion: Minute by minute, we are losing a little of that human touch
- Belinda Seeney
- The Sunday Mail (Qld)
- October 26, 2014 12:00AM
BRUCE Springsteen nailed it when he sang, “I just want someone to talk to, and a little of that human touch.”
For the most part, we’re looking for someone to listen to us, to hear what we’re saying and to validate us. We just want to connect.
During a check-up this year, my family doctor lamented the human touch was waning in general practice.
He started the consultation by warmly greeting me, then asking about my family and work, talking about his own children and their recent achievements.
- October 25, 2014 10:00PM
- Sue Dunlevy, National Health Reporter
- News Corp Australia Network
RURAL towns will have better chances of recruiting doctors under major changes to an unfair and controversial government incentive system.
Assistant Minister for Health Fiona Nash, who has championed the need to improve access to health services for people living in rural areas. is expected to announce the changes soon.
The outcome is a major victory for The Sunday Telegraph, which has been campaigning to improve the poor health systems in the bush that see country residents die up to three years earlier than city people.
Pharmacy Related Articles.
20 October, 2014 Christie Moffat
The Pharmacy Guild of Australia has officially launched a new consumer campaign, featuring a series of online and television advertisements.
The multi-media campaign is part of the Guild’s bid to advance community knowledge of the value of local pharmacies.
On Sunday night, an animated television advertisement was first aired across Australia, and will continue for the next six weeks. It will then be shown again early next year, until the end of February.
You can view the animated commercial embedded below, or on YouTube.
Even doctors taking part in a pharmacy skin cancer check service have doubts about its accuracy and efficacy, a senior AMA official claims.
As previously reported, AMA NSW president Dr Saxon Smith publically criticised the ‘Spotcheck’ service offered by Guardian, Amcal and Chemmart pharmacies, and said they were not suitable locations for identifying skin cancers.
The screening service involves pharmacy staff photographing a spot, with the images then forwarded to doctors working at Sunspot skin cancer clinics for further analysis.
Responding further on the Pharmacy News website, Dr Smith said the concerns he voiced about the service were raised purely because of the potential for missed, inaccurate or wrong diagnoses.
- The Australian
- October 24, 2014 12:00AM
THE federal government is targeting the last great bastion of health bureaucracy, launching a review of the “thicket” of red tape around the drugs and medical devices available to Australians.
With the cost-cutting proposals of its first budget still subject to political negotiations, the government has seized the opportunity to examine whether the Therapeutic Goods Administration should be allowed to fast-track approvals or reduce the regulatory burden on manufacturers.
Former Pharmaceutical Benefits Advisory Committee chairman Lloyd Sansom will spearhead a review, supported by former chief medical officer John Horvath and former Medicines Australia chairman Will Delaat.
The policy group behind the recent Competition Policy Review, which advocated deregulation of pharmacy ownership and location rules, has been advised to rein in its free market agenda.
As revealed in The Australian, a string of speakers at a specialist conference advised caution on implementing many of the review’s recommendations in the health and education spheres.
The review team, led by Professor Ian Harper, had proposed greatly increased competition in health delivery to boost national productivity in its draft report.
By LISA WACHSMUTH and ADAM WRIGHT
Oct. 19, 2014, 3:17 p.m.
ILLAWARRA Shoalhaven Medicare Local and its staff face an uncertain future as the state’s 17 Medicare Locals are replaced by nine Primary Health Networks.
However Illawarra Shoalhaven Medicare Local (ISML) chief executive officer Dianne Kitcher said she did not expect any negative impact on headspace in Nowra or plans for the GP Super Clinic.
“Headspace and the GP Super Clinic are both funded differently and separately to Medicare Local,” she said.
“Our company name is Grand Pacific Health and we do other things besides Medicare Local. All those other activities will continue,” Ms Kitcher said.
By BLAIR THOMSON
Oct. 21, 2014, midnight
THE federal government is unlikely to change healthcare boundaries which divide Albury and Wodonga along state lines despite opposition to the plan.
The government released a plan on Wednesday outlining new primary healthcare regions.
Albury and Wodonga are divided into separate districts, raising concerns for the delivery of primary healthcare services like physiotherapy, occupational therapy and mental health on the Border.
Member for Indi Cathy McGowan asked Health Minister Peter Dutton during question time in Parliament yesterday if he had considered realigning local boundaries to retain cross-border agreements.
17 October, 2014 Tessa Hoffman
Corporate giant Primary Health Care has indicated its willingness to go into battle to defend its name once again.
Federal Government reforms will dismantle the nation's 61 Medicare Locals, which will be replaced by 30 new Primary Health Networks by next July.
But Primary, an ASX-listed company with 87 medical centres, is unhappy with the government's choice of the words "Primary Health", which it believes could confuse the public's perception of its 25-year-old brand.
By NIGEL MCNAY
Oct. 25, 2014, midnight
A BATTLE to keep Albury and Wodonga in the same primary healthcare region will be taken to Canberra next week.
Indi MP Cathy McGowan is pushing for a meeting between the Hume Medicare Local board and Health Minister Peter Dutton.
Hume Medicare Local is funded only until mid-next year.
After then, it and other Medicare Locals across Australia will be replaced by what the government has dubbed Primary Health Networks.
I also have to say reading all the articles I still have no idea what is actually going to happen with the Budget at the end of the day. Maybe the next few weeks of parliament will clarify things this time but I doubt it.
To remind readers there is also a great deal of useful health discussion here from The Conversation.
Also a huge section on the overall budget found here:
Posted by Dr David G More MB PhD at Thursday, October 30, 2014