Healthscope shares are tumbling

The Great Ormond Street Hospital scene in the opening ceremony of the London 2012 Olympic Games. Christophe Simon/AFP/GettyImages

Shares in Healthscope fell hard after the private hospital operator issued an earnings alert.

A short time ago, the shares were down 18% to $2.405.

“The company has experienced slower than expected revenue growth in hospitals in the first quarter,” Healthscope said in its September quarter update presented to its annual general meeting.

Robert Cooke, Healthscope’s managing director, says there’s been a heightened level of public commentary on healthcare affordability and consumer confidence in private health insurance in Australia.

“Various data points across the industry tell us that the average rate of hospital volume growth generally has slowed,” he says.

“We have seen this impact a number of our hospitals resulting in increased variability in volumes and case mix month to month in the first quarter and particularly in September.”

He says earnings growth for the company’s hospitals division would be flat year-on-year if the trend for the first quarter continues.

Healthscope, which operates 45 hospitals and has 18,000 staff, in August reported an 18.9% rise in full year profit to $182.8 million. Revenue grew 6.2% to $2.291 billion.