Roxon Says Australia to Save A$550 Million With Pathology Caps

Australia will save A$550 million ($581 million) under an agreement that will cap medical testing from companies such as Primary Health Care Ltd. (PRY) and Sonic Healthcare Ltd. (SHL), Health Minister Nicola Roxon said.

The government will limit annual rises at 5 percent in pathology from the current yearly average of 7.3 percent for the public health system, known as Medicare, Roxon said today. A Pathology Agreement Advisory committee will make sure the ceiling is adhered to, she said.

“This will help the sector to be prepared for the challenges of the future, including pressures from our aging population and increased rates of preventable disease,” Roxon said in an e-mailed statement.

Government spending on pathology has grown by an average of 7.3 percent a year since 1984 to A$2 billion, Roxon said. The A$550 million in savings apply to the five years from the July 1 start of the agreement.

To contact the reporter on this story: Gemma Daley in Canberra at gdaley@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net

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