Since the 1950s, being a provider to baby boomers has been the road to riches. Now, as baby boomers slowly wrinkle, the growth markets appear to be lifestyle, retirement, heath and – dare I say it – death.

Most people spend 90% of their lifetime health expenditure in the last five years of their life; so, as baby boomers age, it is hardly surprising that health care is a big mover.

The past decade has witnessed fundamental changes in the way Australians receive private (as opposed to public) health care. At least 75% of the delivery of diagnostic radiology and pathology services is now provided by large corporations. This trend has also involves general and specialist medical practices, hospitals, and wholesale and retail pharmacy. It’s now pretty much end to end and it’s getting harder to call it private.

Last year, we witnessed the on and off attempts by Sigma to acquire the troubled Australian Pharmaceutical Industries. API “lost” $17m during a computer upgrade. It then lost its CEO and CFO. The Sigma offer was made, raised, lowered and withdrawn. API shares have since slid.

But not everyone thinks it’s a dog. Cardiac Jolt, a company associated with colourful Sydney solicitor (is the attachment of the words colourful and Sydney to one’s name actionable?) Chris Murphy is increasing its stake in API to almost 7% of the company.

At the time of the Sigma offer, some suggested that Symbion Health, the third major player in the pharmacy sector, may be planning a bid. Now we learn that Symbion may itself be a target. Australia’s largest medical clinic operator Primary Health Care has just acquired a $131m parcel of Symbion stock, and may want more.

Symbion owns about 75 pathology laboratories, 50 medical practices and 120 x-ray centres. The industry and the share market call this rationalisation.

Does anyone else have a slight preference for health care delivered by physicians who had sworn the Hippocratic Oath, or the more modern Declaration of Geneva rather than Gordon Gekko?

Peter Fray

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Peter Fray
Editor-in-chief of Crikey