Australians are choosing to spend more on their health, and Australian health practices are reporting positive business conditions in the past six months, according to two new reports on Australia’s health services sector released by NAB Health and Medfin today.
Based on transactions made through NAB’s health claims and payment processing system, HICAPS, the NAB Health Consumption Indicator (NHCI) grew nationally by 3.4%, year-on-year in the September quarter 2016.
According to NAB’s Chief Economist Alan Oster, the data provides a unique insight into Australian household spending for patient care services such as speech pathologists, optometrists and physiotherapists.
“Health spending has historically outpaced growth in the broader economy and is generally in-line with wider measures of health spend,” Mr Oster said.
“Given around a third of all health spending comes from non-government private consumption, the scale of this data is exciting and tells us which types of health services are outperforming in terms of consumer spend, and even which regions are experiencing stronger growth than others”.
“This quarterly Indicator will help provide insights for both customers and practitioners alike,” Mr Oster said.
The positive outlook for the healthcare sector is supported by NAB’s Health Practitioner Survey which reveals positive business conditions (+38) in the past six months, led by strong sales, profits and staffing levels.
Capturing data from GPs, dental and other practitioners, business confidence has been very strong among healthcare practitioners (+54) and is significantly higher than other sectors when compared to the broader economy (+1).[i]
Commenting on the results, Cameron Fuller, NAB Executive General Manager Specialised Banking, said: “the services sector is critical to Australia’s future economic prosperity and it’s uplifting to see healthcare practitioners are feeling confident towards the future of their practices.
“Strong demand in the past six months has helped to build industry confidence, and we expect to see these areas continue to grow amongst health practices in the year ahead,” Mr Fuller said.
Patient recommendations were identified by health practitioners as the most significant driver for growth, followed by an increased demand driven by the growing local population, and opportunities presented from online marketing.
Overall, respondents believed there were no ‘significant’ impediments to growing their futures; however, some practitioners are more worried than others. While all other practitioners rated government policy as a ‘minor’ constraint, GPs viewed this as ‘significant’.
“Increasing business costs will continue to be a challenge for health practitioners as they navigate the market and the burden of changing regulations. We’re expecting to see higher service charges which indicate that profit margins may erode,” Mr Fuller said.
“Our specialist NAB Health bankers understand these industry issues and opportunities and we are focused on partnering with our clients to help them grow their businesses or safeguard their businesses against challenges,” said Mr Fuller.
About the NAB Health Consumption Indicator (NHCI)
The NAB Health Consumption Indicator (NHCI) is a new measure of consumer spend on health services based on private household expenditure of practitioners that have a direct patient care role (such as speech pathologists, optometrists, physiotherapist and dentists). It excludes GP’s, hospitals and pharmacies and does not include in-patient care or associated professionals such as nursing. NAB Health practitioners spend estimate is based on spend at HICAPS terminals.
About the NAB/Medfin Health Practitioner Survey
The NAB/Medfin Health Practitioner Survey is based on the responses of over 72 health practitioners across a broad range of services to discuss the changing business landscape in healthcare – including GPs, dental and other practitioners (e.g. hospitals, specialist medical, optometry and physiotherapy). The research aims to provide insights into the business landscape for healthcare practitioners, as well as their attitudes and business outlook for the next six months.
About NAB Health
NAB Health is a group of specialised brands (Nab Health, Medfin and HICAPS), financial solutions and dedicated health bankers who partner with healthcare providers to manage challenges and opportunities in the healthcare sector. The NAB Health Digital Hub offers advice and service to practitioners, from buying a practice, running a business, investing, insurance, super and tax requirements to selling a business: www.nab.com.au/health
[i] 2016, National Australia Bank, NAB Q2 Quarterly Business Survey, http://business.nab.com.au/nab-quarterly-business-survey-june-quarter-2016-17763/.