Caring nature translated to profit

Ramsay Health Care is a fantastically profitable blue chip Australian company with enviable prospects — well capable of paying its employees fairly and staffing its hospitals appropriately.

In a recent interview, respected financial commentator Alan Kohler introduced Ramsay CEO Chris Rex with a glowing appraisal of the company’s economic performance in the past decade:

“Ramsay has been a wonderful investment for those willing to stick with it over the past 10 years – compound annual growth rate of 24 per cent, since you took over a few years ago, 27 per cent, and since 2012 the stock has tripled. A fantastic performance. And now you are the biggest private hospital operator in France,” he said.

Ramsay recently became the largest private health provider in France when it purchased Générale de Santé with its 115 facilities and 15 per cent of that market.

Chris Rex told Kohler there were four pillars to Ramsay’s impressive growth and its rosy future prospects:

  1. “What has driven growth over the past 10 years will drive growth over the next 10, 20 even 30 years. It is really the demographic change that is taking place in most countries around the world. The so-called baby boomers [will] pass through their health care demanding years over the next 30 years or so. There is an inexorable demand curve that goes up every year.”
  2. “Reinvesting – in Australia alone we are spending around $200 million a year adding to capacity, adding operating theatres, adding beds, adding various consulting suites, whatever, in order to facilitate that organic growth.”
  3. “The developing economies [around the world] largely have publically paid and publically provided health care services. They are starting to look at their ability to maintain that kind of system given the demands that the ageing population will bring and are increasingly looking to get the private sector to be more and more involved and that again is certainly what we have taken advantage of – not taken advantage of, that’s not the correct word – but being involved in an increasing way over the past 10 years or so and I see that inevitably growing over the next 10 or 20 years.”
  4. “And the final part is acquisitions. Over the past 10 or 15 years we’ve made a number of, hopefully, successful acquisitions. We’ve just made another large one in the past couple of months. I can see us continuing to acquire other businesses, not just in our existing markets but, as I described before, hopefully in new markets over the next 10 years or so as well.

People caring for people

Chris Rex says that central to the company’s success is a corporate philosophy – the Ramsay Way – “which I think captures the drive, the enthusiasm and also the caring nature of the people who work in the health care sector. That has been the backbone of not just what we’ve done but also how we’ve done it.”

He went on to describe this philosophy as “about doing the right thing. Our motto, if you like, is ‘people caring for people’. We care for patients obviously and it’s incredibly important for a healthcare business to be obsessive about maintaining high quality care for patients, but equally we care for our people, the people who make this company great.

“When people actually see managers within the organisation, board members or the chairman clearly exhibit those behavioural traits, everybody sees a company they believe as having the same values as those working at the bedside or any other part of the hospital. It’s a very dynamic process but one that requires a lot of human interaction to believe in the things that we espouse.”


A highly profitable company

  • Ramsay Health Care runs 69 private hospitals and more than 80 day surgery facilities in Australia.
  • The company posted a net profit of $303.7 million in the financial year just ended, a 14% increase on the previous year.
  • Revenue for the same period was $4.91 billion, a 17.6 % increase on the previous year.
  • Ramsay’s Australian and Asian business grew by 10.5%.
  • Ramsay forecasts profit growth of between 14% and 16% in the next financial year.

A global behemoth in private health

  • Ramsay Health Care operates 151 hospitals and day surgery facilities across Australia, the UK, France and Asia.
  • With its recent French acquisition Ramsay became one of the top five private hospital operators in the world.
  • Ramsay has just bought France’s leading private healthcare company, Générale de Santé, with 75 centres and 19,000 employees. The French arm has annual revenue of 1.7 billion euros ($A2.46 billion).