Medibank builds business through downturn
Medibank has experienced one of its most dynamic periods of change over the past financial year, bringing together Australian Health Management (ahm) and Health Services Australia (HSA Group) under the Medibank umbrella, lifting revenue to $3.9 billion, and achieving a strong operating result of $148 million (including the net Health Services result). The revenue impact of the two acquisitions over a full year is equivalent to $600 million.
Medibank reported a solid profit before tax of $93.8m, inclusive of the impact of a 2.7 percent return loss on its investments. Despite the negative return, the group still managed to grow its net assets by $110 million to $1.44 billion.
Medibank's 15 percent rise in revenue, produced by organic growth combined with the acquisition of ahm in the second half of FY09, enabled Medibank to absorb the strong increase in benefit outlays claimed by members which has now risen to $3.4 billion. Underlying growth in benefit outlays is over 7 percent.
Managing Director, George Savvides, highlighted the impressive performance of Medibank's businesses under difficult economic and competitive industry pressures.
"We are now paying out $68 million per week in benefits on behalf of our growing membership - it's a huge contribution to the Australian Health system, but one we are well resourced to make. Although the growth in Private Health Insurance membership in the past year has slowed we continue to grow our membership. Our prudent financial management and lower than industry average premium changes have enabled us to remain strong despite the reduction in profit margin, which is consistent with industry trends. We have also increased our focus on reducing our operating cost to revenue, which is now under 10 percent.
"It has been an exciting year having successfully integrated ahm and HSA under the Medibank banner to create a national integrated health solutions and insurance group. Medibank is not only weathering the challenges of the economic downturn and industry changes, we have used this time to substantially expand the capability of our business to assist members with chronic disease and we are now in a strong position to take advantage of opportunities that may arise from the health reform process.
"Medibank now employs almost 1,000 health professionals and we are expanding our health management and health coaching programs not only for our members but the broader population as well," Mr Savvides said.
Medibank has maintained national marketshare leadership at the end of the year, with a slight increase to 31.6 percent of all private health insurance memberships.
Medibank's Chairman, Paul McClintock, is pleased with the growth in the private health insurance businesses and the steps Medibank is taking in the broader preventative health care space.
"We now provide private health insurance to over 3.7 million people. To achieve this profitably in tough economic times is an excellent result and one that reflects the value our customers place on our product and service offering," Mr McClintock said.
"The 2009 financial year also held significant milestones for Medibank in moving from predominantly a payer of health insurance claims to an organisation with the capability to positively influence the health status of our customers."
Mr McClintock also commented that the organisation's financial results were strong despite the drop in investment income, noting that total assets grew by $269 million to $2.56 billion.
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