Green Cross Health chairman Peter Merton

The healthcare group, which used to be known as PharmacyBrands, has transformed itself into broader medical services provider with the acquisitions of community healthcare and support business Access Homehealth, medical centre firm Peak Primary, and nursing and healthcare service company Total Health Care.

Chairman Peter Merton told shareholders at yesterday’s annual meeting that Green Cross would look to “build the scope” of the primary healthcare services it offers, and could offer a home-based model for private patients in “the golden years.”

“Our community health business is the connection directly to the client in their home and can provide the link between medical care and social care,” Merton said. “We see opportunities in this sector that include straight volume growth, through to developing packages of care that may be more applicable to the private payor.”

Mr Merton said Green Cross wants to offer the government cost-effective solutions for home-based care but there need to be improved funding systems “with the incentives aligned to the outcomes that are required” for that to happen.

Community health funding is one of the major challenges Green Cross faces, Mr Merton said, as publicity on the issue is “fairly intense” and it is an expensive situation. The company wants the sector to be more highly skilled and highly paid, and its own restructuring has been done with this in mind, he said.

Green Cross is also concerned about the potential deregulation of the pharmacy industry. A new regulatory regime for therapeutic products, which is still being drafted, will replace the Medicines Act 1981, with consultation scheduled later this year.

A regulatory impact statement released in March recommended current restrictions restricting pharmacy licences to physical premises should be removed, allowing pharmacies to be provided in a patient’s home, a rest home or through a mobile pharmacy.

Mr Merton said the company was investing considerable time on the issue.

“Until we know a few more key details, it is difficult to determine the position Green Cross Health will take,” Mr Merton said. “The key concern is whether there is a patient benefit, and possibly an economic benefit without compromising primary healthcare delivery.”

In May, Green Cross reported an 18% increase in annual profit to $17 million. The company’s pharmacy retail chain continued to make the biggest contribution, accounting for two-thirds of the $447.7 million in annual revenue, which was up 39% from a year earlier. Green Cross either owns or licenses 338 pharmacies and services 47 medical centres, some of which are independently owned.

Mr Merton said the company’s balance sheet had been changed significantly by its recent acquisitions and the 15c special dividend it paid in July last year, but the company has been paying down debt and believes contributions from those acquisitions will begin to flow in this financial year.

The shares fell 1.1% to $2.69, having gained 6.3% so far this year.

(NBR BusinessDesk)