Overall, Australia remains an attractive healthcare market. An ageing population that will continue to need more tests and treatments will underpin demand for healthcare services well into the future.

However, the aged care royal commission is still a major overhang on providers like Regis Healthcare, Japara Healthcare and Estia Health.

Yarra Capital’s head of small caps Katie Hudson agrees it’s the most benign pricing environment for pathology and radiology in the past decade.

“Indexation is coming in for radiology for the first time in 10 years, and we are seeing more rational competitive behaviour in the pathology market so that’s supportive for those services players [like Integral, Sonic and Healius],” she says.

Read more…. (subscription to The Australian Financial Review required)