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Ramsay Health Care share price lower on COVID-19 update

The Ramsay Health Care Limited (ASX: RHC) share price is trading lower on Wednesday after the release of an announcement.

The private hospital operator’s shares are currently down 3.5% to $57.60.

What did Ramsay announce?

Ramsay has followed the lead of many other companies and announced that it is withdrawing its earnings guidance for FY 2020.

This follows the ongoing high level of uncertainty surrounding the spread, duration, and impact of the coronavirus, and as Ramsay’s hospitals around the globe move to assist governments with managing the virus.

How has Ramsay been impacted?

Ramsay’s managing director, Craig McNally, explained: “While we face the unknown in terms of the extent of the impact of COVID-19, it is vital that all health providers work together during this time to deliver the best care and treatment to patients within our communities.”

“The rapid spread of COVID-19 in Europe has resulted in decisions to defer surgery in some regions as governments seek extraordinary support from private operators such as Ramsay to deal with capacity requirements. Specific details of the extent of this support including volume, casemix and reimbursement are still being finalised,” he added.

In France, the company notes that the government has cancelled all non-urgent surgery and Ramsay’s hospitals are providing much needed capacity and services.

Whereas in the United Kingdom, elective surgeries are continuing, but the company is in discussions with the NHS to provide services and capacity to help deal with the impact of the coronavirus.

In Australia, the company advised that it is still too early to determine the full impact.

In relation to its Australian hospitals, Mr McNally explained: “As the number of COVID-19 cases continues to escalate, we will see an impact on private volumes for the short term. However, in some cases, we are seeing decisions to fast-track elective surgery in order to minimise any future potential disruption.”

The company advised that its Australian hospitals are willing to assist the public health sector ease the surgical burden on the public health system. It will undertake urgent and elective surgery, as well as provide capacity to cater for COVID-19 patients if required.

“Ramsay and our facilities right across the world are ready and willing to assist at this time of crisis. Our hospitals are well-prepared to manage the impacts of COVID-19. We have strict infection control and prevention protocols in place to protect our staff and healthcare workers. These measures are enabling us to continue to provide world-class care and treatment to patients,” McNally concluded.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Ramsay Health Care Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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