Sonic hit by government cuts

Sonic Healthcare's share price has been hit by proposed cuts to Medicare's pathology budget.

The Government recently announced its Mid-Year Economic and Fiscal Outlook, which included various Medicare fee cuts to lab and imaging services. The share price of Australia’s largest pathology provider, Sonic Healthcare, promptly dropped 10%.

Sonic estimates the changes might cause a $50m a year drop in revenue and reduce 2017’s earnings before interest, tax, depreciation and amortisation (EBITDA) by 5–6%.

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