Ramsay Health Care: how one Paw Paw Ointment fortune built a hospital empire

Ramsay Health Care now runs well over 500 facilities across eleven countries, employs tens of thousands of clinicians and support staff, and turns over the better part of $15 billion a year. It started with one psychiatric hospital in Sydney's northern suburbs and a bloke who'd made his early money selling Paw Paw Ointment. I've spent a fair bit of time this year going back through the company's annual reports trying to work out what actually explains the scale of it, because the standard version — "visionary founder builds empire" — is true but not especially useful. The useful version is in the balance sheet discipline, and in a decision to keep buying hospitals long after most Australian companies would have called it a career.

The focus keyword here, if you're the sort of reader who cares about such things, is Ramsay Health Care history. But the real story is about patience, and about a founder who apparently disliked debt almost as much as he disliked selling assets.

From Paw Paw Ointment to a single Sydney hospital

Paul Ramsay's first fortune came from the family business, Ramsay Pharmaceuticals, which among other things sold that ubiquitous Paw Paw Ointment you'll still find in every Australian bathroom cabinet and servo counter. That gave him capital. What he did with it, from the mid-1960s, was buy a psychiatric hospital in Sydney. Not glamorous. Not the kind of asset that gets written up in the business pages. But psychiatric care, like most healthcare, has a demand curve that doesn't care much about the economic cycle, and Ramsay understood that better than most of his contemporaries chasing property or mining in the boom years.

The company that became Ramsay Health Care grew slowly through the 1970s and 80s, adding private hospitals one at a time, mostly in New South Wales and Queensland. It listed on the ASX in 1997, by which point it already had the operating model that would carry it internationally: buy or build hospitals, run them efficiently, plough the cash flow back into more hospitals. No flashy diversification into unrelated sectors, no attempt to become a health insurer or a pharmacy chain at scale. Just more beds, more theatres, more day surgery units.

Why private hospitals are a genuinely good business

I'll admit I underestimated this sector for years, on the assumption that anything touching Australian healthcare must be strangled by red tape and government pricing. It's more nuanced than that. Private hospitals sit alongside Medicare and the private health insurance system rather than competing directly with the public system, and the regulatory framework — state health department licensing, the private health insurance rebate settings, hospital accreditation standards — creates a fairly high barrier to entry. You can't just open a hospital next to Ramsay's and expect referring specialists and insurers to switch overnight.

That barrier is Ramsay's moat, and it's a wide one. Specialists build careers around operating theatre lists at particular hospitals. Health funds negotiate multi-year contracts. Patients, understandably, don't shop around for a hip replacement the way they'd shop around for a mattress. Once a hospital group has scale in a region, it tends to keep it, and Ramsay had scale in more Australian regions than anyone else by the late 1990s.

The Ramsay Générale de Santé move into France

The pivot that turned Ramsay from a large domestic operator into a genuine global player was the 2004 tie-up with Générale de Santé, then France's largest private hospital operator. It gave Ramsay a foothold in the French healthcare market, which runs on a different funding model to Australia's but rewards the same operational disciplines: theatre utilisation, length-of-stay management, procurement scale. Ramsay eventually built this into a controlling position and, over the following two decades, expanded further into the UK, Italy, Malaysia, Indonesia and parts of Scandinavia through subsequent bolt-on acquisitions and joint ventures.

It's worth being honest about how unusual this is. Plenty of Australian companies have tried to take a domestic advantage offshore and been eaten alive by local incumbents who understand the regulatory terrain better. REA Group managed the trick in online real estate; Ramsay managed it in one of the most heavily regulated industries there is. That's a harder version of the same problem, and Ramsay pulled it off mostly by buying operators who already had local licences and referral relationships rather than trying to build from scratch.

The numbers Paul Ramsay actually cared about

Contemporaneous profiles of Paul Ramsay consistently describe a founder who was allergic to excessive leverage and instinctively conservative about how the balance sheet was run, even as the company expanded aggressively into new geographies. He was famously reluctant to sell down his own stake, and Ramsay Health Care's ownership structure retained heavy founder-family influence for decades. That combination — expansionary on assets, conservative on capital structure — is not the usual founder pattern. Most empire-builders lever up hard and hope growth outruns the interest bill. Ramsay grew mostly through retained earnings and disciplined acquisition financing, which is a slower way to build a global business but a much harder one to blow up.

You can see the discipline in how the company weathered the entry of new competitors and, later, in how it approached the COVID-19 period, when private hospital capacity was temporarily redirected to support public health systems across several of its markets under various government arrangements. A more highly geared operator would have found that period existential. Ramsay found it merely difficult.

The philanthropic afterlife: the Paul Ramsay Foundation

Paul Ramsay died in 2014, and the bulk of his personal wealth, built substantially through his stake in the company he founded, went to the Paul Ramsay Foundation, now one of the largest philanthropic foundations in Australia by asset base. It's an unusual endpoint for a healthcare empire — most founders either hand the company to family or sell out to private equity. Ramsay did neither in the way you'd expect; the foundation now exists as a separate entity funding social programmes, while Ramsay Health Care itself continued as an independent listed company for some years before fielding takeover interest from global private equity consortiums in the early 2020s, interest that ultimately didn't convert into a completed deal on the terms proposed.

I think that failed takeover saga is instructive. It tells you private equity still sees enormous embedded value in a hospital network built on decades of accumulated local relationships and regulatory positioning — the kind of asset you genuinely cannot replicate by writing a cheque and hiring management. It also tells you the company's board, even without Paul Ramsay in the room, held onto some of his instinct not to sell just because the number on offer was large.

What the Ramsay story says about Australian outliers

Compare Ramsay to some of the other Australian companies that made it big overseas and the contrast is sharp. Altium and Afterpay built global businesses on software and consumer behaviour shifts, moving fast in markets with comparatively light regulatory friction. Ramsay built its global business one hospital licence at a time, in a sector where the regulatory framework in each country is different, complex, and genuinely dangerous to get wrong. That's a slower game, and it rewards a founder who's willing to be patient for thirty years rather than chase a listing event.

My mildly contrarian view, for what it's worth: I reckon Ramsay gets less attention in the "great Australian success stories" conversation than it deserves, precisely because hospitals aren't sexy and the growth was gradual rather than explosive. Everyone wants to talk about the unicorn that tripled in eighteen months. Fewer people want to talk about the healthcare operator that quietly became one of the largest private hospital groups on the planet over five decades, without a listing pop or a viral moment, just steady acquisition and an aversion to debt that would make most growth-stage CFOs uncomfortable. According to the Australian Bureau of Statistics' health expenditure data, private hospitals continue to carry a substantial and growing share of elective surgical activity in this country, which is exactly the trend Ramsay bet on when nobody else was watching. The Australian Institute of Health and Welfare's hospital data confirms the same structural shift globally, in markets running comparable funding models.

Ramsay Health Care isn't a story about disruption. It's a story about running the same unglamorous playbook longer and more carefully than anyone else in the sector was prepared to, across more countries than anyone thought an Australian hospital operator reasonably could. Sometimes that's the whole trick.

For more on the Australian companies that built genuine global positions rather than just local dominance, the Outliers & Global Empires hub has the rest of the series, including how Carsales.com quietly built an international footprint of its own from a classifieds base nobody expected to travel.

— Priya Naidu, Outliers & global champions, Perth