Netcare: SA taking strain
MENTAL HEALTH CARE: STRONG DEMAND PAINTS DISTURBING PICTURE
Group pays out shareholders a whopping R2.36 billion.
The performance of Netcare’s recently acquired mental health business shows just how much strain South Africans are under. The first full year of integration with Akeso Clinics, the group of 12 dedicated mental healthcare facilities acquired by Netcare last year, saw the hospital provider’s overall revenue climb 4.2% to R21.6 billion in the year to September 30.
CEO Dr Richard Friedland said it was a particularly difficult and challenging year, not only for the group but for the country.
“We are seeing a strong demand for mental health care at our Akeso clinics. We need to find a better way to deal with societal problems caused by ever-increasing stress levels as well as substance and alcohol abuse,” he says.
As many as one in six South Africans suffer from anxiety, depression or substance-abuse problems (excluding conditions such as bipolar disorder and schizophrenia), according to statistics released by the SA Depression and Anxiety Group.
Friedland says there is a rising problem when it comes to minors and substance abuse.
“There is increased availability of designer drugs and increasing popularity of ‘pre-parties’ where these substances are readily available. This, together with substance abuse, is leading to a generation that is struggling to cope Society needs to tackle this urgently,” he says.
Overall patient days increased by 3.7% with the inclusion of the Akeso clinics.
Friedland noted that the growth of Akeso Clinics was very strong with patient days in the mental healthcare division alone increasing by 17.9%. A total of 57 mental health beds were added during the year, including Akeso George, which was refurbished and opened in March this year.
Patient shareholders rewarded
Earlier this year, Steph Erasmus, healthcare and chemicals analyst at Avior, pointed out that of the three healthcare providers (Mediclinic, Netcare and Life Healthcare), the Netcare balance sheet looked (pardon the pun) the healthiest.
Netcare’s chief financial officer, Kevin Gibson, attributed the healthy balance sheet to tight management of the cost base and healthy gearing levels.
Erasmus noted that management’s guidance has been towards paying dividends where possible, and Netcare did not disappoint, paying out shareholders a whopping R2.36 billion. Shareholders received a special dividend of 40 cents a share, an interim dividend of 44 cents a share and a final dividend of 60 cents a share. There was also a share buyback scheme, which saw shareholders benefit to the tune of R450 million.
Digitisation programme rollout in 2020
One of the key initiatives announced this week is the rollout of a digitisation programme (CareOn) in 2020, which Friedland says is intended to ultimately digitise the network so patients can have lifelong records of their engagements with providers via a mobile patient digital electronic record.
The pilot phase was launched in September this year at Netcare Milpark Hospital and will be conducted in three wards before being rolled out throughout the hospital in early 2020.
“Thereafter, the intention is to roll out CareOn to a further four hospitals in 2020 and to the remainder of the portfolio in 2021 and 2022,” he explains.