Diagnostics boosts Life Healthcare

Challenging environments across all its trading markets did nothing to slow Life Healthcare’s rise as the company grew overall revenue for the year to September 2019 by 9.3% to R25.7 billion.

While southern Africa continues to be the majority revenue earner for the group, bringing in R18.5 billion (up 7% from last year), the hospital group continues to increase its investment in diagnostics worldwide.

In 2017, Life Healthcare made a massive investment in diagnostic services by buying into the Alliance Medical Group, an international diagnostics company with excellent market positions in the UK, Italy and Ireland.

Globally, diagnostic services’ revenue grew by 13.4% to R5.6 billion, driven by:

Strong growth in PET-CT scan volumes in the UK

The full-year impact of the acquisition of the Italian clinics in the 2018 financial year

The acquisition of scanning facilities in the UK in December 2018, and

Solid underlying performance in Ireland.

In the UK, Life Healthcare bought European Scanning Centre; three high-end scanning facilities targeting private patients. There has been solid volume growth in diagnostic clinics in both Ireland and Italy.

Looking ahead within southern Africa, Life Healthcare expects to share in R8.5 billion of private sector spend for imaging services. Chief executive Dr Shrey Viranna says the group is looking at using the expertise of Alliance Medical to work with local radiologists and develop an imaging services business, which should commence operations in the second half of next year.

Mental health focus in southern Africa

Complementary services are proving to be the fastest growth area for southern Africa, with future growth plans including the geographic expansion of acute rehabilitation, renal dialysis and mental health facilities. This will include 50 new beds in the year ahead. For the year to September, the group added 80 mental health beds to its portfolio.

There was also a 5.8% increase in revenue per paid patient day and a 0.8% increase in paid patient days. In the current year Life Healthcare also opened its first outpatient clinic in South Africa.