Life Healthcare CEO, Peter Wharton-Hood, has criticised the National Health Insurance (NHI) scheme which was signed into law by President Cyril Ramaphosa last week, saying it was a missed opportunity to expand sustainable access to healthcare.
This comes as the business sector has widely criticised the NHI, with Business Leadership SA saying the scheme was a political gimmick ahead of the general elections next week.
Wharton-Hood said yesterday that the NHI had been signed into law without addressing concerns raised over it, including its burden on already strained state coffers from a funding perspective and its impact on private healthcare providers and professionals.
He said Life Healthcare was expecting its implementation will be lengthy and bumpy.
“We, therefore, expect a lengthy implementation journey of NHI due to operational and legislative changes required, as well as the current fiscal constraints,” he said.
“We are monitoring the developments on the NHI Act as well as related legislation and will explore all avenues to ensure the sustainability of the healthcare industry.”
He explained that the company remained committed to “acting in the best interests of our doctors, nurses” and patients.
Life Healthcare raised revenue from continuing operations for the interim period to end March 2024 by 7.8% to R11.7 billion, consisting of a 5.9% uplift in revenue from its Southern African operations and a 77.5% increase in international revenue which amounted to R513 million.
The hospital group’s normalised earnings before interest, tax, depreciation and amortisation (Ebitda) from continuing operations, however, sagged by 2.8% to R1.7bn.
Total earnings per share (EPS) from continuing and discontinued operations for the period paced up 540.6% to 242.8 cents.
This has been ascribed to a R2.8bn once-off gain recognised following the completion of the Alliance Medical Group disposal to iCON Infrastructure.
Life Healthcare received R10.2bn in net cash proceeds after settling offshore debts as well as transaction costs for the Alliance deal.
It paid a special dividend of R8.8bn from the proceeds last month.
For the half-year period under review, the company has declared an interim cash dividend of 19.0 cents per share, an increase of 11.8% over the prior period, helping the company to a 5.55% rise in the value of its shares on the JSE to R11.22 in afternoon trade yesterday.
Although Life Healthcare’s EPS performance was significantly higher, its headline earnings performance for the interim period was firmer by 63% at 65.2 cents, it reported yesterday.
There was strong demand for the company in its southern Africa operations driven by its stronger positioning in the medical aid market.
This had resulted in higher utilisation of the group’s hospitals and complementary services with patient paid days showing growth of 2.3%.
“As part of our portfolio optimisation, we closed two facilities during the prior period: a small maternity facility in Gauteng and an acute rehabilitation facility in Bloemfontein,” it said.
“(We) completed a transaction to acquire the imaging equipment of an imaging practice in KwaZulu-Natal (KZN), effective 1 March 2024 for a cash consideration of R55 million.”
Life Healthcare also received approval from the Competition Commission for the acquisition of Fresenius Medical Care (FMC) renal dialysis clinics.
This has helped the company improve on its South African footprint of renal dialysis clinics which have now risen to to 74.
In the period under review, Life Healthcare spent R696m in capex for its southern Africa operations, with a significant proportion of this capex at about R578m used up on maintenance capex for existing facilities.
It projects to spend R1.2bn in capex for the full year to September 2024, compared to R1.1bn a year earlier.
BUSINESS REPORT