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Annual integrated report 2011


Hospital division review: SA

The Hospital division is committed to delivering quality, innovative healthcare solutions, while broadening access to affordable, quality healthcare in Southern Africa.

Overview

The division owns and manages 55 private hospitals across SA, including private facilities forming part of Public Private Partnerships (PPPs). The division comprises a mix of full-service tertiary, high-tech hospitals and same-day surgical units with a number of centres of excellence. The Hospital division has 9 052 registered beds representing approximately 27% of the private healthcare market, with some 7.5% of the total registered beds in SA including state facilities.

We continue to strive for excellence in a unique brand of patient care delivered by people who are passionate about the sanctity of life, personal dignity and respect. As a result our service offering is tailored to providing specialised care. It includes 338 theatres, with 16% of total beds being intensive care (ICU) and high care (HC). Our hospitals have 25 catheterisation laboratories including four electrophysiology (EP) laboratories, 43 accident and emergency units, 40 hospitals offering maternity services, 49 pharmacies, seven transplant units, 37 sexual assault centres and eight breast milk reserve centres.

Growing demand and strong performance

The demand for private healthcare remains strong, fuelled by an increase in the medically insured population. We have noted a change in patient profile as a result of an ageing client base and increased lifestyle diseases, which combined with the impact of enabling medical technology, continues to drive increased utilisation.

The Hospital division delivered a strong performance for the year, with patient-day growth of 2.2% and a 6.4% increase in net revenue per patient day. Length of stay increased 2.0% with a marginal shift towards more medical cases than surgical cases. EBITDA margins improved as a result of the growth in revenue, operational efficiency, cost containment and standardisation of consumables.

Generic medication comprises on average 68% of substitutable medicines dispensed in our hospitals, thereby contributing to lower-cost, quality healthcare on offer. Standardisation of surgical products continued to yield good results in 2011 and this benefit is expected to improve in the coming year.

Working capital was exceptionally well controlled with hospital debtors’ days at 26.8 days (2010: 30.3 days) at record low levels. Pleasingly, amounts receivable from compensation for occupational injuries and diseases were further reduced this year. The centralised shared services also contributed to an improvement in working capital.

Expansion and targeted investment

The Hospital division remains dedicated to our vision of investing in people, infrastructure and technology and establish lasting partnerships with healthcare professionals. During the year we entrenched this vision through strong capital investment in our facilities.

This resulted in an increase in the number of registered beds from 8 874 in the prior year to 9 052. Netcare Waterfall City Hospital in Midrand, which was constructed in conjunction with our empowerment partners, Phelang Bonolo, opened in July 2011 and contributed 126 beds to this increase. A further 52 beds were added across various other facilities including the following:

  • Netcare Blaauwberg Hospital – four ICU beds;
  • Netcare Linkwood Hospital – 10 maternity beds;
  • Netcare Montana Hospital – eight new ICU beds as part of the first phase of a 54-bed expansion project; and
  • Netcare Mulbarton Hospital – seven neo-natal intensive care unit (NICU) and 20 maternity beds.

Netcare’s investment in infrastructure included:

  • Upgrading the existing catheterisation laboratory at Netcare Sunward Park Hospital to a new hybrid catheterisation theatre for cardiac and general vascular procedures. This has enabled less invasive procedures leading to faster results, reduced hospitalisation and significant cost savings.The facility utilises the latest robotic technology to improve treatment capabilities;
  • Renovating operating theatres at Netcare Park Lane and Netcare Garden City hospitals;
  • Ward renovations at Netcare Milpark Hospital;
  • Refurbishing the paediatric wards at Netcare Unitas and Netcare St. Anne’s hospitals; and
  • The first phase of a 54-bed expansion project at Netcare Montana Hospital, which included theatre renovations and new consulting rooms.

From a utilities optimisation perspective, the Hospital division makes up 92% of the total Group electricity consumption. There is still much room to improve energy efficiency, and we will be exploring partnerships to realise this during 2012. Most of our facilities incorporate older technology that will require replacement in line with these objectives. On the positive side, the new Waterfall City Hospital that opened in July 2011 incorporates many green design technologies.

80 Refer to our Environmental report for further details.

The remarkable story of Nana Ntombela

Nana Ntombela suffered from an illness that caused her leg to swell to more than 1.5 metres in diameter, rendering her immobile. She had given up hope until vascular surgeon Dr Dirk le Roux at Netcare Sunninghill Hospital became involved. With a holistic combination of treatments Nana made rapid progress and was soon walking with crutches. Sufferers of similar conditions have found hope in this incredible story of recovery.

Investing in our people and the community

We continue to act on our commitment to passionate staff and empowered partnerships. The link between high levels of engagement, skills development and patient care is clear and informs our strategic commitment to “Growing with passionate people”. This link is also pivotal to attaining our transformation objectives.

Engagement with our staff has continued and deepened. For key issues raised in employee engagement, refer to Our key relationships on page 6.

Training continues to be a priority and our approach is grounded in a solid commitment to developing healthcare skills for SA more broadly. Refer to our detailed report on employee programmes, including training and skills development in Our people on page 74.

Transformation objectives are being pursued across the Hospital division and are managed at a Group level.

72 Refer to our Transformation report for further details.

Our valued network of doctors who have selected a Netcare facility as their treatment centre of choice grew during the year. We welcomed 126 new physicians, of which 71% are from surgical disciplines and 41% are newly qualified.

Accident and emergency units at Netcare hospitals continue to provide emergency care and stabilisation for patients suffering life-threatening conditions and who are unable to pay for these services. Additional information on social investment is available in the Corporate social investment report on page 77.

Looking ahead

  • Continue to invest in infrastructure and technology and intend to add an additional 233 registered beds to our facilities. Construction has started at the following hospitals, with completion expected during the 2012 financial year:
    • Second phase of the Netcare Montana Hospital expansion – 30 surgical, four paediatric, four NICU and eight day-ward beds;
    • 64 beds at Netcare The Bay Hospital – 30 surgical, 20 medical and 14 ICU beds;
    • 57 beds at Netcare Mulbarton Hospital – 30 surgical beds, 20-bed maternity and a seven-bed NICU;
    • 35 beds at Netcare Kingsway Hospital – 23 medical and 12 surgical beds; and
    • 31 beds at Netcare Linmed Hospital – 26 surgical and five day-ward beds.
  • Focus on further standardisation of medical consumables as we drive the need to provide quality, affordable healthcare.
  • Explore ways to address the skills shortage among nursing and pharmaceutical staff, in particular through additional training and development initiatives.
  • Continue to strengthen our involvement with PPPs, particularly in Lesotho and the Port Alfred and Settlers hospitals.

South African hospitals

  Registered beds
Hospital 2011   2010
Gauteng 5 422   5 246
Akasia Hospital 162   162
Bell Street Hospital 50   50
Bougainville Hospital 60   60
Bronkhorstspruit Hospital 43   43
Clinton Hospital 165   165
Constantia Day Clinic1 24   24
Femina Hospital 134   134
Garden City Hospital 363   363
Jakaranda Hospital 130   130
Krugersdorp Hospital 285   280
Linksfield Hospital 283   283
Linkwood Hospital2 43   33
Linmed Hospital 172   172
Milpark Hospital 346   346
Montana Private Hospital 170   162
Moot Hospital 92   92
Mulbarton Hospital 182   155
N17 Hospital 170   170
Netcare Rehabilitation      
Hospital 110   110
Olivedale Hospital2 265   265
Optiklin Eye Hospital 14   14
Optimed Clinic3 12   12
Park Lane Hospital 204   204
Pretoria East Hospital 358   358
Protea Day Hospital 10   10
Rand Hospital 151   151
Rosebank Hospital 135   135
Sunninghill Hospital 258   258
Sunward Park Hospital 214   214
Union Hospital 222   222
Unitas Hospital 469   469
Waterfall City Hospital2 126    
 
  Registered beds
Hospital 2011   2010
North West 163   163
Ferncrest Hospital2 163   163
Free State 362   362
Kroon Hospital 80   80
Pelonomi Private Hospital3 4 87   87
Universitas Private Hospital3 4 127   127
Vaalpark Hospital 68   68
KwaZulu-Natal 1 692   1 688
Alberlito Hospital 119   119
Kingsway Hospital 145   145
Kokstad Private Hospital3 4 36   36
Margate Hospital 99   99
Parklands Hospital 216   212
St Anne’s Hospital 205   205
St Augustine’s Hospital 418   418
The Bay Hospital 198   198
Umhlanga Hospital 256   256
Eastern Cape 527   527
Cuyler Hospital 124   124
Greenacres Hospital 340   340
Port Alfred Hospital3 4 31   31
Settlers Hospital3 4 32   32
Western Cape 886   888
Blaauwberg Hospital 104   96
Christiaan Barnard Memorial      
Hospital 244   244
Kuils River Hospital 189   189
N1 City Hospital2 225   235
UCT Private Academic      
Hospital 124   124
Total 9 052   8 874
1 Interest in joint venture.
2 Leased property.
3 Investment in associate.
4 Managed hospital.