Netcare warns of health skills exodus

Netcare warns of health skills exodus 

From Business Day

20 May 2008

by Tamar Kahn
Science and Health Editor

Industry players claim the draft amendments give the health minister
excessive power to intervene in annual tariff negotiations.

"It is of enormous concern ... we face a very real threat of an exodus
of skills ," CEO Richard Friedland said yesterday.

The proposed amendments have drawn fire from doctors and private
hospitals worried about the powers that would be given to the
minister to intervene in tariff negotiations between healthcare
service providers and medical schemes.

The deadline for submissions on the amendments was Friday.

A recent survey by SA's biggest doctors' group, the South African
Medical Association, suggested two-thirds of the country's doctors
would consider emigrating if proposed amendments to the act were
implemented.

Last week, Medi-Clinic International chairman Edwin Hertzog said
the draft amendments would give the minister "unprecedented
powers to intervene in the activities of the private sector".

Friedland said the government's approach to regulating the
private healthcare sector stood in stark contrast to that of
the UK , which intervened to maintain patient safety and good
governance, leaving the sector to set its own prices.

"We need a regulator of outcomes, so we don't see babies dying
in hospitals, and people are held accountable," he said .

Netcare owns the UK's biggest private hospital group, General
Healthcare Group (GHC), which it bought two years ago.

Netcare yesterday reported interim results for the six months
to March, posting a 15,7% increase in revenue to R10,3bn
compared with the corresponding period last year. Basic
earnings per share rose 10,5% to 25,3c. Domestic growth was
driven by an increase in patient numbers, as slightly more
South Africans were able to afford medical scheme membership,
Friedland said.

Patient growth was also driven by the rising incidence of
lifestyle-related conditions such as diabetes and
cardiovascular disease, and a growing HIV/AIDS burden . At
the same time, older patients sought more care as technology
became available to manage previously untreatable conditions,
he said.

Netcare's UK operations moved into the black for the first
time since the acquisition of GHC, delivering a core operating
profit of R992m. The group acquired seven National Health
Service hospitals for £109m in the review period .

Netcare would invest R60m in diesel-powered generators this
financial year, to enable 20 of its facilities to run
independently of the national electricity grid, with more
planned for next year. Power cuts had cost Netcare R5m
between January and March .

However, Friedland was optimistic about growth prospects in
SA . Netcare said it believed the government should enable a
tiered healthcare system with "legislative indulgences" to
enable private healthcare providers to offer services to low
wage earners who could not afford medical scheme membership.