Occupational health standards are waning due to “inexperienced” new players, Life Healthcare CEO Peter Wharton-Hood told Business Day last week, warning that companies are increasingly opting for lower prices over quality when choosing wellness services for their employees.
The group’s unit Life Health Solutions is one of the leading occupational health, wellness and health risk management outfits, partnering with businesses countrywide to provide employee wellness programmes, primary healthcare and emergency medical services.
“Life Health Solutions is, in the main, an occupational health services company,”he said. “Yet while demand for those services remains – because it is a statutory obligation on companies – the price they’re willing to pay is constantly under pressure.
“We have also found a lot of new market entrants who have made companies be prepared to pay less. Many of these new entrants have little to no experience in delivering the services required or the infrastructure to support the delivery of those services. Some of the corporates have opted to go for price over quality.”
Occupational health in South Africa is the multidisciplinary field dedicated to protecting workers’ physical, mental and social well-being. It focuses on preventing workplace injuries and occupational diseases, managing workplace hazards and ensuring environments are physically and mentally adapted to employees.
Life Healthcare impaired R29m in the Life Health Solutions business in the six months ended March, the group said on releasing its interim results last week. Worth R16bn on the JSE, it’s planning to spend about R2.4bn in capital expenditure by the end of the financial year.
In the six months under review, R525m was spent on replacement and infrastructure capex and R350m to acquire a hospital property it previously leased, in line with the the company’s strategy to own its own properties rather than lease its hospital infrastructure.
Wharton-Hood said that the cost of borrowing – as a corporation – “is significantly lower than that of landlords”.
“We can fund the cost of properties more cheaply than landlords. Strategically, we want to be in control of the destiny of all of our hospital properties. We don’t have to be in a position where we renegotiate leases.”
The group reported marginal growth in revenue, from R12.1bn in the comparable period to R12.4bn in the period under review.
Business Day article – Life Healthcare CEO warns companies are choosing cost over quality
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