Although Netcare will be focusing on an ambitious digitisation strategy, staff need not fear losing their jobs and being replaced by artificial intelligence, the CEO said on Monday.
The private hospital group is forging ahead with its digitisation strategy that will draw on AI capabilities, but CEO Richard Friedland believes the company’s natural attrition rate will take care of any decline in its staff requirements.
“We’ve always relied on attrition rather than retrenchment, and we don’t foresee that changing even as we become more focused on AI,” he told Business Day, adding that Netcare was firmly committed to its digitisation strategy despite the uncertainty facing the sector as the government presses ahead with National Health Insurance (NHI).
“We don’t believe NHI is either affordable, sustainable and in its current form workable. We’ve … implored the President to take the high road and work with all parties within the private sector. Unfortunately, it does appear that the government has chosen the low road of slogging this out in court.
“We firmly believe a workable, sustainable solution is one of collaboration between the different sectors. We can’t wait 15 years to solve this country’s healthcare needs,” he said as the company released its interim results for the six months to 31 March.
The group reported a 5.3% rise in revenue to R12.68bn for the period under review, while normalised earnings before interest, taxation, depreciation and amortisation (ebitda) improved 8.3% to R2.35bn.
Adjusted headline earnings per share (Heps) rose 20% to 58.8c and an interim dividend of 26c per share was declared.
Growth was driven by increased activity and operational efficiencies, and was achieved despite a constrained and competitive operating environment, said Netcare.
The first phase of a10-year strategy for transforming the business with digitisation and data had increased operational efficiency and delivered R439m in savings over the past three and a half years, Friedland said, with Netcare now being in the second phase of the strategy, using data to improve patient care.
For example, providing chronic kidney dialysis patients with an app to monitor their condition, along with regular monitoring reports to their doctors, had led to a steady improvement in outcomes measured by medical scheme administrator Discovery Health.
Netcare also had a lower hospital admission for dialysis patients than its competitors, he said, citing data from a large restricted medical scheme.
He added that the group was also using data to change the attitudes of doctors reluctant to prescribe cheaper generics, which they perceive as inferior despite assurances from the SA Health Products Regulatory Authority that they are equivalent.
Netcare analysed clinical data from patients admitted to its facilities and demonstrated that the risk-adjusted mortality rate for people for whom generic anticoagulants were prescribed was the same as for those receiving innovator versions.
The same comparison held true for antibiotics, said Friedland. Generic anticoagulants are 14% cheaper than innovators while antibiotics are up to 70% cheaper.
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