Financial impact of COVID-19 will be felt by SA’s private hospital groups in 6 months

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South Africa‘s private hospital groups have had to act fast to deal with the coronavirus outbreak and its impact will likely show up on their balance sheets in six months. Business Day reports that along with public hospitals, the country’s private health-care hospitals have put measures in place to deal with the virus, including working with the government, which may include accommodating state patients.

But the additional pressure hospitals are facing comes after their share prices have taken a dive since the beginning of this year, with Life Healthcare dropping 24%, Netcare down 19.38% and Mediclinic 20.83% lower.

Michael Treherne, a portfolio manager at Vestact, said the hospital groups will have demand-related issues in the short term but there should be a spike in demand in the long term as people return to hospitals for the non-emergency surgery they had put off during the outbreak.

The report says the pressure the hospitals could face depends on the rate of new infections. At Life Healthcare, measures in place include ensuring that patients, staff, doctors and visitors are screened before entering any facilities, and restricting visiting hours. The group could not respond to the possible financial impact of the pandemic at this stage but it was in talks with the government regarding the support it could provide.

Netcare has initiated disaster management plans at its hospitals. “The initiation of these plans does not in itself carry much additional costs and they are more related to moving into a specific mode of heightened activity,” said Melanie Da Costa, director of strategy and health policy at Netcare. Mediclinic Southern Africa is also working with the public sector and has had discussions about how to provide South Africans with the care they need.

Full Business Day report

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