Mediclinic Intl reports another annual loss; New day clinics for SA

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Mediclinic International, which has announced another annual loss, intends to build six more day clinics in SA in the next two years, reports Business Day.

Mediclinic International says it made another annual loss after writing down the value of its investments in UK-based Spire Healthcare Group and Switzerland’s Hirslanden by a combined £405m (R7.4bn), reports Business Day. In the UK, Mediclinic has been grappling with lower revenues from state patients funded by the National Health Service, while regulatory changes in Switzerland mean some treatments have been shifted from in-patient stays to less lucrative outpatient visits.

The private healthcare group made a reported loss of £151m in the year to end-March, from a loss of £492m previously, as it recorded a non-cash impairment charge on its investment in Spire of £164m and a £241m impairment linked to Hirslanden. The impairment in Switzerland, against the value of property, equipment, vehicles and intangibles, followed “changes in the market and regulatory environment”, the group said.

The report quotes group CEO Ronnie van der Merwe as saying that over the past 18 months, all Swiss hospital operators have been affected by new regulations related to out-patient tariff reductions and “out-migration of care”. Thanks to cost savings and “operational efficiencies”, the financial impact of the new rules was “moderated” in the second half of the year.

“Adapting our business to the changing global healthcare environment remains a priority,” van der Merwe said. “We have identified selective expansion and upgrade investments across the group and will continue optimising the delivery of the services and care we provide.”

 

Mediclinic intends to build six more day clinics in the next two years – the group is quoted in Business Day as saying that day clinics are a new growth area. ‘The broader economic environment in Southern Africa at the moment is rather weak. We have not seen much change in the medical aid population. From our perspective, our focus is very much towards the day case clinics,’ van der Merwe is quoted in the report as saying.

The company currently has eight day case clinics in Southern Africa.

Van Der Merwe said the company’s priority was to seek growth in its existing markets.

“We have good footprint in three different continents. Our teams on the ground know their territories quite well. We are careful and very disciplined in terms of capital allocation. We are not just going to jump (into a market). We will want to know very well if we are welcome as private enterprise players in those markets,” he said.

Van der Merwe said the roll-out of electronic health records system was a key priority for the company in the Middle East. He said the company would soon make a decision regarding its investment plan on the initiative. “These investments directly assist in enhancing patient care and patient engagement.”

Business Day report
Business Day report


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