Netcare is sprinting ahead with digitisation and AI, with CEO Richard Friedland saying the financial benefits of spending on these are already overtaking the initial implementation costs, reports News24.
Talking to investors on Monday, he said this was just the beginning for the hospital group, which is eyeing even more efficiencies from machine learning, and whose app has been downloaded more than 1m times.
Cumulative savings and cost avoidance as a result of AI and digitisation now total R705m, compared with an implementation spend of R670m, Friedland said, shortly after the hospital group grew revenue almost 5% to about R13.3bn in its six months to end-March.
Earnings before interest, taxation, depreciation and amortisation (EBITDA) grew 6.6% to R2.5bn, and its EBITDA margin climbed 0.3 of a percentage point to 18.8%, which Friedland largely attributed to Netcare’s “digital dividend”.
Digitisation is helping with everything, he said, from the management of patient records to the development of new clinical products, and the group is already using its own algorithm to detect sepsis in patients hours before clinical symptoms appear.
He cited an AI framework from the Mayo Clinic in the US that can detect pancreatic cancer three years before radiologists, and pointed out that 31.5% of US hospitals are actively using generative Al to help in emergency medical rooms.
Within a year, he told News24, this was likely to be 50%, adding that AI is no longer just an option in healthcare; it is “essential infrastructure”.
Netcare has made AI adoption a core part of its strategy, looking, for example, to leverage its data to attract clinicians and build treatment models.
Life-saving innovations
The group is rolling out smart watches that, among other things, monitor oxygen levels for at-risk patients, while apart from its diagnostic model for detecting sepsis risk, it has also applied for three others, including one model for detecting renal failure risk and another for emergency department admissions.
In development is a predictive machine learning model to reduce unplanned readmissions – to identify patients who are discharged, or still in hospital, who are at high risk of readmission. This will help keep medical scheme costs low, and, for example, Netcare may be able to send patients home with various devices to monitor their healing progress.
Another predictive model would help medical teams in emergency or casualty departments better triage patients.
“And that’s a classic example of being proactive and predictable, as opposed to the kind of reactive way that medicine has run in the past,” said Friedland.
“We’re very good at (responding to) fast death, we’re lousy at slow death – you know, managing chronic conditions. And I think the predictive model will be welcomed by medical schemes and certainly by our teams.”
The Netcare mobile app now has 1m downloads and more than 400 000 active users, and offers, among other things, meal planning and free wifi on admission.
This all comes as some of SA’s medical schemes tighten benefits to shore up their solvency. Paid-patient days grew by 0.7% in Netcare’s six months, including a 3.4% increase in mental health patient days. Friedland also said SA was seeing more chronic patients generally, and more mental health patients.
The group expects a second-half acceleration due to seasonality, including the winter cold and flu season.
In November, Netcare expected total paid-patient days for the year to grow by up to 2.4%. That has now been downgraded to between 1.1% and 1.6%. There has also been some shift in case mix, which has supported utilisation of intensive care and high-care beds, it said, which continue to outperform 2019 levels.
But the overall acute length of stay fell to 4.39 days from 4.43 days.
Sizwe Hosmed is under provisional curatorship, while the Government Employee Medical Schemes (GEMS) announced in January that it would no longer authorise non-prescribed minimum benefit admissions for its Tanzanite One members at private healthcare facilities.
News24 article – The AI hospital is already here, says Netcare (Restricted access)
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