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South Africa: Netcare Warns of Health Skills Exodus
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Business Day (Johannesburg)
20 May 2008
Posted to the web 20 May 2008
Tamar Kahn
Johannesburg
Netcare, SA's biggest private hospital group, warned yesterday of "terrible unintended consequences", including skills flight, if the health department ignored industry concerns about plans to amend the National Health Act.
Industry players claim the draft amendments give the health minister excessive power to intervene in annual tariff negotiations.
"It is of enormous concern ... we face a very real threat of an exodus of skills ," CEO Richard Friedland said yesterday.
The proposed amendments have drawn fire from doctors and private hospitals worried about the powers that would be given to the minister to intervene in tariff negotiations between healthcare service providers and medical schemes.
The deadline for submissions on the amendments was Friday.
A recent survey by SA's biggest doctors' group, the South African Medical Association, suggested two-thirds of the country's doctors would consider emigrating if proposed amendments to the act were implemented.
Last week, Medi-Clinic International chairman Edwin Hertzog said the draft amendments would give the minister "unprecedented powers to intervene in the activities of the private sector".
Friedland said the government's approach to regulating the private healthcare sector stood in stark contrast to that of the UK , which intervened to maintain patient safety and good governance, leaving the sector to set its own prices.
"We need a regulator of outcomes, so we don't see babies dying in hospitals, and people are held accountable," he said .
Netcare owns the UK's biggest private hospital group, General Healthcare Group (GHC), which it bought two years ago.
Netcare yesterday reported interim results for the six months to March, posting a 15,7% increase in revenue to R10,3bn compared with the corresponding period last year. Basic earnings per share rose 10,5% to 25,3c. Domestic growth was driven by an increase in patient numbers, as slightly more South Africans were able to afford medical scheme membership, Friedland said.
Patient growth was also driven by the rising incidence of lifestyle-related conditions such as diabetes and cardiovascular disease, and a growing HIV/AIDS burden . At the same time, older patients sought more care as technology became available to manage previously untreatable conditions, he said.
Netcare's UK operations moved into the black for the first time since the acquisition of GHC, delivering a core operating profit of R992m. The group acquired seven National Health Service hospitals for £109m in the review period .
Netcare would invest R60m in diesel-powered generators this financial year, to enable 20 of its facilities to run independently of the national electricity grid, with more planned for next year. Power cuts had cost Netcare R5m between January and March .
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However, Friedland was optimistic about growth prospects in SA . Netcare said it believed the government should enable a tiered healthcare system with "legislative indulgences" to enable private healthcare providers to offer services to low wage earners who could not afford medical scheme membership.
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