Business

Netcare flags load shedding, diesel price hikes, and SA's nurse shortage as key risks

Business Insider SA
(Photo by Gallo Images/Sydney Seshibedi)
(Photo by Gallo Images/Sydney Seshibedi)
  • South Africa's hospitals aren't admitting as many Covid-19 patients as they were last year.
  • Private healthcare group Netcare recorded its highest level of non-Covid-19 activity since the start of the pandemic during the first quarter of 2022.
  • And while hospitals are no longer inundated with Covid-19 cases, they're now needing to compete with the country's socioeconomic shortfalls.
  • Load shedding is disruptive and made worse by soaring diesel prices paid to keep the backup generators on.
  • A critical shortage of nurses also continues to keep hospitals on edge.
  • For more stories go to www.BusinessInsider.co.za.

South Africa's load shedding crisis, compounded by soaring fuel prices, and a shortage of nurses have been cited as key risks faced by private healthcare provider Netcare.

Despite a recent uptick in Covid-19 cases, possibly linked to a fifth wave of infections, hospital admissions throughout South Africa remain relatively low. The country's largest private healthcare provider, Netcare, recorded its highest level of non-Covid-19 activity since the start of the pandemic during the first quarter of 2022.

This easing of coronavirus hospitalisations was referenced by Netcare in its interim group results presentation issued on Monday.

The shift towards a pre-pandemic case mix is further reflected by increases in theatre operations, shorter hospital stays, and surgical cases accounting for more than 60% of total admissions.

And although medical resources aren't as strained as they were a year ago during a heightened phase of the Covid-19 pandemic, hospitals are now under pressure from compounding socioeconomic issues.

South Africa's failing power grid, with intensified bouts of rotational load shedding implemented by embattled utility Eskom, is chief among Netcare's worries. It's vital for hospitals to keep their equipment functioning correctly at all times and, to do this, facilities rely on backup diesel generators.

But diesel is more expensive than ever before, having increased by more than 50% over the past year. Making matters worse, neither load shedding or fuel price hikes are expected to end anytime soon.

"The instability of the national electricity grid in South Africa remains a key risk, as frequent power outages necessitate an increasing reliance on diesel-powered generators, where prices are escalating," noted Netcare.

While load shedding and rising diesel costs make it more expensive to care for patients, finding qualified nurses and doctors has become harder too. It's not just a South African phenomenon, but local doctors and nurses are more inclined to look for work abroad due to remuneration, work conditions, safety reasons, and government's National Health Insurance plan.

"The national shortage of nurses is a further risk, and the attraction and retention of scarce skills remains a critical imperative for the business," said Netcare.

In contending with these local issues, Netcare has also been impacted by the global supply chain crisis.

"The macro-environment continues to be impacted by global supply chain constraints, higher inflationary pressures and rising interest rates," said Netcare.

"These factors are likely to worsen, prolonging supply chain bottlenecks and placing increasing pressure on prices."

To mitigate delays and rising prices, Netcare has fast-tracked its procurement of IT equipment for its electronic medical record system, which has already been rolled out at 14 hospitals.


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