Netcare Christiaan Barnard Memorial Hospital
Netcare Christiaan Barnard Memorial Hospital in Cape Town.
  • Netcare had a tough half-year, and reported a fall in occupancy at its hospitals.
  • The trend among medical schemes to favour some hospitals is working against Netcare.
  • However, patient days due to mental illnesses has surged by 20% in the past six months.
  • For more, go toBusiness Insider South Africa.

On Monday, the hospital group Netcare released its results after a tough six months, with hospital occupancy and its profitability on the decrease.

But it also saw a 20% surge in patient days at its psychiatric clinics in the past half years.

Netcare’s Akeso Clinics treats patients with anxiety disorders, depression (including post-natal depression), eating disorders, bipolar disease, post-traumatic stress and substance abuse.

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More than 50 new beds were created for mental health patients at the clinics, and a further expansion is planned. Akeso has 13 clinics across the country.
The Akeso Randburg Crescent Clinic offers treatment for anxiety and depression, substance abuse, eating disorders, ageing disorders and post-traumatic stress disorder.

“Growth in demand for mental health services is expected to remain strong,” Netcare says in its results.

A third of South Africans are estimated to experience a mental illness in their lifetime, and Metropolitan Health’s Dr Ali Hamdulay, who also chairs the Board of Healthcare Funders of Southern Africa chairman, told Fin24 that mental illness could soon overtake HIV/Aids as the leading cause of illness in South Africa.

Discovery Medical Scheme reported that hospital spending on psychiatric patients doubled in the five years to 2016, with mental illnesses now representing almost 13% of total medical claims. Some 5% of total medical claims went towards treatment of depression.

Netcare, which sold its embattled UK business last year, reported revenue growth of 5.6% to R10.5 billion in the past six months, while group profit after taxation fell by 7.9% to R1.12 billion.

It is struggling as the number of medical scheme members in South Africa remains stagnant. In addition, it has been hit by the growing trend that medical schemes force their members to use specific hospitals. “These networks restrict member access to specified hospital facilities, thereby allowing medical schemes to shift market share in return for price discounts.”

While some Netcare hospitals are included in Discovery’s hospital network, it is far outnumbered by its competitors Life and Mediclinic.

Netcare's hospital occupancy dipped to 64.5% from 65.3% in 2018. While patient days increased by 8.5% (thanks in part to Akeso), acute hospital patient days fell by a percent.

The company expects that its profit margins – particularly in hospitals and emergency services - will remain under pressure in coming months. Its share price fell by 3% to R22.63.

Netcare's share price is down a third over the pas
Netcare's share price is down a third over the past three years. (Fin24)

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