Read the Conversation
Meeting highlights:
- Lenmed is celebrating 40 years of history: it opened its doors during apartheid times in South Africa, providing access to health to the entire population.
- Lenmed’s footprint in Africa: 19 facilities in South Africa, Botswana, Ghana, and Mozambique.
- Lenmed as a partner of choice for African health: quality accreditations and pioneering procedures in its speciality areas.
- Lenmed’s priorities: strengthen the core of its business, expand its footprint across Africa and the Middle East, diversifying the business.
- Lenmed moved from a hospital provider to a healthcare provider in the upcoming years, the pilot program for the communication platform of clinical data.
- Lenmed’s commitment to building long-standing partnerships and providing healthcare services that aren’t easily accessible in the region.
- Amil Devchand’s lessons learned during the COVID-19 pandemic: the importance of inclusive leadership, open and honest communication, and recognizing the team’s efforts.
EF: How has Lenmed’s footprint evolved since 1984, and what are your current priorities?
AD: Let me start by saying that Lenmed emerged from the unique and challenging circumstances of 1984, during the height of apartheid in South Africa. At that time, people were segregated by race, and if you were non-white, you faced numerous disadvantages, especially when it came to accessing healthcare. A group of doctors in a town south of Johannesburg had enough of these injustices. They went door to door in the community of Lenasia to raise funds to build a healthcare facility to serve the marginalized communities of that time.
This is how the group began. The facility started as a 40-bed unit focused on obstetrics and gynaecology. Today, it has grown into a hospital with over 300 beds. It has been renamed after one of South Africa’s most notable figures, Ahmed Kathrada, who, as you may know, was Nelson Mandela’s close confidant and spent time with him in prison on Robben Island.
That first facility laid the foundation for how the group operates today, with a strong sense of community central to our ethos. Now, we have 19 facilities spread across South Africa, Mozambique, Botswana, and Ghana.
Our priorities moving forward are clear: we are in the healthcare business, and people come to us in their time of need. Our responsibility is to ensure we provide them with the best care possible. Clinical excellence is our major focus, and we are constantly working to enhance it.
We are focusing on using clinical outcomes and the quality of care as key differentiators in our business. We have made significant strides in cardiology, acute stroke care, trauma, bariatric, and spinal surgery. Notably, two years ago, we became the first facility in Africa to be accredited by the American College of Cardiology. Recently, our facility in Botswana received its second accreditation, making it the first outside the USA to earn this particular recognition.
Quality remains a top priority for us, no matter the circumstances. Alongside this, the group has embarked on an aggressive growth strategy, with the ambitious goal of more than doubling the size of our business in the next four to five years in terms of revenue and profitability.
We are pursuing this growth through three key pillars. First, we aim to strengthen the core of our existing business. With 19 facilities, much of our growth has come from acquiring underperforming facilities and applying our operating model to turn them around. Maximizing the return on our current investments and running these facilities optimally is critical.
Secondly, we are expanding our footprint by looking at new acquisitions and entering new territories. We are exploring other African countries and setting up an office in the Middle East to bring our model of care to the GCC region.
The third pillar focuses on diversifying our business from a service line and geographic perspective. Historically, in South Africa, we have primarily been an infrastructure and human capital provider, with services like radiology, pathology, renal dialysis, and oncology being handled separately. However, regulatory reviews are opening up opportunities for us to transition from a hospital provider to a broader healthcare provider. This is a significant focus for us over the next four to five years.
As our facilities mature, we are also looking at how to introduce more high-acuity, complex services to increase access to care. For example, we became the only facility in South Africa to offer cardiology and oncology services for a population of 2 million people, eliminating the need for long-distance travel for essential treatments. Similarly, we have introduced previously unavailable services in Botswana and Mozambique, aligning with our ethos of serving the communities in which we operate.
Lastly, our geographic diversification, focusing on Africa and the GCC, will drive our continued growth.
EF: How do you envision using the funding you are receiving to drive growth and transform healthcare access in underserved communities?
AD: Our recent partnership with the IFC and other funders like Rand Merchant Bank and ABSA aims to support our growth ambitions. We have secured nearly 2 billion Rand in funding, and this capital will be directed towards the three growth pillars I mentioned earlier: optimizing our existing facilities, introducing new service lines, and expanding geographically.
EF: How do you see the centres of excellence contributing to advancing medical expertise in Africa and ensuring that physicians are well-trained and equipped to provide better healthcare?
AD: I believe that with the introduction of technology and other advancements, hospitals as we know them will evolve. Day-to-day healthcare will move out of traditional hospital settings and into homes or other more appropriate environments, depending on the specific conditions. We anticipate this shift happening over the next decade or so. We are already thinking about what future hospitals will look like and positioning ourselves to focus on more complex, high-quality cases, especially as access to such services remains limited in many parts of Africa, including South Africa, which has a more advanced healthcare system.
It is about taking things to the next level, so we have chosen to pursue international accreditation. We did not have to, but we believe it is the right decision. This ensures that when patients visit our facilities, they can trust they receive the best possible care and have the highest chance of a successful outcome. This allows us to benchmark ourselves against the world’s best, fosters a positive mindset, and reinforces a commitment to quality across our staff, doctors, and the community. It drives everyone to remain at the forefront of medicine, continuously improving their skills, introducing new services, and enhancing the quality of care we provide to our communities.
EF: How is Lenmed adapting to these emerging trends and incorporating new digital technologies and innovations?
AD: I believe the priority, which applies to any business, is to avoid getting swept up by the excitement of new technology. Instead, focusing on understanding the value technology can unlock for us today is crucial.
Undoubtedly, technology will significantly impact how hospitals and healthcare are delivered in the coming decade. But the real question is, how will it affect us right now? Implementing these changes requires substantial investment, and as with any commercially sustainable organization, we need to ensure we are making responsible decisions.
We have created a roadmap for ourselves. Initially, we dedicated much time and effort to building the financial capacity to invest in technologies that offer long-term benefits. If I introduce something today, it might not yield an immediate return on investment. So, we must first create the capacity to accommodate these advancements.
For us, much of the focus has been on using technology to streamline operations, improve productivity, and enhance efficiencies. The savings from these efforts can be reinvested into our longer-term digital transformation initiatives.
In line with our vision of becoming a healthcare provider, not just a hospital provider, we are also currently piloting a product we have developed to optimize the healthcare ecosystem. This platform aims to facilitate communication and seamless information sharing between primary care clinics, general practitioners, specialists, and ancillary services like radiology and pathology while empowering patients with access to their clinical data.
After two years of development, this product is in the pilot phase. Initiatives like these are essential to keep the healthcare system sustainable, given how fragmented the industry has historically been. Everybody operates in siloam, and this is our attempt to break down those silos. We are putting the patient at the centre of the journey and trying to deliver more efficient and effective care.
EF: How do you collaborate with your partners, and what are your current focus areas in these partnerships? What qualities do you seek in an ideal partner to ensure the quality and delivery of your services?
AD: In our journey of diversification and technological advancement, we recognize that our core expertise is in healthcare, specifically as a hospital provider. That is where our strengths lie. So, our approach to diversification and transformation heavily relies on partnerships.
In forming these partnerships, we prioritize finding like-minded individuals and organizations that share our purpose and vision. We must understand each other's goals. When we consider potential partners, it is not just about who offers the best price or deal; that is a short-term outlook. Instead, we focus on building long-term, mutually beneficial partnerships.
True partnerships are about creating lasting relationships, not switching partners every few years for a better deal. We want to build strong, enduring connections. For example, we have carefully chosen our financial partners like IFC because their mission to increase healthcare access aligns closely with our strategic ambitions. The same goes for our relationships with Rand Merchant Bank and ABSA.
We also collaborate with BrandMed due to their innovative approach to healthcare. They bring expertise, complementing our capabilities as traditional hospital operators. We aim to leverage these long-term partnerships to enhance our strengths and achieve our shared vision.
EF: How was your transition taking over as CEO during the pandemic? What was your mission when you first joined the company, and what lessons did you learn to motivate your team and keep them engaged?
AD: When I stepped into the CEO role in March 2020, we had just come off a record-breaking year from a performance standpoint. The plan at that time was to continue on that growth trajectory. However, by the end of March, everything changed dramatically with the onset of the pandemic.
In South Africa, hospitals faced significant financial challenges over the next 18 to 24 months. Unlike other parts of the world where hospitals saw record performances due to COVID-19, our experience was quite different. Most of our business relies on elective procedures, and many people were too afraid to visit hospitals, fearing they would contract COVID. As a result, April, the month after I took over, saw the worst financial performance in our history, with substantial losses.
This put enormous pressure not just on me but on the entire team. There was so much uncertainty—how long would this last? Would we recover? We had financial obligations to meet. Fortunately, the strong partnerships we had built were crucial in helping us weather the storm.
During COVID, our role as a healthcare provider became even more critical, and we had to brace ourselves for the waves of the pandemic. Our team was motivated by the fact that we were making a tangible difference in the communities we serve.
Some key lessons emerged during this time. Firstly, we learned the importance of inclusive leadership. We were navigating uncharted territory, so it was essential to bring together diverse perspectives to find the best possible solutions despite limited and constantly changing information. Secondly, communication was key. We had to maintain open, honest communication with all stakeholders, which helped build trust, even as circumstances changed rapidly. We updated everyone and explained our thought process regularly so they understood why decisions were made.
Lastly, recognizing and supporting our staff was crucial. We had to continuously reassure our team, acknowledge their hard work, and provide them with the tools and support they needed during this challenging period.
For those 18 months, we had to adopt a very different strategy. Many leadership lessons were learned during that time, but as I tell my team now, COVID made us a stronger business. Despite the difficulties, we emerged more resilient from a leadership and management perspective and structurally. We optimized the business during that time, making it stronger moving forward.
EF: What are you the most proud of, and what will your speech look like as you celebrate your 40th anniversary?
AD: If we reflect on where we began, I truly believe we have succeeded against all odds. Very few businesses that started under those circumstances had much of a chance. Many community members who initially invested in Lenmed did so with the mindset of donating, without expecting ever to see a return on their money.
That alone highlights the immense obstacles the business had to overcome over the years. Now, 40 years later, here we are, punching well above our weight and on track to achieve the ambitious goals we have set for ourselves. It is a story that anyone would be proud to be part of.
Many people who have moved on from the company over the years still reflect positively on their time with us. They continue to root for us from the sidelines because they recognize what we have achieved despite the challenges and the continued success we enjoy.
To my team, I say we have done great work, and everyone deserves all the praise they are getting. But we are only halfway there. We have set ourselves the goal of doubling the size of our business in the next four to five years. So, while it is important to celebrate our achievements, we are just getting started—and that is the most exciting part of this journey.
