Read the Conversation
EF: What will be the main topic in South Africa in 2024?
PW: Hospitals continue operating without interruption. Regardless of political distractions, our focus remains on patient care. The evolving landscape prompts questions about the government of national unity and the ruling party's future majority and its impact on healthcare policies like the National Health Insurance (NHI). However, our commitment to providing quality healthcare remains steadfast. As one of South Africa's leading hospital providers, we're dedicated to expanding services and growing our footprint. We recently acquired 46 renal dialysis clinics from Fresenius Medical Care (FMC). We are also expanding our diagnostic imaging business, investing in nuclear medicine, PET-CT, and cyclotron delivery. This demonstrates our commitment to the continuum of care while expanding patient services and growing non-acute revenue centres. It's exciting to see our organisation taking value-based healthcare seriously through network deals expanding non-hospital services, and setting the stage for further growth. Overall, we're witnessing a significant shift in how South African hospitals are managed, focusing on funder network expansion and revenue diversification.
Internationally, we recently completed the sale of Alliance Medical, an imaging and diagnostics business, however, we still have an investment in Life Molecular Imaging (LMI), who own Neuraceq®, an FDA-approved Alzheimer's disease diagnostic imaging agent marketed in the USA, Europe and several other geographies. We're optimistic about its progress, and this can be seen in the increase in sales since the approval of a new class of drugs being approved by the FDA for Alzheimer’s. Thanks to reduced borrowings from past transactions, our strong balance sheet positions us well to seize market opportunities. This marks a shift from our previous fully invested stance, opening doors for new ventures alongside our core hospital operations. Looking ahead to 2024 and beyond, we're focused on our core strengths as a hospital provider while expanding into complementary and adjacent services to our network of hospitals.
EF: What must we do to rebuild trust and continue collaborating in the healthcare industry?
PW: Regarding trust, we need to consider various dimensions. In the healthcare industry, trust between different stakeholders is crucial. In South Africa, trust between the government and private healthcare providers is vital for the future of healthcare, especially regarding National Health Insurance (NHI). Building and maintaining this trust is essential for the success of the NHI. Our efforts to engage with the government are significant, even if they are not always acknowledged.
Additionally, trust between healthcare providers and funders, such as medical insurers, is crucial. Funders need to see us as cost-effective and efficient in providing healthcare to patients. Demonstrating our expertise and value-based care delivery is the key to maintaining trust and support from funders.
Another crucial aspect of trust is between Life Healthcare and the clinicians who work in our hospitals. Our primary customers are our doctors, and they need to trust us so they can bring their patients to us. Similarly, skilled nurses must trust us to want to work in our facilities. Trust between doctors and nurses is critical to the success of our business. Additionally, the overall brand and reputation of Life Healthcare are essential for patients admitted to our facilities to trust us. Trust is vital across all levels, including with the employees who make our infrastructure work daily. Without trust, the healthcare system cannot function effectively. It's a topic that has been around for years and will continue to be very important.
EF: What do you see for the future, and what are you most excited about that is upcoming?
PW: Looking ahead, we must remember the vastness of Life Healthcare’s hospital business, with over 9000 beds and 64 complexes. Our key focus will remain on these big operations and our responsibility to over 600,000 patients annually. Outside the hospitals, exciting opportunities are emerging, especially in specialist treatments. Our scale allows us to explore these pathways faster than competitors, potentially increasing our market share and revenue, while improving clinical delivery. While this is exciting, we must balance it with our existing responsibilities. The management team is energised by these new prospects alongside our current commitments.
EF: What’s your perspective on future hospitals and what they will look like with the evolution of telemedicine? And how are you implementing digitalization and AI in your hospitals?
PW: Hospitals will remain largely unchanged for many years; they will still have nurses, patients, and beds. While the surroundings may evolve, hospitals themselves will mostly stay the same. Some procedures are moving to day clinics, and more complex procedures like knee replacements, which used to require multiple days of hospitalisation are being reduced substantially without compromising on care. As technology and medicine advance, hospital stays will likely decrease, but the severity of cases treated in hospitals will increase. While hospital procedures may evolve, the physical hospital complexes will remain constant.
Regarding technology in hospitals, it's important to remember that it won't replace doctors and nurses. Technology should assist them, much like pilots with aeroplane technology. Hospitals must use technology to become more efficient, especially in administrative tasks like billing and patient inquiries. AI's role in medicine differs between clinical use and hospital operations. Doctors will determine how AI assists in diagnosis and treatment, while hospitals can use it to improve administrative efficiency. Life Healthcare supports technological advancements, especially if it benefits patient care and operational efficiency.
From my perspective, telemedicine poses a real challenge. During the COVID pandemic, telemedicine usage increased when doctors couldn't see patients in person but decreased once they could. Many doctors are only comfortable diagnosing by physically examining patients. In our hospital setting, we only handle acute cases and specialist procedures, so remote monitoring for coronary angiograms isn't feasible. However, telemedicine benefits organisations like Unjani clinics and InterCare, where it improves accessibility, especially for remote patients. For example, a pregnant woman in a remote area can receive advice remotely, which wouldn't otherwise be accessible. While telemedicine improves accessibility and affordability, it won't replace in-person consultations, especially in complex cases. Nonetheless, it has a place in certain healthcare settings, particularly for primary care cases where remote diagnosis and prescriptions are feasible.
EF: What are the opportunities to increase the number of beds occupied?
PW: We finalised network deals with three major funders about a year ago. These agreements assign insured members needing hospital care to Life Healthcare under their lower-end plans. This means around 2.5 to 3 million insured patients will be directed to our hospitals when necessary. We aim to increase hospital volumes and make healthcare more accessible and affordable by offering lower prices for higher volumes. This benefits the patient, the funder, and Life Healthcare, creating advantages for all involved.
EF: What is your final message from Life Healthcare?
PW: The focus in healthcare is on making it more accessible and affordable without compromising quality or patient experience. Value-based care models are key as they prioritise a patient-centric experience while reducing costs for funders and providers. When care pathways are managed effectively, it benefits everyone involved, balancing clinical care and profitability. We believe this approach offers a balanced solution to a challenging question in society.
