Read the Conversation
EF: What are Life Healthcare Group's top priorities for 2023?
PW: Improving accessibility and affordability of healthcare is becoming increasingly important in growing economies like South Africa. Unhealthy lifestyles are driving the increase in the incidence of non-communicable diseases, with healthcare trends reflecting a continued increasing demand in non-acute settings. To provide more services to more people in the healthcare industry without compromising on quality, we need to come up with innovative solutions to reduce costs.
The most significant shift in the delivery of services that Life Healthcare is making in its South African operations is to increase patient volumes through our current infrastructure by creating better access. The most significant shift in the delivery of services that Life Healthcare is making in its South African operations is to increase patient volumes through our current infrastructure by creating better access. When one considers the capacity of private hospitals in South Africa, we had more than 40 percent of that capacity available during the COVID pandemic and that was not being used. Pre-COVID, we had roughly 35 percent of our capacity available that was not being used.
Alternative reimbursement and partnership models which ensure a better alignment of incentives between providers and funders are key to raising occupancy levels, where organisations such as ours need to provide products at lower price points in greater volumes. We firmly believe that for the South African government to fulfill its promise to deliver NHI it will take collaboration amongst all stakeholders. We are actively looking for ways to present partnership models to the government that would enable it to make use of the private sector's ability to provide healthcare for state patients. This is an area that is rapidly gaining importance in South Africa.
The delivery of value-based care products along the care continuum, not just in the acute hospital setting, is an essential objective for us because, as we all know, medical technology and clinical care are meant to keep people out of the hospital for as long as possible. To better coordinate treatment outside of the acute environment, we have developed an integrated renal care product and, in collaboration with a leading global technology company, we are implementing a clinical management system in South Africa. We consider technology as a critical enabler for both goals. In less than 18 months, our clinical management system would have been implemented for the first time in all of Africa, and it would have been utilised to coordinate the delivery of our integrated renal patient care program for all our chronic renal patients.
We recognize that this is only the first step. By utilizing the clinical management system, we not only increase the level of collaboration between the care providers—that is, between ourselves, the nephrologists, and the other clinicians involved in the care pathway—but we also incorporate patient behavior to improve clinical outcomes and cut costs. Our partnership with the global technology company’s solution has been a major driver of the technology needed to achieve this coordination. The use of our clinical management system for chronic patients who seek care outside of our acute care facilities is just the beginning. Improved care coordination could reduce the need for future hospital admissions if the care is provided expertly.
The third component is to find ways to reduce the cost of care. This requires engagement with funders and moving toward some risk sharing with financial rewards being based on clinical outcomes instead of the conventional fee-for-service model. In this area, our team has been particularly innovative in the design of value-based care contracts. For example, we negotiated our first renal value-based care contract with South Africa’s leading medical scheme. It promotes improved patient outcomes and shared value while providing the patient with the holistic care that they require. It is not surprising that the South African landscape is dynamic and ever-changing given that the country has a sophisticated healthcare system and is adapting to demographic and societal needs.
EF: How can we increase awareness of the importance of VBC?
PW: When value-based care products are delivered in accordance with their design, we see that cost reduction is achieved through eliminating the vast variations in the delivery of care and entrenching the use of evidence-based standardised care plans (or integrated care pathways) which allows for access to comprehensive bundles of healthcare services at a fixed cost while maintaining high quality of care and improved patient outcomes. We have to be regularly engaging and building partnerships around risk transfer, cost efficiency, and alignment of provider incentives around patient outcomes to increase awareness of the benefits.
We believe that now is the time to move towards this approach because it is a self-balancing mechanism where risk and reward are equally traded off across a complicated operational model that aligns all the interests. Although it will not happen overnight, moving in that direction is a reasonable method to ensure that healthcare expenses are controlled without compromising quality.
In the fee-for-service environment, cost-cutting measures could be taken to reduce expenses, but there would be a price to pay in terms of access to care. Under a value-based care contract, if the clinical outcomes worsen the provider may be penalised. It is self-balancing, which is why it is a crucial move that must not proceed too quickly because you cannot afford for this to fail.
EF: In addition to the tech partnership, what other partnerships are you pursuing to improve access and innovation within your facilities?
PW: Healthcare delivery is not only a partnership between doctors, healthcare providers and healthcare funders, but includes various other providers required to provide quality patient care. We understand that the healthcare environment is shifting and that the current healthcare system is not sustainable without transformative change. Transformative, sustainable change can only come in partnership and with the supply side actively driving the change, as the supply side is the custodian of patient care, tangible assets, operating capabilities, and doctor relationships. We can only achieve sustainable change when we align our strategies with funders, to address pain points experienced by both parties and in so doing improve patient care and outcomes.
To this end, we have concluded significant funder network deals with more than five of South Africa’s leading medical schemes and/or administrators which makes us a leading anchor provider for acute care. Essentially, this approach is a value-sharing philosophy where we design value-based care products that deliver holistic care to keep patients healthier, with better quality of life and reduced hospital admissions. This creates value for patients, providers, schemes, and the wider South African healthcare system.
EF: What are the lessons you can bring from the UK and Western Europe to South Africa, and what are the most important lessons your brand can bring from South Africa to the UK and Western Europe?
PW: We have applied the lessons from our foreign business venture, Alliance Medical Group, to South Africa in two very particular areas.
One is that our experience abroad means we have the knowledge and know-how to introduce a business model locally where we can support existing radiology practices by providing non-clinical support services, allowing radiologists to focus on the provision of their professional clinical services to patients. We believe that this model will assist with improving access and affordability of diagnostic imaging (radiology) services in the hands of both patients and funders and make available technology, which together with radiologists will enhance the practice of radiology.
This has been part of our local diversification strategy which is already playing out with the acquisition of non-clinical services of several radiology units. Our most recent acquisition is TheraMed Nuclear which provides nuclear medicine services such as positron emission tomography–computed tomography (PET-CT) and SPECT-CT (single-photon emission computerized tomography–computed tomography).
The second dimension of healthcare is more complicated, yet it is an area where we are leaders in the global market. We have a sizable footprint of cyclotrons (which manufacture radioactive isotypes for imaging purposes) in Europe and are the largest single provider of PET-CT work in the United Kingdom. There are 11 cyclotron locations in Europe, (five in the UK and six in other parts of Europe) and are the largest single provider of PET-CT services in the United Kingdom.
Radioactive isotypes are needed for PET-CT scans which assist with early identification and diagnosis and enable clinicians to formulate more precise treatment plans for diseases, which we know are seen as being extremely vital, particularly for oncology. The United Kingdom, Italy, Ireland, Spain, and other countries recognise the importance of this protocol. South Africa uses PET-CT at a rate which is around 1/20th of what developed markets in the Northern Hemisphere are using for cancer diagnosis. The data clearly highlights that South Africa falls behind other countries in the utilisation of PET-CT services for more effective investigation and management of cancer. The infrastructure is inadequate, so we have already decided to build two cyclotrons in Johannesburg with the capacity to meet South Africa's needs for isotope delivery. There is a significant gap in the use of PET-CT in South Africa based on a variety of factors including but not limited to; the indicated use in SA guidelines, the provision of PET-CT scanners across the country and the sometimes unreliable and expensive supply of radiotracers. The industry needs to drive for widespread adoption of PET-CT technology in South Africa, catching up with global best practices. This is why we are also establishing a PET-CT diagnostic network throughout South Africa so that we have the ability to conduct PET-CT scans as well.
We would not have been able to make these investments in South Africa without the knowledge that Alliance Medical brings. These two instances of inbound expertise are excellent.
With regards to outbound expertise from the Life Healthcare world into our international businesses, they have been much more around the corporate finance and corporate organisation of the structures that deliver care as opposed to inbound clinical expertise. In summary, the knowledge that can be transferred to South Africa is clinical and operational expertise, and corporate finance, and organisational expertise are learnings that would be taken to our international businesses.
EF: How can the nurse shortage situation in South Africa be improved?
PW: Life Healthcare was the first organisation to publicly acknowledge and address the nursing shortage more than a year ago. The remainder of South Africa's healthcare providers have only lately made the same realisation. Without nurses, we would have no business, and according to our calculations, South Africa is currently lacking anywhere between 26 000 and 60 000 nurses.
We know that the International Council for Nurses has reported that the world could be short of about 13 million nurses by 2030. In South Africa private hospital operators such as Life Healthcare, Netcare, and Mediclinic have the capacity to train more nurses but our hands are tied due to the bureaucracy. We are not receiving permission from the South African Nursing Council to increase the numbers to train more young nurses.
You end up in a world where it is ludicrous that the problem statement is so obvious and the capacity to address the problem statement is available and the decision-makers in government are refusing to give authorisation. We are making some bold steps in the country together as a combined private initiative to put pressure on the decision-makers. If needs be, it will go to court to have them give us the correct decision, which is to train more nurses, and that is not only about bolstering the clinical capability of the country but about creating jobs for young people in a country that has high levels of unemployment. The math is undisputed. We are short of nurses. The way of solving the problem is clear. The private sector can train about 5000 nurses a year altogether.
EF: How is AI changing the hospital landscape? Do you see hospitals making use of a hybrid model similar to telemedicine?
PW: Telemedicine in primary healthcare and mental health are obvious avenues of cost-effective care with the next level of care being delivered by nurse-led operations on the ground. Mental healthcare also lends itself to the modality. In fact, I am told patients feel more comfortable in some of the mental health situations dealing like this as opposed to the trauma of face-to-face consultations. In the context of acute care and particularly acute medical care, I cannot see telemedicine playing a role there.
In the context of acute surgical care, AI is increasingly used to improve clinical efficiencies, for example, robot-assisted laparoscopy of which we have an extensive deployment in South Africa. Perhaps the biggest single moment of truth for AI in healthcare is the algorithms that are built into radiology. In that sense, we are seeing AI assist with the triage of scans in the radiologist workflow in order to make their work more efficient and provide the next level of comfort through clinical decision support in high-volume radiology settings.
We have seen that play out in some of our locations in Italy and in some of our occupational health solutions delivery in South Africa. The use of an algorithm to detect tuberculosis in X-rays as an example is starting to become more pervasive and it makes the accessibility of that diagnostic more available. In the context of broader telemedicine, acute hospital settings are less inclined to utilise telemedicine, but AI-assisted surgical and medical processes are already being utilised, such as our Ethos radiotherapy system, the first in Sub-Saharan Africa, which uses AI and adaptive treatment to adjust cancer treatments in response to patients’ unique, changing needs.
EF: Is there any final message you would like to deliver to our audience and the healthcare community?
PW: As we see healthcare models evolve across the world and the increasing demand for care and the pressure placed on governments to take care of the citizens, the only way that we will solve this is where private and public health sectors establish partnerships for the delivery of care into the nation. Where the public and private health sectors do not cooperate, national healthcare initiatives will be compromised.
I would like to see a goal-oriented partnership seeking discussion between high-level private care providers and the public health officials who care deeply for the citizens, I want to see more partnerships develop, not just in South Africa but around the world.
