Risk report - Key risks
The major risks identified as being business critical for the sustainability of the South African operations are:
| Risks |
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Risk mitigation |
| Industry regulations, legislative environment and funder regime |
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Changes in healthcare industry regulation and general legislation impacts on the industry landscape and competitive environment, the most significant of which is pricing risk which incorporates:
- Price regulation;
- Collective bargaining; and
- Designated service providers.
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The Group continuously monitors the regulatory and legislative environment. We engage with regulators on policy decisions to enable proactive amendments to the strategy and business model. |
| Additional risks relating to the funder regime include alternative reimbursement models and the consolidation of smaller schemes into larger schemes. |
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The Group continuously engages with medical schemes to negotiate outcomes which are mutually beneficial. |
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| The impact of the proposed National Health Insurance (NHI) remains unclear. |
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The Group continues to participate in the NHI debate. |
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| Availability and quality of skills |
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| Shortage of skilled healthcare professionals, including pharmacists, nurses, doctors, specialists, paramedics and emergency services doctors. |
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The Group has embarked on various recruitment and employee retention initiatives.
Netcare Education provides nursing training and education to students and currently provides almost 25% of all newly qualified nurses countrywide. |
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| Fire |
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| Fire poses a risk to the safety of patients and employees. |
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The Group continues to be proactive in ensuring compliance with fire safety regulations and Occupational Health and Safety standards. |
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| Infection break-out |
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| A pandemic or widespread infection break-out that challenges the current infection prevention protocols. |
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The Group has a tested and documented major incident management plan, pandemic outbreak policy and pandemic plan to ensure business continuity and ongoing quality patient care.
The Group has infection prevention protocols that are enforced and monitored daily to ensure compliance with the Group’s Infection Prevention policies. |
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| Information technology (IT) |
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The Group is dependent on the information technology environment which enables critical business processes. |
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The Group has appointed employees with the appropriate level of skill to maintain the stability and integrity of the current information technology environment.
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| The roll-out of the SAP Enterprise Resource Management application to replace current legacy systems is a large and complex project that needs to be appropriately managed for successful implementation. |
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A dedicated task team has been assigned to ensure the successful roll-out of the SAP Enterprise Resource Management application. |
The Group Risk Management division regularly engages with key stakeholders across our operations to identify key risks to specific business units and ensure that high risk exposures are appropriately managed.
Details on the Group’s financial risk management are included in note 32 to the annual financial statements.
The Group will be enhancing its risk reporting in the 2010 annual report through separate disclosure of the key risks affecting the South African and United Kingdom operations.
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