South African review - Other businesses

Associate company investments

Netcare has several interests in associate companies. In South Africa (SA), the attributable earnings of associates showed a strong turnaround, from a loss of R8 million in 2008 to R17 million profit in the year under review. This reflects the success of our continuing efforts to exit loss-making, non-core investments and to focus on our investment strategy in Public Private Partnerships (PPPs).

Public Private Partnerships

Netcare’s PPPs provide the platform for our commitment to broaden quality healthcare services in the countries in which we operate. We have seven PPPs under management, now all profitable after interest and taxation. The PPPs include:

• Universitas and Pelonomi hospitals (Community Hospital Management);
• Port Alfred and Grahamstown hospitals (Nalithemba);
• Lesotho Hospital (Tsepong);
• UCT Private Academic Hospital (UCTPAH); and
• Bronkhorstspruit Hospital.

Netcare has garnered strong experience in PPPs, starting with the use of public healthcare sector beds in Bronkhorstspruit in 1997, which continues to date. In 2002, we joined a consortium of partners in acquiring the UCTPAH, a private facility and training hospital in Cape Town. We established a co-location PPP agreement with the Free State Department of Health in 2003, the first PPP of its kind in SA, which allows Community Hospital Management to utilise spare capacity in Bloemfontein’s Universitas and Pelonomi hospitals.

Our participation in robust and delivery-orientated partnerships is proving its worth with two PPPs becoming operational during the year. In SA, the Port Alfred and Settlers hospitals PPP with the Eastern Cape Department of Health commenced operations, with both hospitals featuring public and private facilities.

The Port Alfred Hospital, completed in March 2009, was rebuilt from the ground up and offers the local community state-of-the-art medical facilities. The refurbishment of the Settlers Hospital in Grahamstown was completed in August 2009, and included the construction of a new private wing. The public and private wings share a number of upgraded facilities. At both hospitals we will continue providing facility management and soft services.

The private vehicle for the partnership is Nalithemba hospitals, which will be responsible for managing both the public and private hospital facilities for 15 years.

Outside South Africa, Netcare is leading a consortium of partners in building a new public hospital for the Government of Lesotho, the largest healthcare PPP in Africa to date. This landmark project includes the refurbishment of three filter clinics in addition to the new hospital in Maseru, with the entire project scheduled for completion in mid 2011.

Other associates

Other associate investments include KOPM Investment Holdings (the holding company for Lesedi Hospital in Soweto), Kokstad Private Hospital and Optimed.

Joint venture investments

National Renal Care

National Renal Care (NRC) is the largest private dialysis provider in SA with a network of 54 dialysis units, seven dedicated peritoneal dialysis units and seven specialised acute therapy teams. NRC is a 50% joint venture between Netcare and Adcock Ingram.

NRC has adopted a total disease management philosophy. It offers chronic haemodialysis, peritoneal dialysis, acute haemodialysis, continuous renal replacement therapy and plasma exchange therapy. NRC supports this range of therapies with the Healthy Start Programme (HSP), a kidney disease prevention and management programme for patients at risk of kidney failure, patients with kidney disease and patients at risk of developing kidney failure. The programme includes testing blood glucose, measuring blood pressure and screening for kidney function; dietary and lifestyle modification; education; patient and family counselling; and the monitoring of blood results.

NRC recorded a 23.5% increase in chronic dialysis sessions and a 27.4% increase in acute sessions. More than 6 000 patients were screened and nocturnal dialysis commenced at the N1 City facility, a first for SA.

Patient education and support remains one of our key areas of focus. NRC hosted several support groups and patient forums nationally. Patient workshops were also held in Cape Town and Johannesburg, with patients attending from the public and private sector.

NRC is committed to improving access to dialysis in SA. During the year, a number of Public Private Initiatives were successfully negotiated. Government hospital dialysis patients are treated at NRC facilities in George, Paarl, Rustenburg, Ladysmith and Port Elizabeth. NRC also provides acute dialysis services at various public facilities countrywide.

NRC expects the number of dialysis patients to grow, considering SA’s high levels of HIV, diabetes, hypertension and obesity, all precursors to kidney disease.