Netcare has expressed concern about the possibility of the outbreak of the fourth wave of Covid-19 infections in South Africa after the private hospital group was battered by successive waves in the past year.
Netcare on Friday said that the Covid-19 related costs had continued to weigh on its margins for the year ended September, 30, 2021, given the higher prices paid for PPE due to global supply shortages and uncertain lead times.
This was in addition to absorbing lower activity levels throughout the pandemic as Netcare had to temporarily suspend elective surgeries at the height of the second and third waves to deal with rising Covid-19 cases.
Since the onset of the pandemic in March 2020, Netcare has treated 126 130 Covid-19 patients and admitted 54 474, with 25.6 percent being treated in High Care or Intensive Care.
Netcare said, inventory levels continued to decline as the higher-priced PPE and drugs procured during the first Covid-19 wave were consumed, with an overall reduction of approximately R550 million in inventory balances since September 2020.
“The challenges of weathering significant rolling waves of Covid-19 and the short recovery periods between waves have impinged on our momentum towards a full recovery to pre-Covid-19 levels,” Netcare said in a trading update.
“However, average full week acute hospital occupancies continued to improve in the second half of 2021 to 58 percent compared to 53.8 percent in the first half, and 42.8 percent in the second half of 2020.”
Netcare said that in the absence of a fourth wave, further stabilisation of hospital activity was anticipated due to enhanced patient sentiment and growth in elective procedures.
Sasfin portfolio manager Nesan Nair said Netcare had seen a “massive increase” in the number of patients that checked in during this financial year.
“They are pointing towards a much more improved financial performance,” Nair said.
“Of course they have been very busy, but just on the patients numbers mentioned they seem to be quite positive that they have managed to make several breakthroughs and looking to grow their business in the next few years, obviously based on the impact the Covid-19 pandemic has had in the last year and a half.”
Meanwhile, Netcare said it had adopted a conservative approach in electing to impair its Lesotho-related investments in the amount of R30 million.
This was in light of the early termination of the Lesotho Public-Private Partnership agreement by the Government of Lesotho and ongoing uncertainty with regard to the resolution of matters under dispute.
It said provisions for impairments of property assets of approximately R70m will be recognized in the 2021 financial year results, the majority of which relates to the Union and Clinton hospital buildings which will be vacated on the opening of the new Netcare Alberton facility.
Netcare will provide the group’s financial performance for 2021 and the outlook for the 2022 financial year in the audited group results on Monday, November 22.
On the other hand, the Actuarial Society of South Africa (ASSA) predicts that South Africa is expected to hit the country in December 2021 and into January 2022.
According to ASSA’s Actuary Adam Lowe, there is sufficient evidence to suggest that a fourth wave is likely to emerge in December.
“The logistics of the rollout would have to be significantly enhanced to ensure vaccines reach especially the rural and less technologically enabled population, as well as overcoming the vaccine hesitancy and outright anti-vaccine sentiment which still exists.”
Lowe cautioned vaccinated people against letting their guard down too quickly because one of the potential triggers of a severe fourth wave that cannot be disregarded is the potential of a new variant emerging against which the existing vaccine could provide insufficient protection.
This Covid 19 awareness article was produced with the Journalists for Human Rights support.