Growth – South Africa
Our growth objectives are supported by a number of key initiatives in southern Africa, including expanding our complementary services footprint, building an imaging services business by leveraging Alliance Medical’s expertise, and delivering an outpatient care model that offers convenient, affordable and quality care by using state-of-the-art technology and outstanding clinical employees.

OUR 2019 PRIORITIES		OUR PROGRESS
Doctor recruitment and retention		Recruited 200 new doctors to replace those who retired during the year Appointed a Doctor Stakeholder Manager to drive doctor recruitment, retention and training initiatives
Growth opportunities in our complementary services division		Invested in our facilities to retain our competitive edge Expanded our renal dialysis and oncology offering
Continue to expand across the healthcare continuum		Exploring cost-effective approaches to offering better primary healthcare services, with the first concept clinic piloted at Campus Square in Johannesburg, as well as a second standalone clinic in Kenilworth linked with a large retail pharmacy. In partnership with a large retailer, MyLife Healthcare Centres have opened at On Nicol in Bryanston and Constantia in Cape Town, with additional clinics launching in Steeldale and eMalahleni by the end of 2019. The first MyLife container clinic opened for business in November adjacent to Life Brenthurst Hospital
Develop and launch new clinical products		Continued to develop and launch new clinical products in partnership with our clinicians and funders to secure our market share
Continue with upgrades at select facilities, as well as the replacement and maintenance of oncology equipment and the introduction of high-tech robotic systems		Successfully completed upgrades to Life Anncron Hospital, as well as significant ward upgrades at Life Entabeni Hospital, Life Mount Edgecombe Hospital and Life Eugene Marais Hospital Installed the new Da Vinci surgical robotic system at Life Kingsbury Hospital Upgraded the theatre complex at Life Groenkloof Hospital Replacement of the radiation oncology machine at Life Rosepark Hospital
Participate in government tenders to provide medical services within the acute sector		Engaged with government at various levels (provincial and national) to build stronger relationships and explore opportunities to assist government in providing healthcare services Successful agreement reached at Life Anncron Hospital to provide services to local government in the field of cardiology
Focus on growing appropriate preferred network deals with funders		Intentionally explored opportunities to increase network deals with private medical insurers on appropriate commercial terms with DSPs
Engage funders on the introduction of several clinical products to secure market share		Continue to expand our clinical products offering, having introduced a maternity pilot with a major funder from 1 January 2020
Opening of Life Brackenview during the second quarter of 2019		Opened the new 80-bed mental health facility Life Brackenview in April 2019
Integrate and grow our Life Employee Health Solutions offering		Continued with the integration of Life EHS service offering to current clients as well as focused expansion across multiple industries through consolidation of structures, operational optimisation and strategic sales strategy implementation Offering value-added services into the acute hospital business including, for example, call centre support for Major Joints for Life and trauma debriefing services for Polmed members (police and their families) who have been affected by a traumatic event in the line of duty Initiatives under consideration include cardiac rehabilitation, homecare, health risk management and wellness support to our medical practitioners

OUR 2020 PRIORITIES

Continue to focus on doctor recruitment, retention and training Increase the portion of our revenue sourced from non-acute Focused bed growth in select acute hospitals Expand geographic presence of our complementary services division Introduce new products across acute and complementary services Expand our presence in the imaging services market Expand across the continuum of care into primary care provision, sub-acute, outpatient care, homecare and broad-based wellness Continue to engage funders on the introduction of several clinical products to secure market share Embed our information technology (IT) strategy to optimise performance Further execution of efficiency projects started in 2019

Hospital division

In 2019, our PPDs increased by 0.8%, in comparison to a growth of 1.1% in 2018, mainly driven by doctor recruitment gains over the last two years, network gains and an increase in acuity from surgical cases. Occupancy levels remained at 69.7% (2018: 69.7%). Our complementary services division is the fastest growing segment of the southern African business, with a 14.7% compounded annual growth rate in revenue over the past four years. This year saw significant growth in medical admissions, as opposed to a decline therein during 2018, the majority of which took place during the winter months.

Indicator	Year-on- year trend		2019		2018		2017
PPDs1,2			2 269 756		2 251 600		2 226 337
Occupancy3 (%)			69.7		69.7		70.0
Length of stay (LOS) (days)4			3.76		3.72		3.71

1	PPDs refers to a unit of time during which the services of the institution or facility are used by a patient.
2	This indicator is externally assured.
3	The number of beds in the Group utilised by patients.
4	The average amount of time spent in hospital per patient visit.

 

PPD GROWTH		SOUTHERN AFRICA OCCUPANCY (%)		SOUTHERN AFRICA (% of beds)

PPDs BY PATIENT AGE (’000)

During the year, considerable effort went into optimising the existing facilities in our hospital division. To this end, we successfully completed upgrades to Life Anncron Hospital, including opening an ICU in March 2019 and a new cathlab in November 2018. We believe that our investment in this new cardiac facility fills a gap in the market, and we are particularly excited about the opportunity to offer bypasses, angiograms and other specialised services to the community surrounding the hospital. We also recruited two cardiologists and a cardiothoracic surgeon to this facility.

As part of our focus on improving our operating model, leveraging our existing assets and scale, as well as our expansion across the continuum of care, we piloted a new primary healthcare clinic concept at Campus Square in Johannesburg. This model offers convenient and affordable quality care and world-class clinical protocols that are enabled by advanced technology and outstanding clinical employees. We have received encouraging patient feedback thus far, with a patient experience score above 9.6, and were able to pilot and implement new products and services to just under 4 500 customers. A key learning from our pilot was the amount of space required for an optimal performing clinic and the decision was made to relocate the Campus Square clinic to Life Brenthurst Hospital in November to implement our first container clinic. As part of our strategy to explore partnerships to facilitate scale and geographic expansion, MyLife has partnered with a large retailer. We have launched clinics at On Nicol in Bryanston and Constantia in Cape Town with Emalahleni and Steeldale coming on line before the end of the year. An additional standalone clinic implemented in Kenilworth aims to test a different market segment and new services.

In 2020, we will focus on improvements to certain of our hospitals, with Life Wilgeheuwel Hospital undergoing a major refurbishment. Furthermore, we aim to secure our growth by expanding our mental health, acute rehabilitation and renal dialysis offerings, either through repurposing existing infrastructure or optimising utilisation.

	During the year, we focused on refurbishing our infrastructure to drive an increase in occupancy. A limited number of brownfield beds opened during 2019 where local demand dictated such an opportunity. We are also exploring ways to repurpose or reconfigure existing infrastructure to optimise utilisation.
	No additional beds were added during the year. However, we experienced high occupancies in our acute rehabilitation facilities. We are exploring opportunities to add capacity.
	This year, we focused on select mental health growth. We completed the construction of and opened a new 80-bed facility at Life Brackenview, which complements our existing facilities and adds to our geographic network of mental health facilities.
	Growth in our renal dialysis offering centred around expanding chronic stations around the country, providing more acute renal dialysis in our hospitals, and growing through improved utilisation of existing renal dialysis facilities.
	We remained challenged in this area of our business due to tough market conditions and increased competition. However, we believe that our oncology business has the potential for value creation in the long term. During the year, we appointed a Clinical Head of Oncology to review our current operating model as we move towards a comprehensive oncology delivery service. While we have an established footprint in the oncology space, we are focused on optimising our facilities and increasing utilisation. Our specific focus will be on increasing stereotactic cases at three of our facilities, recruiting oncologists and increasing occupancies of our hospitals.

 

 

Category			Total 2019			Locations
Capacity expansion at existing facilities			49			Life Entabeni Hospital
						Life Fourways Hospital
						Life Gaborone Private Hospital
						Life Oncology at Life Eugene Marais Hospital
						Life Peglerae Hospital
Mental health beds			80			Life Brackenview
Total beds			129
Renal dialysis stations			11			Life Rosepark Hospital
						Life Springs Parkland Hospital
						Life Vincent Pallotti Hospital
						Life Robinson Private Hospital
						Life Gaborone Private Hospital

 

Healthcare services division

Life Esidimeni

Life Esidimeni has delivered healthcare and related services to the public sector for over five decades, and our primary aim is to cultivate a dignified therapeutic environment. We focus on patient-centered compassionate services, which ensures that we are able to provide the highest level of care to the patients entrusted to our care.

We partner with the government to provide professional, quality and cost-effective healthcare services to the most vulnerable segment of South Africans. We also provide frail care and substance abuse recovery services, and we are a third-party primary healthcare provider for the department of correctional services. We operate across five provinces, and have a total of 3 119 registered beds in 10 facilities.

Our focus during 2019 was on stabilisation rather than growth, and we successfully secured long-term contracts to replace month-to-month agreements.

Life Employee Health Solutions

Our Life EHS service offerings include occupational healthcare and employee wellness. Overall, our Life EHS business performed well in terms of revenue growth, but margins remained under pressure due to pricing pressures and macro-economic headwinds in South Africa. In response, we initiated an organisational realignment process to ensure that Life EHS is optimally structured to meet market requirements and deliver on strategic plans aimed at diversifying our healthcare solutions.

In 2019, Life EHS launched various new service offerings. This includes Injury on Duty Case Management, as well as the integration of Emergency Medical Services (EMS) into our National EMS contact centre. With this integration, we have employed dedicated 24-hour, seven-days-a-week emergency medical services contact centre agents. Our focus is on aligning ourselves with promulgated legislation (National Health Act, EMS Regulations), and to offer bespoke integrated services to our existing and new clients.

Life EHS is the country’s leading provider of contracted on-site occupational and primary healthcare services to large employer groups. Pleasingly, the business retained existing clients, while also increasing the number of lives covered as a result of contracting with new clients. The number of lives increased by 2.6%, from 578 756 in 2018 to 593 671 in 2019.

Our Life EHS clinics operate in terms of the Occupational Health and Safety Act, 85 of 1993 (OHS Act). We have International Standards Organisation (ISO) 9001:2015 and British Standard Occupational Health and Safety Assessment Series (BS OHSAS) 18001:2007 certifications and operate on-site, off-site and mobile clinics throughout the country. Our offering, which includes aspects such as occupational risk assessments and the management of injuries on duty, allows employers to comply with relevant legislation and administrative requirements. More than this, however, our flexible approach enables bespoke and tailormade packages to suit the individual needs of our corporate customers.

Our wellness business continued to gain several new contracts and clients during 2019. The number of lives under administration increased by 4.2%, up from 367 670 in 2018 to 383 082 in 2019. We continue to strengthen our employee wellness network of affiliates, with a focus on enhancing our geographic footprint to reduce costs required to service clients in remote areas of the country.

For more information refer to our employee wellness programme.

Going forward, we will continue to integrate the service offerings of Life EHS, enhancing our contract value propositions and focusing on core digital requirements to enable efficiency and growth.

For more information refer to our Life Employee Health Solutions offerings.