LIFE HEALTHCARE Integrated report 2021

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Creating value for our stakeholders

Our success and sustainability depend on our positive relationships with, and support of, our key stakeholders. It is essential for us to engage, understand and be responsive to their needs and interests whilst also delivering value to them, in the short, medium and long term.

Our stakeholders

Material matters key:

1 COVID-19

2 Business disruptions due to social   unrest  and  shortages of critical supplies

3 Labour relations and
   employee retention

4 Healthcare funders and the cost of care

5 Specialised skills shortage

6 Quality of care standards

7 Portfolio performance

8 Government relationships

9 Increased regulations

10 Cyber-security and data protection


Stakeholder value creation

Positive
Stable

OUR KEY STAKEHOLDERS

patient
Patients

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

>95% patient satisfaction in AMG

Excellent clinical quality outcomes

1.9 million paid patient days (PPDs)
117.2 million theatre minutes
176 000 renal dialysis treatments
27 000 births
1.2 million diagnostic scans by AMG
What our stakeholders care about
  • Cost and quality of care
  • Reputation and quality of doctors, specialists, healthcare and other service providers
  • Capable and caring nursing employees
  • Clinical pathway experience
Our response
  • Patient surveys
  • Publish quality metrics
  • Training of nurses, doctors, specialists
  • Standardisation of cost-effective pathways, processes and measurable outcomes
  • Ongoing investment in facilities
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patient
Employees

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

R7.2 billion in salaries paid (2020: R6.7 billion)

R158 million spent on training (2020: R224 million)

645 nurses trained (2020: 855)

9 322 nursing employees
c.8 000 other permanent employees
81.4% of total employees are female
77.9% of total employees are ACI
What our stakeholders care about
  • Fair remuneration and reward
  • Job satisfaction
  • Training and development
  • Transformation, diversity and inclusion
  • Quality of patient care
    • Caring employees
    • Safety
  • Support during COVID-19
Our response
  • Market-related remuneration and reward
  • Market-related remuneration and reward
  • Long-term incentive plans across all employee categories
  • Accelerated employee pay rises for 2022 to 1 September 2021
  • Assisting employees with ongoing professional training and registration fees
  • Vaccination sites
  • Wellness programmes
Link to material matters
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doctors
Doctors and specialists

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

Access to our world-class facilities and advanced medical equipment

Bursaries and training to facilitate upskilling

Through our partnership model, we enable doctors and specialists to provide excellent care to patients

c.3 000 doctors, specialists and
healthcare professionals working
in our facilities
What our stakeholders care about
  • Quality of nursing
  • Quality of facilities
  • Clinical governance
  • Infrastructure and technology
  • Medical liability insurance
  • Financial security
Our response
  • Strengthen doctor and specialist engagements and support
  • Use data and analytics to drive compliance with pathways and formularies
  • Doctor shareholding
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Health care
Healthcare funders

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

Business model to deliver high-quality, cost-effective care

Our differentiated service offering

Designated service provider (DSP) network deals in southern Africa and innovative pricing models

73.2% of our acute hospital revenue in SA comes from three medical schemes
c.70.0% of SA revenue from alternative revenue models
What our stakeholders care about
  • Clinical efficiency and quality of care
  • Cost and accessibility of healthcare
  • Sustainability of providers
  • Care pathways
  • Geographic coverage and networks
  • Value-based care products
Our response
  • Continued investment in our employees and facilities so as to remain fit-for-purpose
  • Standardised pathways and formularies with measurable quality and cost metrics
  • Regular engagement on costs of existing care pathways and innovative pricing options
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Government
Government

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

Our community health projects help uplift the communities in which we operate

Key imaging services partner to public sector internationally

R714 million tax paid in 2021 (2020: R597 million)
Level 3 B-BBEE accreditation
c.90% of AMG’s UK revenue comes from delivering services to the UK’s National Health Service
What our stakeholders care about
  • Regulatory compliance
  • Clinical standards
  • A strong and sustainable healthcare system
  • Cost of healthcare
  • Employment opportunities
  • Being a good corporate citizen
Our response
  • We foster a pipeline of skilled healthcare professionals (nurses, pharmacists and radiographers) by continued investment in training and development
  • We have made 22 of our facilities and 320 of our employees available in SA
  • Rapidly deployed COVID-19-related solutions for public health authorities in the UK, Italy and Ireland
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Industry regulatory bodies
Industry regulatory bodies

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

Constructive dialogue and relationship with regulatory bodies has contributed in us being able to employ radiographers in SA

Health Professions Council of South Africa (HPCSA)
Hospital Association of South Africa (HASA)
South African Nursing council (SANC)
South African Pharmacy council
Other professional bodies
What our stakeholders care about
  • Compliance with regulatory and legal requirements
  • Safety of employees and patients and the quality of care provided
  • Proactive discussions on opportunities to improve access and affordability of healthcare
Our response
  • Ongoing engagement with relevant industry and regulatory bodies on critical issues (future impacts of the Health Market Inquiry (HMI) and National Health Insurance (NHI) in South Africa) to ensure best possible outcomes for all stakeholders
  • Provide continuing medical education and training for our employees
  • Received approval to employ radiographers in South Africa after years of engagement
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Shareholders, investors and financiers
Shareholders, investors and financiers

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

R35 billion market capitalisation

33.6% increase in share price (1 October 2020 to 30 September 2021)

25 cps final dividend payment (2020: zero)

Listed on the main board of the JSE
c.56% of shares held by top 10 institutional shareholders
c.74% of shares held by South African entities or individuals
What our stakeholders care about
  • Sustainable growth and profit generation
  • Cashflow generation and debt levels
  • Effective corporate governance, experienced leaders and succession plans
  • Dividends paid
  • Return on invested capital (ROIC)
  • Increasing regulation and relationships with governments
  • ESG metrics
Our response
  • We have frequent engagements with shareholders, investors and analysts through earnings calls, presentations and the AGM
  • COVID-19 worsened many of our financial metrics, but with improved operating results during 2021, these metrics are improving
  • We continue to invest in projects we believe will produce an acceptable rate of return
  • We have resumed dividends
Link to material matters
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Suppliers
Suppliers

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

R6.1 billion spent on procurement of supplies, equipment and drugs

R625 million spent on COVID-19-related protective equipment since the beginning of the pandemic

99% of procurement in southern Africa is with local suppliers
87.0% of procurement in AMG business units is with local suppliers
What our stakeholders care about
  • Timely payments
  • Beneficial relationships
  • Transformation through B-BBEE
Our response
  • Cultivating and nurturing supplier relationships
  • Timely supplier payments
  • Supporting enterprise development initiatives
  • Providing quality supplies to our patients, doctors and specialists
Link to material matters
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Society
Society

Stakeholder relationship with Life Healthcare

THE VALUE WE CREATE

Uplifting communities through our investment in CSI programmes, focusing on education and healthcare

200 cataract surgeries were sponsored during 2021 in Limpopo in partnership with the South African Council for the Blind (SANCB)
R14 million for SANCB Optima College to fund 120 learnerships and 250 short programmes
4 000 food parcels for needy communities in SA
What our stakeholders care about
  • Health and wellness
  • Community upliftment
  • Employment, development and educational opportunities
  • ESG and sustainability metrics
  • Protection of rights
Our response
  • Ethical behaviour with fair recruitment practices
  • Creating job opportunities through our investment in projects
  • Bursaries and educational funding through CSI initiatives
  • We are implementing our ESG strategy and targets
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