SA’s third-biggest private hospital group Netcare is holding back on making Covid-19 vaccination compulsory, saying it would rather persuade than compel its employees to get jabbed.
“We have taken a very different approach to our competitors. We believe there are complex issues here, and we need to seek to understand why people are objecting, (and) whether we can overcome these objections. In the vast majority of cases we have been able to,” Netcare CEO Richard Friedland said on Monday.
“We are very comfortable with the levels we are achieving — over 85% are vaccinated and we continue to improve,” he said in an interview with Business Day shortly after the company presented its results for the year to September 30.
Netcare was waiting for the outcome of Business Unity SA’s request to the courts for a declaratory order on the legality of workplace vaccine mandates, said Friedland. “That will be enormously helpful. It is a critical issue for all of us ,” he said.
Mediclinic International and Life Healthcare both announced in October that they were introducing mandatory vaccination policies for staff and providers, joining a growing number of companies that have followed the lead of health and life insurer Discovery. The SA Human Rights Commission has said a law mandating vaccination would not be at odds with the constitution, but the government has stopped short of making vaccination compulsory for fear of pushback, with unions opposed to compulsory immunisation.
Netcare reinstated dividends after a year and a half hiatus, saying that while the company’s performance had yet to return to pre-pandemic levels, it had improved in the second half of the 2021 financial year, both in comparison to the corresponding period last year and to first half performance. Netcare announced it would pay shareholders 34c a share.
“Our cash preservation (measures) have proved necessary and successful over the past 18 months. Though Covid-19 and its effects will remain with us for the foreseeable future we feel past experience positions us to better manage its impacts,” said Netcare CFO Keith Gibson in a presentation to analysts.
Group revenue rose 12.5% to R21.2bn compared with R18.8bn the year before, while headline earnings per share swung from a loss of 3.6c a share last year to 61.5c a share.
Earnings before interest, taxation, depreciation and amortisation (Ebitda) rose 18.7% to R3.2bn, compared with R2.7bn the year before.
SA has seen three successive waves of Covid-19, each more severe than the last. Netcare had progressively improved its capacity to respond to surges in cases, as scientific knowledge evolved about the virus, rapid tests became available, and the quality of treatment improved, said Friedland. The proportion of beds occupied by Covid-19 patients had fallen from 80% in the first wave, to 60% in the second wave, and dropped to 52% in the third wave. Netcare had treated 126,431 Covid-19 patients since the start of the pandemic, of whom 54,698 had been admitted.
Private hospitals have been hit hard by the pandemic, as activity levels plummeted with each wave of infections. Patients deferred elective procedures, while hospitals faced costs associated with protecting staff and patients from Covid-19 and loss in revenue from parking and coffee shops.
Netcare estimated the pandemic had cost the group about R1.5bn in lost earnings, said Gibson.
In the absence of a new, highly transmissible and virulent variant, Netcare said it anticipated future waves of Covid-19 infections would be less severe than previous surges.
“If SA is able to move from a pandemic to an endemic state in which outbreaks are not overly disruptive and largely controlled by significant and frequent vaccination, recovery in activity over time to pre-Covid-19 levels will be possible,” it said.
Shares in Netcare closed 2.66% lower at R15.23 on Monday, giving the company a market cap of R21.917bn.
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