Netcare staff can rest assured that AI is not coming for their jobs, the CEO of the private hospital group said on Monday.
Anxiety about the threat to jobs posed by AI is a global concern, but is particularly acute in SA due to its high unemployment rate, which is almost 33%.
Netcare is pursuing an ambitious digitisation strategy that draws on AI capabilities, but believes the company’s natural attrition rate will take care of any decline in its staff requirements, said CEO Richard Friedland.
“We’ve always relied on attrition rather than retrenchment, and we don’t foresee that changing even as we become more digital and more focused on AI,” he said as the company released its interim results for the six months to March 31.
The group reported a 5.3% rise in revenue to R12.68bn for the period under review, while normalised earnings before interest, taxation, depreciation and amortisation (ebitda) improved 8.3% to R2.35bn.
Adjusted headline earnings per share (Heps) rose 20% to 58.8c and an interim dividend of 26c per share was declared.
Growth was driven by increased activity and operational efficiencies, and was achieved despite a constrained and competitive operating environment, said Netcare.
The first phase of Netcare’s 10-year strategy for transforming the business with digitisation and data had increased operational efficiency and delivered R439m in savings over the last three and a half years, said Friedland.
Netcare is now in the second phase of the strategy, using data to improve patient care.
For example, providing chronic kidney dialysis patients with an app to monitor their condition, along with regular monitoring reports to their doctors, had led to a steady improvement in outcomes measured by medical scheme administrator Discovery Health, said Friedland.
Netcare also had a lower hospital admission for dialysis patients than its competitors, he said, citing data from a large restricted medical scheme.
Netcare is also using data to change the attitudes of doctors reluctant to prescribe cheaper generics, which they perceive as inferior despite assurances from the SA Health Products Regulatory Authority that they are equivalent.
Netcare analysed clinical data from patients admitted to its facilities and demonstrated that the risk-adjusted mortality rate for people for whom generic anticoagulants were prescribed, was the same as for those receiving innovator versions.
The same comparison held true for antibiotics, said Friedland. Generic anticoagulants are 14% cheaper than innovators while antibiotics are up to 70% cheaper, said Friedland.
Netcare was committed to its digitisation strategy despite the uncertainty facing the sector as the government presses ahead with National Health Insurance (NHI), its controversial plan for universal health coverage.
“We don’t believe NHI is either affordable, sustainable and in its current form workable. We’ve … implored the president to take the high road and work with all parties within the private sector. Unfortunately, it does appear that the government has chosen the low road of slogging this out in court,” he said.
“We firmly believe that a workable, sustainable solution is one of collaboration between the different sectors. We can’t wait 15 years to solve this country’s healthcare needs,” he said.
Netcare reported that total paid patient days (PPD) increased 1.1% compared with the corresponding period last year. This included a 1.4% increase in acute PPD and a 1.3% decrease in mental health PPD.
During the period, Netcare bought back 35.6-million ordinary shares.
The hospital and emergency services segment delivered a steady performance for the first half, with revenue rising 5.5% to R12.3bn and total PPD up by 1.1%.
Medical cases continued to grow at a faster rate than surgical cases, with ongoing outmigration of lower-margin surgical procedures and declining maternity cases, it said.
Total surgical cases comprised 51.4% of PPD and medical cases 48.6%.
Demand for mental health services remained robust, Netcare said. However, the temporary unavailability of beds at certain high-occupancy sites due to essential refurbishment work constrained capacity. Consequently, mental health occupancy levels decreased from 69.3% a year ago to 68.2%.
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