Private hospital group Netcare has recorded an increase in mental health admissions and announced plans to open two new hospitals in the next two years.
Netcare owns 14 mental health hospitals with 1,007 beds. It said that paid patient days grew 7% in the half-year to March with the new Netcare Akeso Gqeberha facility contributing 5.2% of this growth. Occupancy at its mental health unit is 74.5% this month.
Netcare CEO Dr Richard Friedland said internationally there has been a surge in mental health conditions worldwide — partly because there is now less stigmatisation of mental illnesses, “and that's positive”.
“Globally, and particularly in our own country, there is a lot of stress out there, not just the macroeconomic issues,” Friedland said. “We are facing a lot of societal pressures ... a lot of people haven't recovered from Covid, and I think all of this leads to an increased burden of mental health and one that we’ve all got to tackle. We don’t have the solutions to it yet.”
He said Netcare is “exploring opportunities to meet the demand for mental health care” and plans to expand Netcare Akeso’s footprint further by adding 164 beds. Construction of the new Netcare Akeso Polokwane, which will have 77 beds, and Netcare Akeso Alberlito, with 87 beds, has commenced. The Alberlito facility is expected to be commissioned in October 2025, and Polokwane in February 2026.
Netcare said it will spend R1.4bn in total capex in the 2024 financial year. The company released its half-year results to March this week, showing a 4.3% increase in group revenue to R12bn. It said the macro environment remains challenging in light of the prevailing elevated unemployment rates and a financially constrained consumer base.
We have seen how the centralisation of funds has worked in South Africa and we’re very concerned about that. We think that multiple funds, even if it’s based on a single risk pool ... would be more sustainable and rational
It added that the “persistent downturn in formal sector employment has engendered sluggish growth in medical aid membership”.
Customers are downgrading to affordable options, said Friedland. “There is a buy down to low-cost options; people don’t want to give up medical schemes and have opted to buy down.”
With the government signing into law the National Health Insurance (NHI) Bill, which among other things aims to provide access to private health-care facilities for people without medical aid, there has been strong criticism from the private health-care sector.
Friedland said that while Netcare remains fully supportive of universal health care, “there are a number of areas of the NHI Act that we believe are flawed and require further consultations”.
Some of the key concerns include the limits to the rights of individuals to purchase private medical cover after contributing to NHI taxes, and talk of the establishment of a single national NHI fund, which Friedland said has “systemic risks”.
“We have seen how the centralisation of funds has worked in South Africa and we’re very concerned about that. We think that multiple funds, even if it’s based on a single risk pool ... would be more sustainable and rational.”
Life Healthcare CEO Peter Wharton-Hood said the group “unequivocally supports the outcomes visualised by the [NHI] act, quality health-care services for all”.
However, he said the approval of the NHI Bill without addressing concerns raised during the parliamentary process is a “regrettable missed opportunity” to expand sustainable access to health care.
“What we don’t agree with is how they want to go about doing it ... they are missing the basics of where we are going to find nurses, doctors, and how we are going to manage and upgrade the existing infrastructure that has not been correctly deployed. So our criticism is that the implementation plan is not practical,” Wharton-Hood said.
He said the proposed health-care reform decisions within the NHI Act will profoundly affect the sustainability of South Africa’s health system for generations to come.
“We are monitoring the developments on the NHI Act as well as related legislation and will explore all avenues to ensure the sustainability of the health-care industry. Life Healthcare’s commitment lies in acting in the best interests of our doctors, nurses and our patients, both current and future.”
Life Healthcare has 64 health-care facilities providing a range of services in South Africa and Botswana. In the six months to March, group revenue from continuing operations grew by 7.8% to R11.7bn. The company's Southern African operations experienced strong demand, driven by the group being the preferred network provider for medical aids.
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