SA's private hospitals: Ailing in a pandemic

Patients have been putting non-elective surgeries, like hip replacements and cataract removals, on hold out of fear of catching the virus at a hospital.

But those operations will still need to take place and hospitals anticipate a surge, once the risk of Covid-19 abates.

Zunga said: "When a crisis like this one [Covid-19] hits, your impact is much greater for high-end hospitals than it would be for our hospitals."

In the past year, RH Bophelo has been making big moves, acquiring 60% of Wesmart Financial and Administration Solutions for R2.7 billion, through which it will provide the Docsure-Dema-sure medical aid products priced from R575.

"We definitely are moving to create an integrated affordable healthcare operator," he said.

The group is targeting the uninsured but employed market and although South Africa's unemployment rate has increased to 30.1%, Zunga added there was room for RH Bophelo in the market.

At the moment, people are either buying down in their medical aid options or cancelling them as they struggle to make ends meet during the pandemic.

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He said there was a market of about three million people that RH Bophelo could tap into.

South Africa's private hospitals have been grappling with growth challenges on the back of a weak economy and stagnant growth for medical insured lives of about nine million.

RH Bophelo also acquired Krugerdorp's Bell Hospital from Netcare, Medicare Private Hospital in Rustenburg, Fauchard day clinic in Johannesburg and Vryburg Hospital as well as the Phelang Bonolo Healthcare Group.

The group's growth strategy is also meant to ready it for the NHI, which is set to be fully implemented in 2030.

"[The] NHI is a funder model and needs infrastructure. So from our perspective, it will need infrastructure which we have. In a lot of the towns, we are the only private health facility," Zunga said.

He added there were a lot of details that still needed to be ironed out on the NHI such as tariff and other operational issues, but he believed RH Bophelo was in a good position to have a partnership with the government.

On Friday RH Bophelo released its annual results for the year ended 29 February 2020, which showed that its earnings had increased from R21.1 million to R69.9 million.

Much like last year, the company did not declare dividends since it is still expanding its capital base and listed on the Rwanda Stock Exchange last year.

Although RH Bophelo has covered a lot of ground in terms of its acquisitions, it has not been untouched by Covid-19, which has slowed its R900 million rights issue.

But Zungu said it was picking up steam again.