The high and continually rising cost of healthcare is a global concern. Efforts to find…
The high and continually rising cost of healthcare is a global concern. Efforts to find cost-effective options to address this problem are ongoing, with alternative hospitalisation such as day hospitals and sub-acute facilities being amongst these.
Private hospital inflation has been 13% over the past five years, more than double the upper Consumer Price Index (CPI) band. In addition, medical schemes have experienced a downward trend in membership, with a move away from higher cost options to lower cost alternatives. This trend is set to continue unless medical aid inflation can be curtailed. The good news, however, is that South Africa has made good progress in rolling out facilities that can offer more accessible and affordable private healthcare, similar to trends in other countries. The number of facilities in the sub-acute facilities and day hospitals segment has increased by an annual rate of growth of 15.1% and 11.8% respectively between 2010 and 2018, compared to a 6.7% growth in acute facilities over a similar period.
Internationally, the demand for same-day surgery has grown as a result of improvements in medical technology and anaesthesia, leading to faster recovery times and fewer side effects. In addition, minimally invasive and non-invasive procedures are being used increasingly for laser surgery, laparoscopy, and endoscopy, for example. These medical advances make surgery less complex, with less post-operative pain. Minimally-invasive procedures are surgeries performed using the smallest incisions possible so that the body is able to heal more quickly – the goal being to provide care to patients allowing them to go home the same day, thereby reducing costs. Planned admissions and discharges streamline the process, reducing stress for patients and their loved ones, as well as associated costs.
Aside from its corporate advisory and JSE sponsor business, Tamela Holdings is a shareholder in, amongst other principal proprietary investments, Cure Day Hospitals (“Cure”), which specialises in same-day procedures that do not require an overnight stay. Tamela has walked the long journey with Cure since it started with just one hospital. Since then, through continued investment and strategic support, Cure has grown to include nine facilities across the country. Medical aid companies have seen the benefits, both from a cost perspective and from improved patient outcomes (measured by the number of re-admissions) and continue to steer patients towards these facilities. The Cure group continues to look for opportunites for growth.
Sub-acute care is best suited for patients who are medically stable but still require assistance to recover from an injury or an illness. Sub-acute care provides targeted care – for example physical rehabilitation – to specific areas without the high costs of hospitalisation but with more attention and precise care provided to the patient than in a general nursing clinic. Nurture Healthcare (Pty) Ltd (“Nurture”) is a Gqeberha-based healthcare organisation, a leading provider of physical rehabilitation hospitals in South Africa with nine facilities in all the major centres and several secondary urban hubs. Tamela’s mezzanine fund, Tamela Capital Partners, has recently approved an investment of R50 million into Nurture to expand its hospital network through greenfield and brownfield projects in strategic areas. The Nurture group’s increased national footprint allows it to capture more of the healthcare value chain and structure preferential patient referrals and tariffs with major healthcare insurers while maintaining a strong core value proposition for both patients and referring healthcare practitioners.
(1) Source: Discovery Health (2) Source: Health Market Inquiry 2019 Report
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