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ANNUAL REPORT 2010 |
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About Life HealthcareThe Life Healthcare group is a key role player in the South African healthcare sector, primarily serving the market for private medically insured individuals, representing more than eight million people. The group has one of the most extensive footprints in southern Africa. The South African private healthcare market is attractive due to a number of factors including the high capital cost of developing facilities in the private hospital sector; a growing and ageing middle class privately insured population, a high and increasing disease burden, and an underresourced public sector healthcare system. Life has 27 years’ experience in operating private hospitals in South Africa. The group was listed on the JSE in 1999, and subsequently taken private in 2005 by a consortium of investors including senior management. On 10 June 2010 the Company relisted in the Health Care Providers sector on the JSE main board, under the share code LHC and ISIN: ZAE000145892. Life Healthcare has a proud track record of operational excellence and strong financial results. For the past five years Life Healthcare’s revenue has grown at a compound annual growth rate of 12.7%, and normalised EBITDA at a rate of 16.2%. Competitive strengths The following key strengths position Life Healthcare well in the South African private healthcare market:
Strategy Life Healthcare aims to continue providing high quality, cost effective healthcare in South Africa, and to become a leading private hospital operator in selected offshore emerging markets. To achieve this Life Healthcare will:
International quality certification Life Healthcare was the only South African healthcare company to achieve ISO 9001:2000 multi-site certification in 2007. In January 2010, Life Healthcare was awarded ISO 9001:2008 multi-site certification, becoming the first, and to date the only, South African healthcare company to achieve this. Business divisions Life Healthcare’s core business is the provision of acute private hospital care. Its hospitals are complemented by related healthcare services businesses that facilitate an integrated healthcare delivery system, covering the full spectrum of medical care. Life Healthcare’s business is divided into two principal divisions:
Life hospitals (56 facilities) Life Healthcare’s 56 hospitals extend over seven of South Africa’s nine provinces and Botswana. These are located in the country’s most populous metropolitan areas. The facilities range from high technology, multi-disciplinary hospitals offering highly specialised medical disciplines to community hospitals, sameday surgical centres and dedicated niche facilities, thereby providing the appropriate scale and scope of healthcare services. The Group also has minority shareholdings in seven other hospitals. Life Healthcare hospitals admitted over 550 000 patients in the 2010 financial year, mainly from the private medically insured market. Life Healthcare strives to maximise its hospital utilisation by maintaining excellent working relationships with its supporting doctors and other healthcare professionals providing medical care within its facilities by supporting them with the latest technology, equipment and quality nursing care; and by meeting the needs of patients with respect and empathy. Other factors which positively impact utilisation of our hospitals include an increasing disease burden, local economic conditions and preferred network agreements with private medical insurers. In addition to continuing to provide world class medical care in South Africa, the group’s strategy is to become a pre-eminent hospital operator in selected offshore emerging markets. Life Rehabilitation (six facilities) Life Rehabilitation complements and lends strategic support to some of the services offered in Life Healthcare hospitals. It provides acute, outcomes driven physical and cognitive rehabilitation for adult and paediatric patients disabled by brain or spinal trauma, stroke, or other disabling injuries or conditions. It has consolidated its position as the leader in the provision of private acute rehabilitation services, operating approximately 50% of the private rehabilitation beds in South Africa. Life Rehabilitation now has six rehabilitation units, situated in four provinces, with a total of 229 beds. Mental healthcare (six facilities) Life Healthcare is currently the largest provider of private acute mental healthcare, with six dedicated facilities located in the Eastern Cape, KwaZulu-Natal and Gauteng, comprising a total of 172 beds. Plans are in place to increase the number of beds in the Group’s network, with an additional 140 beds becoming available in the 2011 financial year. Chronic renal dialysis (four facilities) A growing demand for renal dialysis prompted Life Healthcare’s entry into this business in 2000. The Group now has three dedicated facilities in Gauteng and another in the Eastern Cape. A fifth unit will be opening in Port Elizabeth in January 2011 and it is envisaged that more facilities will be established at selected Life Healthcare hospitals in the coming two to three years. Overview Life Healthcare enjoys the support of
approximately 2 700 specialists and other
healthcare professionals. In conjunction with
these healthcare professionals our hospitals and
sameday surgical centres offer access to the
following: *8 322 beds including associates. 
Healthcare services division Life Esidimeni and Life Occupational Health are managed in the healthcare services portfolio. Life Esidimeni (12 facilities) Life Esidimeni (meaning ‘place of dignity’) operates a network of hospitals through a public/ private partnership with the South African government. Life Esidimeni provides its services under contract to provincial health and social development departments. Established over 50 years ago, Life Esidimeni has been involved in the largest and longest running public/private partnership in the South African healthcare sector. Life Esidimeni operates 12 long term care facilities with 4 171 beds. These facilities provide long term clinical care to chronically ill public sector patients, catering for mental health (3 343 beds) and frail care (650 beds) patients, providing approximately 1.6 million patient days a year. It also operates an acute care community (district) hospital with 178 beds near Hazyview. This hospital offers clinical services to public sector patients in support of the government’s objective of providing care to people who do not have access to private facilities, and thereby strengthens the public sector healthcare delivery system. Life Occupational Health (289 on-site clinics)
Utilisation in Life’s occupational health clinics is driven largely by Occupational Health and Safety Act requirements and the needs of corporate or institutional clients. Life Occupational Health contracts with corporate employers or institutions to provide a tailor-made range of services to suit their individual needs. Life Occupational Health was the first South African occupational healthcare organisation to achieve ISO 9001:2000 certification and, in January 2010, followed this up with ISO 9001:2008 certification. It is rated at Level 4 BEE by Empowerlogic. Life College of Learning The Life College of Learning, established 12 years ago, is registered with the Departments of Education as a private higher and further education institution, and provides professional training in nursing education, health sciences, management and leadership. The college operates in partnership with the Nelson Mandela Metropolitan University and has been accredited with Umalusi (the Council for Quality Assurance in General and Further Education and Training). The college management provides visible leadership in South African nursing education and is actively involved in the N ursing Education Association (NEA), South African N ursing Council (SANC) and the Hospital Association of South Africa (HASA) as well as tertiary institutions. In total, 7 700 students have graduated from the college since its inception, with 1 004 graduating and 1 350 nursing students registered during 2010. The college expanded its number of learning centres to 10 with the addition of the Midmed Learning Centre in Middelburg, Mpumalanga and the Bay View nursing school in Mossel Bay. Nine of these centres are individually accredited with SANC, with the Bay View nursing school currently in the process of being accredited. These centres offer basic and, in some cases, post basic nursing courses.
Since 2003, the college has been involved in a number of public/private initiatives to support provincial governments and non-governmental organisations (NGOs) with their educational needs. Currently, the college works closely with the Port Elizabeth Academic Complex and also trains some post basic learners for the KwaZulu- Natal Department of Health. The Life College of Learning also co-operates with the Health and Welfare Sector Education and Training Authority (HWSETA) in providing learnerships, bursaries and workplace experience to people from disadvantaged communities. Life Healthcare Foundation The Life Healthcare Foundation was established in 2007. It is managed as a trust with Company and independent trustees. The foundation provides resources and efforts in the health, wellness and education arenas, aimed at improving the health and well-being of disadvantaged communities and individuals, and reflecting Life Healthcare’s purpose of making life better for all. Most of the Group’s corporate social investment initiatives are channelled through the foundation. Collaboration with supporting specialists, suppliers, NGOs, academic institutions and government has added further impetus to the foundation’s initiatives.
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