Africa-Press – South-Africa. Remgro believes it can do what Capitec did in banking with Mediclinic in healthcare, now having full control of the private hospital group’s South African operations.
CEO Jannie Durand believes the company can, if some external factors fall into place, offer high-quality healthcare at an affordable price.
He said this plan will also be a better avenue to reach universal healthcare than the government’s National Health Insurance (NHI) scheme as it stands.
“We are convinced about the future of private healthcare in South Africa, despite all that is going on with the NHI,” Durand told 702.
“The NHI is a funding model, although they do have some things on the medical aid side. It is a funding model, not a delivery model.”
For healthcare to be delivered across South Africa, the government will have to partner with the private sector, in particular, private hospital groups such as Mediclinic and Netcare.
“We think we can deliver the services that are required, and we will have to deliver those services. We can even do it at a lower cost base to make it more affordable for people,” Durand said.
“But, we do need certainty, and we have to see how the policy frameworks are implemented in practice. We are confident that the NHI won’t impact our business too much.”
Apart from the NHI being a funding model rather than a delivery model, Durand said South Africa cannot afford such a scheme at this time.
“It is going to take a long time. The NHI will be stuck in the courts and stalled for a long time. That is definitely not keeping me up at night,” Durand said.
Remgro is more focused on how it can provide high-quality healthcare at lower price points across South Africa and expand its services in the country.
“To do this, we will probably implement a lower-cost model in some areas. Certain things, like the hospitals or clinics you build, won’t have private rooms and have bigger halls,” Durand said.
This enables a hospital of the same size to serve more patients, making it more efficient and allowing the company to pass on the cheaper costs.
“There are certain things you can do to make it cheaper for the user. It is like comparing flying business class to flying economy class. We are confident about that,” Durand said.
“We think we can deliver like Capitec did, which has done remarkably well in the banking sector. There is such an opportunity to offer a lower-cost healthcare model in South Africa.”
Durand said the biggest challenge with this is finding and training enough doctors and nurses to staff Mediclinic’s facilities.
Remgro takes control of Mediclinic
Remgro CEO Jannie Durand
Durand’s comments come as Remgro is set to take control of Mediclinic’s operations in Southern Africa, with Investment Holding Limited (IHL) taking over its Swiss business.
Founded in South Africa in the 1980s, Mediclinic has grown with Remgro’s backing into a multinational private healthcare giant.
This expansion has seen Mediclinic open up 50 hospitals in South Africa and become the largest private healthcare provider in Switzerland.
The company has more recently expanded into the Middle East, becoming a leading healthcare provider in the United Arab Emirates, with most of its operations in Dubai and Abu Dhabi.
Mediclinic operates seven hospitals, one day-case clinic and 28 outpatient clinics in the region.
With Remgro now taking control of the Southern African business, the company is better positioned to adapt to changing regulatory environments and deliver the best possible care.
“The landscape continues to evolve at an increasing rate, driven by the growing prevalence of chronic diseases, ageing populations, and an exponential expansion in medical knowledge and technology,” the company said.
“These forces are creating new opportunities and expectations for quality and breadth of services, while intensifying pricing and regulatory pressures across markets.”
As a result, having control split across regions enables the business units to operate independently and focus more intensely on serving patients in their areas of expertise.
Aligning ownership with their respective home markets should enable Remgro and IHL to better tailor their strategies to local market dynamics.
“This will also better position both businesses to unlock value through their strengthened local partnerships and brand presence,” the company said.
“Remgro and IHL remain strongly aligned in their common desire to invest for the long term in the private healthcare sector broadly.”
One area of concern for Remgro is its business in the Middle East, which has been significantly disrupted by the US-Israel war on Iran.
“Unfortunately, a couple of weeks ago, I would have been able to say to you that I was not worried at all about the Middle East operations,” Durand said.
“It was such a strong performer. There was strong demand for its services, and it was the best operator in the Middle East from a South African company.”
Durand explained that, so far, the major impact has been a decline in the number of patients travelling to Dubai or Abu Dhabi for treatment.
While a substantial and lucrative part of the business, considering the events in the Middle East, it is not the worst outcome, Durand said.
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