The outlook for South Africa’s three largest listed private hospital stocks is dimming as elective surgeries get postponed, patients fear the risk of contracting the coronavirus when visiting hospitals, and hospitals struggle to recoup operational costs.
One ray of hope is that medical aid schemes’ memberships remain stable as consumers try to ensure getting better healthcare services through the private sector rather than having to rely on public hospitals. This amid a very bleak economic outlook, increased job losses and a slump in consumer confidence, which have put strain on the finances of many who can afford private medical care and insurance.
Nevertheless, a sharp decline in occupancy levels at private hospitals – from a “normal” 65% to about 40% at the onset of the government lockdown – has led to some operating their state-of-the-art medical facilities at a loss.
As the coronavirus pandemic cuts its way through SA, news of insufficient capacity to house and treat the sick in public hospitals has become the norm. This even as the government imposed a hard lockdown at the end of March, which curtailed the civil liberties of South Africans to prepare for the “surge” in the pandemic. The surge has arrived, but government preparations have fallen short. Private hospitals, which have been enlisted to accept public patients at a rate where their costs are covered, haven’t experienced the brunt yet.
“In recent weeks the surge in Covid-19 cases has also led to an uptick in hospitalizations, although almost no private hospitals are actually full (despite what recent fake news has suggested),” Mark Wadley, a fund manager at Vision Fund Management, tells finweek.
Early in the lockdown
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