The day-hospital operator continued to incur losses at its SA operations in its six months to end-December, but moved closer to breaking even

Day-hospital operator Advanced Health says it has managed to grow revenue at its unprofitable SA operations in spite of Covid-19, adding that local medical schemes are gradually seeing its facilities as an alternative, more cost-effective option.

Day-hospitals are healthcare facilities providing short-procedure surgical services and diagnostic procedures that need to be performed on a same-day basis.

Advanced Health, which operates in SA and Australia, reported that its loss from continuing operations fell 72% to R5.6m in its six months to end-December 2020, while revenue rose 30% to R340.1m.

The group, valued at R75m on the JSE, generates almost two thirds of its revenue in Australia, where it is also profitable.

In SA, revenue grew 19% to R110.2m, but its loss widened almost a fifth to R34.1m, partly due to the inclusion of a loss from Harbour Bay in Simon’s Town, which only started operating in January 2020. The group said patient numbers in SA decreased by 12% as a result of Covid-19.

Revenue in Australia rose more than a third to R229.8m to end-December, and profits almost tripled to R28.4m.

In Australia, the increase in revenue was driven by increases in both cases and revenue per case, while in SA the increase in revenue was mainly attributable to an increase in revenue per case, the group said.

“In Australia, the day-hospital industry remains a strong and viable business sector in the healthcare system, with more than 40% of the Australian population having private healthcare cover,” the group said.

Day-hospitals in that country remain the competitive option for private patients compared to overnight hospitals, the group said, adding it had positioned itself well in that market.

“In SA, medical schemes are aligning themselves to the day-hospital model, and we are gradually seeing traction in them directing surgical procedures towards day-hospitals as an alternative, more cost-effective option,” Advanced Health said.

“In SA, the group will focus on achieving stability in all facilities and ensuring they become profitable,” the results statement reads.

As at the end of June, the group owned four day-hospitals in Australia, and also had a minority stake in another. In SA, it had 11 operating hospitals, including Harbour Bay in Simon’s Town. 

In afternoon trade on Friday, Advanced Health’s share was up 8.33% to 26c, though this is not an unusually large move for the share, which has fallen 3.7% over the past 12 months.

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