eMalahleni Day Hospital part of planned JSE listing

The company also owns day hospitals in Australia and plans to open at least seven new day hospitals in both countries in the short term.

Carl Grillenberger, AVL CEO, is no stranger to eMalahleni. He formed the listed hospital and day-hospital company President Medical Investments in 1986 and chose the name because the company was established in the then President Street, now Mandela Street, eMalahleni. President Medical’s assets including 12 day clinics and 19 hospitals, became part of the company which is today known as Life Healthcare in 1999.

“I have always been a firm believer in the benefits that day hospitals offer in terms of patient convenience, surgical procedures, cost savings and the efficiency of managing small units focused on specific specialities and procedures,” said Carl.

The AVL listing is scheduled for end-April, to increase the company’s share capital from R110 million to R210 million. Growth plans include establishing new facilities, acquisitions and partnerships with existing day hospitals and medical specialists.

“The AVL board believes that the move towards day-hospital surgery in South Africa is about to accelerate,” said Carl. “Leading medical scheme Discovery Health has acknowledged the savings associated with day-hospital surgery by offering specialists who operate in a day hospital instead of a hospital, a fee incentive to reduce costs associated with hospitalisation. SpesNet, a medical-specialist network, supported the Discovery Health philosophy in a newsletter to members.”

“In South Africa, the ratio of acute hospital beds to sub-acute beds is distorted relative to other countries, with the result that a very high percentage of surgical procedures is performed in hospitals. In Australia, for instance, there are approximately 280 private hospitals and approximately 290 free-standing day hospitals. In South Africa, this ratio is 235 to only 45.”

More than 60% of surgical interventions can be safely performed in a day hospital. These include plastic, cataract, ear-nose-throat, general and gynaecological laparoscopic, orthopaedic arthroscopy and maxillofacial surgery. Day-surgery units are smaller than hospitals, resulting in patients facing less red tape and a considerable reduction in the infection risk associated with hospitals.

Benefits contributing to cost containment include; reduced capital outlay by focusing only on surgical and investigative interventions, single shifts, five days a week instead of a 24-seven cycle and a small, well-trained specialised support-staff team.

Addressing potential investors in eMalahleni on Thursday, February 27 Carl said the AVL share offer gives investors access to an established, dedicated day-hospital company earning rand and Australian dollar, managed by a team with proven success in the market segment.

He expects substantial growth, as the establishment of new day hospital is not subject to Competition Commission investigation approval, as is the case with the large hospital groups.

The AVL prospectus should be available to interested investors towards the end of March 2014.