South Africa’s largest private hospital group being rebuilt from scratch

Netcare is nearing the completion of its ten-year strategy to fundamentally overhaul how it delivers healthcare in South Africa. 

As the completion date of 2028 comes closer, it is clear that Netcare is reaping benefits from the overhaul, resulting in improved financial performance in a stagnant economy. 

The shift is away from how Netcare historically provided care, in what the company referred to as fragmented and episodic. 

Netcare’s investments as part of the ten-year strategy aim to shift South Africa’s largest hospital group towards a model where patients are treated holistically across their lives rather than managing short-term illnesses. 

Apart from increasing patient engagement with the hospital group, the strategy comes with significant financial benefits for shareholders. 

The company has described how the strategy aims to provide superior clinical outcomes while generating a tangible “digital dividend” in the form of operational efficiencies. 

These financial benefits can be seen in Netcare’s latest set of interim results for the six months ended 31 March 2026. 

This set of results showed that despite South Africa’s stagnant economy, which makes topline growth difficult, the company is managing to grow its bottom line strongly thanks to increased efficiency. 

While revenue grew by 4.8% year-on-year, profit for the period surged by nearly 12% to R924 million as profit margins expanded. 

The benefits of the strategy are made clearer in the number of total paid patient days, which only rose by 0.7% year-on-year. 

This metric fundamentally underpins Netcare’s topline growth, which then filters down to bottom-line performance. With this stagnation, the only way to grow profits is to increase efficiency. 

“Netcare is encouraged by the strong financial performance in H1 2026, notwithstanding recent pressures within the medical scheme industry,” the company said. 

The strong growth in profits enabled the company to raise its interim dividend by 22.2% and continue executing on its share buyback programme. 

Overhauling Netcare

The digital dividend seen in the latest set of interim results at Netcare has been created by a strategy that began in 2018. 

Aligned with global healthcare megatrends, Netcare set about radically overhauling its business to focus on digital medical records, data-driven care, and increasing patient access to information. 

While all of this sounds relatively simple on paper, Netcare has implemented a litmus test to ensure that all of its investments and decisions align with its new strategy. All investments must meet specific criteria –

• Growing market share
• Differentiating services and clinical outcomes
• Improving margins and returns
• Increase the embedded value by retaining patients within the Netcare ecosystem

In effect, Netcare aimed to use its investments to win over clients and ensure they would have no reason to leave its ecosystem for a competitor. 

The company set about doing this primarily through implementing Electronic Medical Records (EMR) across Netcare’s entire ecosystem. 

This first phase took the company six years and was completed in 2024, with all medical equipment in Netcare’s hospitals being digitised. 

In its latest interim results, Netcare said the financial benefits of this phase have now exceeded its costs, with gross savings reaching R705 million. It expects this phase alone to yield returns of 30% per annum.

Phase 2 will take another three years, from 2024 onwards, and aims to leverage the data generated by the EMR platform. 

The aim is to use advanced analytics to enhance decision-making, improve patient safety, and optimise the cost per healthcare event. 

This includes the use of artificial intelligence to create early-warning systems, digital bookings for theatres, and personalised tools for doctors to enhance efficiency. 

Ultimately, the collection and use of this data should combine in Phase 3 to shift Netcare’s focus towards holistic care. 

This means a pivot away from managing short-term illnesses to using data to promote lifelong wellness for individuals within Netcare’s ecosystem. 

Phase 3 will include giving patients access to a unified digital health record available on Netcare’s app, and enabling them to engage with bots and AI to easily understand medical procedures and jargon. 

Netcare explained that much of the intense investment has already occurred, with it being front-loaded in Phase 1.