Strong demand for private healthcare in the UK
Discovery Holdings Limited (JSE:DSY), through its 50% stake in Prudential Health UK, is reaping benefits as thousands of UK citizens supplement their National Healthcare Service (NHS) membership with Private Medical Insurance (PMI).
Shareholders in locally listed Discovery received a positive SENS announcement late yesterday afternoon. An extract from the communication reads:
"PruHealth continues to develop well, with full-year Gross Written Premiums up 300 per cent at GBP 36 million (GBP 9 million in 2005). It now has around 100,000 individuals covered."
Shares in Discovery closed at 3000c having run strongly from a 2006 low of around 2000c a share.
Near perfect timing
In April 2004 (when Discovery announced the joint venture with Prudential) there were approximately 6.7 million British citizens making use of PMI products. Today there are more than 8 million British citizens making use of some form of PMI - with more joining every day.
This move to private healthcare stems from increased frustration with the standard of service offered by the NHS. Complaints range from apathetic doctors and staff to long waiting lists for standard procedures.
With the UK market ready for innovative private healthcare solutions it seems the combination of Prudential's brand and distribution network with Discovery's risk management, healthcare and operation expertise could not have come at a better time.
Struggling against the tide
The UK NHS is one of a handful of comprehensive public healthcare systems operating in the world today.
While thousands in the UK are showing the NHS a big thumbs-down, South African legislators seem intent on creating a national healthcare service of their own.
Recent developments in the regulatory environment support this view. Government is steadily working on increasing the reach and coverage afforded by existing medical aid schemes. But they have a long way to go!
A 2006 StatsSA survey indicates that as few as 14% of South African households have access to a medical scheme. This leaves the rest of the population dependent on state facilities.
The national health sector received R 52.7 billion of taxpayer's money in the 2006/2007 year - and we expect more of the same when Trevor Manuel reveals the 2007/2008 budget in February. This kind of funding should make it possible for the Department of Health to provide basic healthcare for all...
Perhaps taxpayers are already funding a national healthcare system in South Africa!
Editor's thoughts:
Private medical schemes are costly at the best of times. Unless carefully planned and implemented, a national healthcare system will prove to be an expensive pipedream, with contributions rising while overall standards of care decline.
