Mediclinic. Picture: SOWETAN/SUNDAY WORLD/TSHEKO KABISIA
Mediclinic. Picture: SOWETAN/SUNDAY WORLD/TSHEKO KABISIA

Shares in Mediclinic International have received another dose of good news with the waiving of the 20% co-payment for holders of medical insurance when receiving treatment at private healthcare facilities in Abu Dhabi.

On Friday, Mediclinic said statements regarding the waiving had been reported on the official news agency of the United Arab Emirates (UAE).

The group issued a statement via the JSE’s Sens service saying the co-payment for holders of Thiqa medical insurance cards had been waived by Abu Dhabi’s crown prince, Sheikh Mohamed bin Zayed al-Nahyan.

Abu Dhabi introduced the 20% co-payment system in July 2016, five months after Mediclinic acquired Al Noor Hospital Group for about £1.5bn.

While the group said it was awaiting precise details of the changes from the Health Authority Abu Dhabi, the market had little hesitation in enthusiastically marking Mediclinic’s shares higher.

The share, which has a primary listing on the London Stock Exchange, closed 13.3% higher at R141.02 on the JSE.

Mediclinic said it would continue to monitor the regulatory environment and the extent to which these changes would affect the group’s Middle East operating platform.

What happened to the Mediclinic share price is that investors have the joy of owning a share that had bad expectations already priced in

The bulk of Mediclinic’s business resides in Switzerland and SA, but the group operates six hospitals and 34 clinics with more than 700 inpatient beds in the UAE (which accounted for almost 16% of revenue in the last financial year).

Lentus Asset Management chief investment officer Nic Norman-Smith said healthcare stocks were often subject to various government regulations and that these risks needed to
be assessed when valuing
such stocks.

"What happened to the Mediclinic share price is that investors have the joy of owning a share that had bad expectations already priced in."

The regulatory change in the UAE follows Mediclinic reporting earlier this month that proposals to introduce a levy on the proportion of privately insured patients in listed hospitals in Zurich had been shot down.

In addition, the Swiss government released proposed adjustments for the national outpatient tariff as a transitional solution while healthcare providers and funders agree on a revised tariff structure.

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