COMPETITION REGULATIONS
Tight rules ‘push local hospital groups offshore’
‘This is one of the primary reasons all the listed players have looked offshore for growth,’ says equity analyst
SA’s strict regulatory framework is forcing healthcare companies to look offshore for growth, say analysts. The comments come in the wake of the Competition Commission’s decision to block the merger of Netcare with Lakeview Hospital in Benoni. The commission said the merger would reduce or prevent competition in the area, resulting in higher hospital prices for insured patients who used the Lakeview Hospital. On Tuesday, Netcare’s share price eased 1% before closing 0.13% up at R23.10. The private healthcare provider operates 57 hospitals and has a market capitalisation of R33bn. Matthew Zunckel, an equity analyst at Mvunonala, said listed healthcare players were struggling to expand in SA because of tight regulatory frameworks. He said it had become increasingly difficult to obtain licences for greenfield operations and the commission was also increasingly clamping down on brownfield expansions, as demonstrated by this latest prohibition. "This is one of the primary reasons all the...
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