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NETWORK HEALTHCARE HOLDINGS LIMITED -
Network Healthcare Holdings Limited
(Incorporated in the Republic of South Africa)
Registration number 1996/008242/06
JSE share code: NTC ISIN code: ZAE000011953("Netcare")
NETCARE PREFERRED BIDDER FOR NHS CONTRACTS WORTH R 1.4 BILLION
1 Introduction
Netcare has cautiously been pursuing its international expansion programme. It
is currently completing the third successful Waiting List Initiative for the
National Health Service ("NHS") in the United Kingdom ("UK") which, in
aggregate, involved the treatment of approximately 2500 patients. As part of the
experience gained and as the next logical step, Netcare has, since December
2002, been involved in the pre-qualification and bidding process against a
multitude of international healthcare companies for the Independent Sector
Treatment Centre ("TCs") programme offered by the NHS.
The TC programme was launched by the British Government as a means of addressing
clinical capacity shortfalls and gaps across a range of medical specialties
relating to elective in-patient and day-case surgeries. At present, capacity
gaps in the NHS have resulted in lengthy patient waiting lists, but via the
establishment of the TCs, which are essentially new treatment centres designed
to deliver high quality, cost-effective scheduled diagnostic and/or treatment
services to NHS patients. The pressure on Waiting Lists is expected to be
drastically reduced.
2 Details
The British Secretary of State for Health, Dr John Reid, today announced that
Netcare has been selected as the Likely Preferred Bidder for two new TCs. These
include the Greater Manchester TC which aims to perform approximately 45 000
surgical procedures (orthopaedic, general, and ear, nose and throat) at the
Greater Manchester Surgical Centre (GMSC), and the Ophthalmology Chain (OC)
which involves performing approximately 49 000 cataract procedures using a
combination of mobile and fixed sites. Both contracts will be for a period of
five years, will commence during the course of 2004, and are still subject to
finalisation of all agreements.
The benefits of the TCs for both Netcare and South Africa are extensive. Netcare
is entering into fixed contracts with guaranteed patient volumes and numbers of
elective procedures, which in turn, means that our investment is protected and
the usual risks associated with managing such healthcare facilities are
lessened. The total aggregate value of the contracts should generate revenue of
approximately R1.4 billion in current terms.
The TCs will also assist Netcare in fulfilling its strategic objective of
retaining doctors and staff in its hospitals and within the South African
healthcare system. Given Netcare"s established networks and experience gained
through the group"s participation in the Waiting List Initiatives, Netcare
believes it has developed and implemented an effective model for operating the
TCs which will not have an impact on local operations nor denude healthcare
resources in South Africa.
3 Future prospects
Netcare believes that the current experience gained through the Waiting List
Initiatives and the TC programme will form the platform for a sustainable
expansion into the United Kingdom and Europe.
Further announcements regarding the status of these contracts will be published
from time to time.
Sandton
12 September 2003
Sponsor
Merrill Lynch South Africa (Pty) Limited
Date: 12/09/2003 01:30:33 PM Produced by the JSE SENS Department
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