£147.9 million 32 080 99.2% - 2.1% Highlights GROWTH IN INPATIENT AND DAY CASELOAD - Apax Partners
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Highlights
2.1%
GROWTH IN INPATIENT
AND DAY CASELOAD
£147.9 million
STRONG YEAR-END
CASH BALANCES
32 080
TRAINING DAYS DELIVERED
99.2%
PATIENT SATISFACTION
RATING OF GOOD, VERY
GOOD AND EXCELLENT
74 Netcare Limited Annual integrated report 2012
UK OPERATIONS
UNITED
KINGDOM
operations
United Kingdom overview 76
Health policy and regulation 78
Hospital operating review 82
Clinical governance report 86
Our people 88
Netcare Limited Annual integrated report 2012 75
UNITED KINGDOM OVERVIEW
The strength of our long-
standing partnership
with the National Health
Service (NHS), spanning
more than a decade was a
key buffer against lower
Private Medical Insurance
(PMI) and self-pay
volumes in the last year.
Performance overview
The United Kingdom (UK) operating business
(BMI OpCo) experienced a difficult trading year,
UK Revenue UK Operating profit1
characterised by continuing recessionary pressures
and ongoing NHS reforms. Revenue from continuing
1 000 120
operations rose by 0.4% to £834.0 million, although
117.1
106.4
earnings before interest, tax, depreciation and 100
800
834.0
830.3
amortisation (EBITDA)1 declined 6.6% to £176.1 million,
80
affected by a fall in insured PMI volumes. The UK 600
£m
£m
results have been impacted by certain material, 60
non-cash adjustments relating to the General 400
40
Healthcare Group (GHG) portfolio of 35 UK hospital
200
properties initially acquired in 2006 GHG PropCo 1). 20
Further details regarding these exceptional items
0 0
can be found on pages 35 and 36. 20112 2012 20112 2012
Financial summary
£m 2012 20112 % change
Revenue 834.0 830.3 0.4
Operating profit3 106.1 127.4 (16.7)
Operating profit before capital items 106.4 117.1 (9.1)
Capital items (0.3) 10.3
Operating profit margin1,3 (%) 12.8 14.1
Profit for the year from continuing operations3 5.7 40.0 (85.8)
Net debt 1 712.9 1 785.4 4.1
Capital expenditure including intangible assets 41.2 43.9 (6.2)
1 Excluding capital items.
2 Restated to exclude discontinued operations.
3 Excluding exceptional items relating to GHG PropCo 1.
76 Netcare Limited Annual integrated report 2012
United Kingdom overview | UK OPERATIONS
Executive Committee
01 02 03 05
04 05 06 08
01 | Stephen Collier (55) 02 | Craig Lovelace (39) 03 | Duncan Empey (65)
Chief Executive Officer Chief Financial Officer Group Medical Director
Qualifications: Qualifications: Qualifications:
Barrister; LLB (Hons), LLM, Dip AL BSc (Hons) Land Management, FCA MB, BS, LRCP, MRCS, MRCP, FRCP
Joined in 1982 Joined in 2010 Joined in 2008
04 | Martin Johnson (39) 05 | Catherine Vickery (37) 06 | Elaine Young (47)
Managing Director – General Counsel and Managing Director – Hospitals
Commercial, Business Company Secretary Qualifications:
Improvement, Technology and Qualifications: MBA
Infrastructure Solicitor, BA (Hons) Jurisprudence Joined in 2011
Qualifications: and PGDip Legal Practice
BEng Mechanical Engineering, Joined in 2005
Chartered Engineer, MSc Business
Management, Lean Six Sigma Master
Black Belt, PRINCE2 Practitioner,
Diploma NLP
Joined in 2012
Netcare Limited Annual integrated report 2012 77
HEALTH POLICY AND REGULATION: UK
There has been no major change in the key
players in the UK independent healthcare
sector, with General Healthcare Group (GHG)
remaining the biggest private provider by
scale and network.
Key market drivers 65 is projected to be 25.9 years, and
28.3 years for women aged 652.
Social trends
This trend continues to have funding
The country’s ageing population
implications, since a lower percentage
remains one of the most significant
of people of working age will result in
social trends affecting the UK
less tax revenue being generated. This
healthcare market. Between 1930 and
has formed a major part of the debate
2010, life expectancy at birth in the
around the future role of the NHS. In
UK increased by around a third, from
particular, it has renewed the focus on
58.7 to 78.2 years for men and from
integrated care initiatives and is likely to
63.0 to 82.3 for women. During the
drive higher competition for increasingly
debate about “National Wellbeing”,
scarce healthcare resources,
when asked what affected their
requiring greater involvement from
wellbeing, health was the most
the independent sector.
common response from individuals1.
Between 2010 and 2051, the proportion The UK economy
of people aged 65 and over is projected Recent movements in the UK economy
to increase from 17% to 24%, while have been somewhat contradictory.
the proportion aged 85 and over is The labour market has shown greater
projected to increase from 2% to 7%. resilience than expected, having risen
By 2051, life expectancy for men aged from its low point at the end of 2009.
UK output, employment and output per worker productivity, 2007 to 2012
(seasonally adjusted)
1.5 106
1.0 104
Quarter on quarter growth
0.5 102
Index, 2009 = 100
0.0 100
%
-0.5 98
-1.0 96
-1.5 94
-2.0 92
-2.5 90
2007 Q1
Q2
Q3
Q4
2008 Q1
Q2
Q3
Q4
2009 Q1
Q2
Q3
Q4
2010 Q1
Q2
Q3
Q4
2011 Q1
Q2
Q3
Q4
2012 Q1
Q2
GDP (LHS)
Employment (LHS)
—
Productivity (RHS)
Source: Office for National Statistics
1 Measuring National Wellbeing, ONA 24 July 2012.
2 ONS Population change (2012 Edition).
78 Netcare Limited Annual integrated report 2012
Health policy and regulation | UK OPERATIONS
By contrast, gross domestic product recovery in employment growth, wage Impact on the private market
(GDP) has fallen by approximately 4% settlements look set to remain weak.
over the same period. While it also Excluding bonuses, the average wage
Private Medical Insurance
recovered somewhat from its low point settlement has increased slightly to The private medical cover market has
in mid-2009 when its cumulative 1.6% from 1.5% in the three months been vulnerable to business cycles,
decline exceeded 6%, the subsequent to June 20126. Income per head in the but in 2012 showed signs of
recovery lost momentum. Over the last stabilising. Future demand for medical
second quarter of 2012 at £4 927
two years, GDP has fluctuated around cover will largely depend on the
was 13.2% down compared to its
a broadly flat trajectory prior to October strength of the UK economy, but
pre-recession peak of £5 675 in
2012’s preliminary announcement of pressures on NHS services during a
the first quarter of 20087.
1% quarter-on-quarter GDP growth3. period of lower spending growth may
In the last six months, average UK health policy also offer some stimulus for private
independent forecasts for 2013 have medical cover going forward. As
In March 2012, the Health and Social
fallen from 1.7% to 1.1%4. indicated in the table below, subscriber
Care Act 2012, described as one of
For the 2011/2012 period, public sector numbers for private medical cover
the most important regulatory
net borrowing was £121.6 billion, (covering medical insurance and
developments in the UK healthcare
£4.4 billion lower than the Office for self-insured medical expenses
system for some time, gained royal
schemes) were down 8.8% in total
Budget Responsibility had originally assent, more than 14 months after
from 2009 to 2011, and total health
forecast5. In October 2011, the first being tabled in the House
cover spending decreased by 7.9%
chancellor cleared the Bank of of Commons.
in real terms after adjusting for retail
England to increase the scale of its
Under the Act, general practitioners price index (RPI) inflation.
quantitative easing programme from
(GPs) and other clinicians will be given
£200 billion to £275 billion due to the Movements in demand for private
much more responsibility for spending
deterioration in the economic outlook. medical cover confirm that, of the
the health budget in England, while
By July 2012, the Monetary Policy 351 000 subscribers that dropped
greater plurality of provision will be
Committee (MPC) had announced out of the sector since 2008, 216 000
encouraged. As organisations respond
its intention in increase this to were company paid and 135 000 were
to the Act, it is hoped that there will
£375 billion. individual paid, which represents a
be significant opportunities for
6.8% decline in company paid
Consumers have continued to feel independent healthcare operators volumes and 12% decline in individual
pressured. Despite the modest to be part of the solution. paid subscribers.
In the period under review, Laing &
Number of subscribers for health cover products and total UK spending on
Buisson’s Health Cover report8 showed
health cover products, 2009 to 20128
the decline in policy numbers slowing
Subscribers Subscribers
to just 0.2%, reflecting modest growth
at 1 January at 1 January Spending in Spending in
2009 2012 2008 2011 in the corporate market offset by a fall
Market 000 000 £ million £ million of 4.2% in the individual market.
Meanwhile, claims paid on PMI
Private medical cover 4 322 3 971 4 174^ 4 252^
decreased by 3.6% in real terms
Health cash plans* 2 873 2 593 507 467
in 2011. This disparity is in part
All health cover explained by a combination of
(excluding dental plans) 7 195 6 564 507 467 co-payments and insurer claims
Growth (8.8%) (7.9%)
management initiatives.
^ Includes derived spending by companies that self-insure medical expenses.
* Includes a small amount of dental cover spending. This data is contradicted by
Datamonitor9, which suggests that the
decline in lives covered continued
through the year at 3.0%, with
3 ONS The Productivity Conundrum, Interpreting the Recent Behaviour of the Economy. corporate policies reducing by 1.7%
4 Forecasts for the UK economy: A comparison of independent forecasts, October 2012. and personal policies by 6.5%. Their
5 Public Sector Finances, September 2012.
6 Chartered Institute of Personnel and Development – Labour Market Outlook Report Summer 2012. recent report does not forecast any
7 National Accounts, ONS October 2012.
immediate turnaround in subscriber
8 Laing & Buisson, Health Cover UK Market Report, 2012.
9 Datamonitor, UK Private Medical Insurance 2012. numbers.
Netcare Limited Annual integrated report 2012 79
HEALTH POLICY AND REGULATION: UK (continued)
Self-pay patients seen within 18 weeks. NHS waiting list significant cost savings of £15 billion
times are still projected to rise, in to £20 billion over the period 2014 to
The self-pay market remains
particular with restrictions being 2015. Spending on health services in
encouraging, with more patients
placed on the number of non-urgent the UK more than doubled in the last
considering paying for their own
operations being carried out. decade, growing from £53 billion in
treatment when they are not covered
the 2000/2001 period to £120 billion in
by PMI and as more procedures are The National Health Service 2010/201111. In July 2012, the Institute
restricted by the NHS. Industry
The principal aim behind many of the of Fiscal Studies estimated that public
commentators suggest most health service funding is likely to
proposals in the Health and Social Care
independent providers have seen remain tight up to 2020, with its
Act 2012 (“the Act”) was to increase
continued growth in self-pay volumes, choice for patients. Commissioning financial burdens exacerbated by high
albeit flattening more recently. responsibilities will move from Primary levels of long-term debt, particularly
Despite budgetary pressure, there has Care Trusts to Clinical Commissioning from the repayment of Private Finance
been a small improvement in Groups (CCGs) by April 2013, which Initiative (PFI) costs to independent
adherence to NHS waiting list time will devolve more responsibility to GPs. contractors.
targets during the year under review. CCGs will decide on care for patients,
In July 2012, the Office for Budget
The monthly referral to treatment advise them on where to go for
Responsibility added to the debate on
statistics10, published by the treatment and pay the provider. The
the sustainability of the current scope
Department of Health, show that in majority of stakeholders have accepted
of the NHS, releasing its projection
August 2012 there were 298 682 the provisions of the Act, and are
that if productivity growth in
inpatients whose “pathways” were progressing with the changes required.
healthcare did not improve on its
completed in hospital, 92.7% of whom As of October 2012, key dates have historic trend of 0.8% per year, health
had been seen within 18 weeks (up been agreed for the implementation of spending would need to rise by 3.6%
from 90.4% in the previous year). the CCG authorisation process. CCGs per year in real terms for output to
have applied to be authorised in four keep up, equivalent to adding 7.5% of
However, the median waiting time
separate waves, with all CCGs having GDP to health spending by 2061/2062.
increased from 8.1 weeks in August
submitted their applications to the
2011 to 8.3 weeks in August 2012 and Despite continued economic
NHS Commissioning Board.
analysis shows that trauma and uncertainty and resistance from
orthopaedics, which represents a At the same time as this large-scale certain sectors of government to
large proportion of BMI’s caseload, restructuring, the NHS is being put independent sector involvement, the
achieved only 88.6% of patients being under great pressure to realise market generally accepts that
independent sector provision will
become increasingly important in the
Referral to Treatment (RTT) waiting times, England
medium term, as NHS funding comes
10 94 under continued pressure. All political
parties have reached consensus on
92
9
the proposals of the Dilnot Report,
90
which proposes that individual funding
8.8
8.8
8.7
8.5
88 should play a role in social care, and
Weeks
8.4
8.4
8.4
8.3
8
%
8.1
8.1
8.1
8.1
86 similar principles could be applied to
7.8
health in future, although the
84
7
processing of the Act has bolstered
82
resistance from some sectors.
6 80
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
2011 2012
Median wait – LHS
—
% within 18 weeks (RHS)
Source: NHS Referral to Treatment waiting times data, August 2012, Government Statistical Service
10 National statistics on NHS referral to treatment waiting times 18 October 2012.
11 Healthcare across the UK: A comparison of the NHS in England, Scotland, Wales and Northern
Ireland, NAO June 2012.
80 Netcare Limited Annual integrated report 2012
Health policy and regulation | UK OPERATIONS
Regulatory overview inspections was to determine that regulated. Under the provisions of the
patients: Act, an independent regulator for NHS
The principal regulator for GHG in
foundation trusts (Monitor) has been
England is the Care Quality s¬ !
¬ RE¬TREATED¬WITH¬RESPECT ¬INVOLVED¬IN¬
established as the sector regulator
Commission (CQC). BMI Healthcare discussions about their care and
for health. Monitor’s role will change
and the legal entities of the managed treatment, and are able to influence
sites are registered as providers with to take on a number of new
how the service is run;
the CQC under the Health and Social responsibilities, including regulating
s¬ 2
¬ ECEIVE¬SAFE¬AND¬APPROPRIATE¬CARE¬ all providers of NHS-funded services
Care Act. Each site is registered as a
that meets their needs and in England which includes providers
location providing regulated services
supports their rights; from the independent sector. Monitor
which may include:
s¬ !
¬ RE¬PROTECTED¬FROM¬ABUSE¬AND¬THAT¬ has been garnering stakeholders’
s¬ 4REATMENT¬OF ¬DISEASE¬AND¬DISORDER
staff respect their human rights; views on proposals for the provider
s¬ 3URGICAL¬PROCEDURES¬AND and licence and expect to be ready to
issue licences to NHS foundation
s¬ $IAGNOSTIC¬AND¬SCREENING s¬ !
¬ RE¬CARED¬FOR¬BY¬STAFF ¬WHO¬ARE¬
trusts in April 2013, and other
In the transition application, all sites properly qualified and competent to
providers from April 2014 subject to
declared compliance with the do their job.
the results of the consultation.
outcomes for the 16 key essential The inspections have found a high
standards which are directly related to The provision of healthcare in
level of compliance with these
the quality and safety of care. Annual Scotland and Wales is regulated by
standards at all sites.
routine unannounced inspections have Healthcare Improvement Scotland and
been carried out at the majority of The Health and Social Care Act makes the Healthcare Inspectorate Wales,
sites. The main focus of these changes to the way healthcare is respectively.
Netcare Limited Annual integrated report 2012 81
HOSPITAL OPERATING REVIEW: UK
GHG is the largest provider of private acute
care in the UK. Under the BMI Healthcare
brand, GHG operates a national network
of 61 hospitals across the UK, comprising
2 979 beds, 183 operating theatres and
54 in-house pharmacies.
Introduction PropCo 1. Exceptional items and the
results of discontinued operations are
GHG offers a full range of healthcare
discussed under the headings
services including imaging services,
Exceptional items relating to GHG
physiotherapy, oncology, orthopaedics,
PropCo 1 and Discontinued operations,
weight loss and women’s health
respectively. GHG’s financial performance
services.
discussed below excludes the
Business structure exceptional items and the results of
Following Netcare’s acquisition of GHG discontinued operations.
in 2006, the UK business was split into Overall caseload grew by 2.1%
an operating business (BMI OpCo) (2011: 4.2%), largely driven by NHS
and a property business which owns Choose & Book (C&B) growth which
the properties and leases them to offset a continued decline in PMI
BMI OpCo. volumes. Self-pay volumes have shown
The property business comprises two limited growth after two years of
property-owning subgroups. The first decline, although the rate of growth
subgroup (GHG PropCo 1) owns remains heavily influenced by levels of
consumer confidence in the
35 UK hospital properties acquired
wider economy.
in 2006. The second subgroup
(GHG PropCo 2) owns the six Revenue from continuing operations
UK hospital properties acquired rose by 0.4% to £834.0 million
from Nuffield in 2008. (2011: £830.3 million), although the
fall in PMI volumes contributed to a
The GHG PropCo 1 debt facility is
6.6% decline in EBITDA to
ring-fenced from BMI OpCo and GHG
£176.1 million (2011: £188.6 million).
PropCo 2 and is non-recourse to
EBITDA is reflected before capital items
Netcare and its South African
of £811.7 million (2011: £10.3 million
operations. The leases concluded
credit), the largest of which is the
between BMI OpCo and GHG PropCo 1
impairment of GHG PropCo 1
remain secure for the next 19 years,
goodwill of £811.4 million.
with an additional 10-year
renewal option. EBITDA margin declined to 21.1%
(2011: 22.7%), mainly as a result of
Business performance the continued shift from private patient
BMI OpCo experienced a difficult volumes to lower-margin NHS volumes,
trading year, characterised by and more inpatient to day-case
continuing recessionary pressures and procedures. However, operational
ongoing NHS reforms. GHG’s results efficiency and continuing cost
have been impacted by certain material rationalisation programmes have mostly
non-cash adjustments relating to GHG offset this effect.
82 Netcare Limited Annual integrated report 2012
Hospital operating review | UK OPERATIONS
Net financial expenses from continuing £130.6 million at 30 September 2011. The accounting adjustments required
operations of £354.2 million The sale of the Care Fertility Group Ltd as a consequence of the changes
(2011: £124.9 million) includes (Care) in June 2012 contributed to this, in assumptions are reflected in the
£124.1 million net interest expense and resulting in net cash proceeds of table below.
£225.0 million relating to the exceptional £23.5 million.
non-cash movements in the interest Impairment of goodwill
GHG continues to meet all financial
rate swap contracts, as discussed later. The once-buoyant UK property market
In addition, net financial expenses were covenants on the BMI OpCo, GHG
PropCo 1 and GHG PropCo 2 debt has declined significantly since 2006.
adversely affected by a £6.6 million
facilities. During the 2012 impairment review on
(2011: £2.8 million credit) non-cash
the goodwill carried in respect of GHG
charge, representing the ineffective Working capital continued to be tightly
PropCo 1, a non-cash impairment
portion of the movement in fair value controlled and improvements made in
of the interest rate swaps. charge of £811.4 million was recorded
2011 were sustained.
against the GHG PropCo 1 goodwill.
A tax benefit of £201.8 million
(2011: £36.5 million) was recognised
Exceptional items relating to This review included taking detailed
during the year, which included the GHG PropCo 1 external valuation advice and inputs.
following credits: The GHG PropCo 1 banking facilities Interest rate swap contracts
have a maturity of October 2013 at
s¬ ¬a¬MILLION¬RELATING¬TO¬THE¬CHANGE¬ GHG will no longer be able to apply
which time the outstanding balance of
in the basis of the deferred tax hedge accounting principles to the
approximately £1.5 billion falls due
calculation on the GHG PropCo 1 interest rate swap contracts associated
for repayment. The prevailing macro-
assets (refer to Exceptional items with GHG PropCo 1. Consequently,
relating to GHG PropCo 1 for further economic environment within the UK,
non-cash movements in the fair value
details); the state of debt markets across
Europe and the negative value of of the swaps of £122.4 million have
s¬ a
¬ ¬MILLION¬RELATING¬TO¬THE¬TAX¬ GHG PropCo 1’s interest rate swap been taken directly to the income
effect of the GHG PropCo 1 interest statement from 1 April 2012.
contracts make the refinancing of the
rate swaps fair value adjustments;
GHG PropCo 1 debt challenging. In addition, a cumulative fair value loss
and
While GHG PropCo 1 will diligently on the GHG PropCo 1 interest rate
s¬ ¬a¬MILLION¬AS¬A¬RESULT¬OF ¬A¬FURTHER¬ seek a refinancing solution before swap contracts had been retained in the
2% reduction in the UK statutory October 2013, a solution was not yet cash flow hedge reserve within equity.
company tax rate to 23%. in place as at the date of this report.
In light of the discontinuation of hedge
GHG therefore recorded a profit after As a result of the GHG PropCo 1 debt accounting on the GHG PropCo 1
tax from continuing operations of maturity being less than 12 months interest rate swap contracts, a portion
£5.7 million (2011: £40.0 million). After from the release of Netcare’s 2012 of the non-cash cumulative fair value
exceptional items and including profit loss in the cash flow hedge reserve
results, changes in the underlying
on discontinued operations,
accounting assumptions related to amounting to £102.6 million was charged
GHG recorded a loss after tax of
GHG PropCo 1 were required. from the reserve to the income statement.
£825.3 million (2011: £41.6 million profit).
Net debt declined £72.5 million in the
year to £1 712.9 million. The majority Income statement impact of exceptional items relating to GHG PropCo 1
of the debt (£1 578.9 million) is held debt facilities
in GHG PropCo 1. BMI OpCo’s net £m
debt declined by £53.0 million to
Impairment of goodwill 811.4
£91.7 million year-on-year, partly as Interest rate swap contracts 225.0
a result of the deconsolidation of
Health and Surgical Holdings Ltd Fair value losses on swaps not hedge accounted 122.4
Reclassification of the cumulative swap loss to
(Transform) with gross debt amounting
the income statement 102.6
to £20.2 million.
Tax (173.6)
Closing cash balances remain strong
Total exceptional items 862.8
at £147.9 million compared to
Netcare Limited Annual integrated report 2012 83HOSPITAL OPERATING REVIEW: UK (continued)
Taxation s¬ ¬#OMPLETED¬NEW¬OPERATING¬THEATRES¬ Relationships with doctors
and refurbishments at BMI The
The tax impact of the aggregate Building good relationships with
adjustments described previously Ridgeway Hospital in Swindon; and
consultants and with local GPs is
resulted in a non-cash deferred tax s¬ ¬#ONTINUED¬TO¬REFURBISH¬A¬NUMBER¬OF ¬ critical to GHG. Dialogue with GPs and
credit of £173.6 million to the income wards at BMI Priory Hospital in the consultants has continued during the
statement. West Midlands, for completion year with presentations, clinical
Further details of the adjustments can in 2013. conferences and engagement forums
be found in note 2 to the Group annual around the country. These
financial statements and on page 160
Decontamination centres engagements enable the sharing of
of the Chief Financial Officer’s review. BMI also completed the transfer of information with GPs and consultants
decontamination services from the and provide a chance for them to give
Discontinued operations majority of the BMI hospitals to feedback to management. GHG plans
In line with its strategic focus on its specialist hubs which it owns and to build on and develop these forums
core acute hospital business, the BMI operates. A fourth decontamination hub as a platform that contributes to
OpCo disposed of Care and Transform providing the best care for patients.
in Kent was opened during the year,
in June and July 2012, respectively. which will service both internal and
Care is a specialist fertility provider and
Investing in people
external customers.
Transform specialises in low-cost GHG continues to focus on staff
cosmetic surgery. Care and Transform The upgrade of the decontamination engagement and development. This
have been classified as discontinued facilities at the Maidstone hub, in line resulted in an increased frequency of
operations and their results have been with Care Quality Commission guidelines, line management briefings, as well as
reflected separately in the income was completed. The project to upgrade staff communications from the Chief
statement. A capital profit of a number of decontamination facilities Executive Officer. The package of
£31.6 million has been recognised on across the portfolio is ongoing. non-financial benefits was also
the disposal of these businesses. expanded. The Night of the Stars
Information Technology (IT) Awards, which recognises the
Investment in infrastructure systems dedication and contribution of staff,
and facilities remained a highlight for the year.
The PeopleSoft IT system
Hospitals implementation was rolled out during For more information see Our
GHG continued to invest in its the year. This solution has 14 modules people: UK report on page 88.
infrastructure and facilities to enhance covering patient administration, Managing GHG’s
the quality of its hospital portfolio, with charging and billing, pharmacy environmental impact
capital expenditure for the year dispensing, stock control, ward and
This was the first year that GHG made
amounting to £41.2 million theatre management, procurement and
payment to the UK Government as part
(2011: £43.9 million). During the financials. The system is already of its obligations under the Carbon
year GHG: proving more reliable and easy to use, Reduction Commitment. GHG was
s¬ #
¬ OMPLETED¬THE¬REFURBISHMENT¬OF ¬ reducing the risk of error. The rollout required to purchase carbon
BMI The Park Hospital in and associated training across the BMI allowances at a cost of £571 000
Nottingham, with a major extension network is expected to be mostly to cover regulated emissions of
to the existing building including complete by the end of 2013. 47 594 tonnes of carbon dioxide
a new intensive treatment unit, new equivalent (CO2e). During 2012, GHG’s
endoscopy suite and theatre, and Best patient care
focus was to maintain the initiatives and
the refurbishment of three existing BMI’s goal is to provide the best care for programmes currently underway as
theatres; patients with the highest quality part of its environmental management
s¬ #
¬ OMPLETED¬THE¬REFURBISHMENT¬OF ¬ outcomes, in a location that is programme. A review of existing
seven theatre suites and three convenient to them. Patient feedback environmental and waste policies was
existing wards, and built new informs progress against this goal, also initiated.
oncology and paediatric wards at which during the year showed 99.2% of
ONLINE For more on managing
BMI The Alexandra Hospital, South patients rate the quality of care provided GHG’s environmental impact see
Manchester; as excellent, very good or good. the Environmental report: UK.
84 Netcare Limited Annual integrated report 2012Hospital operating review | UK OPERATIONS
Looking ahead Multi-year contracts have been continue. The efficiency strategies and
renewed with the majority of PMI improvements implemented during the
The year ahead is anticipated to remain
insurers and there are encouraging year, position BMI OpCo well for a
challenging for BMI OpCo, given the
signs of stabilisation and growth in recovery in the market.
persistence of global economic
uncertainty, the budgetary and some parts of this market. NHS
structural uncertainties in the NHS and volumes are expected to continue
the impact of austerity measures on the growing albeit at a lower rate; however,
UK economy. NHS tariff pressures are expected to
United Kingdom hospitals
Registered beds Registered beds
Hospital 2012 2011 Hospital 2012 2011
Northern Region 770 807 London Region 649 664
Albyn Hospital 44 44 Bishops Wood Hospital 47 42
The Alexandra Hospital 170 170 The Blackheath Hospital 69 69
The Beardwood Hospital 31 31 The Cavell Hospital 41 45
The Beaumont Hospital 34 34 Chelsfield Park Hospital 50 50
Carrick Glen Hospital1 18 19 The Clementine Churchill
141 141
The Duchy Hospital1 27 27 Hospital
Fernbrae Hospital 16 20 Coombe Wing3 22 22
Gisburne Park Hospital1 29 35 Fitzroy Square Hospital1 17 17
The Highfield Hospital 57 57 The Garden Hospital 30 30
The Huddersfield Hospital 29 29 The Kings Oak Hospital 52 52
King’s Park Hospital1 21 23 The London Independent
78 80
The Lancaster Hospital 27 27 Hospital
Ross Hall Hospital 101 101 The Riverside Hospital 14
Sefton Hospital 1
19 23 Shirley Oaks Hospital 50 50
The South Cheshire Private The Sloane Hospital 32 32
32 32
Hospital1 Southend Private Hospital1 3 3
Thornbury Hospital 77 77 Weymouth Hospital2 17 17
Transform Pines Hospital 20 Southern Region 838 845
Woodlands Hospital1 38 38 The Bath Clinic 75 75
Central Region 722 722 The Chaucer Hospital 60 60
The Chiltern Hospital 66 66 The Esperance Private Hospital 50 50
The Droitwich Private Hospital 46 46 Fawkham Manor Hospital 32 39
The Edgbaston Hospital 55 55 Goring Hall Hospital 52 52
The Foscote Hospital² 16 16 The Hampshire Clinic 65 65
The Lincoln Hospital 32 32 The Harbour Hospital1 40 40
The Manor Hospital 23 23 McIndoe Surgical Centre2 30 30
The Meriden Hospital 61 52 The Mount Alvernia Hospital 90 90
The Oxford Clinic1 22 The Princess Margaret Hospital 80 80
The Park Hospital 93 92 The Ridgeway Hospital 50 50
The Priory Hospital 118 118 The Runnymede Hospital 52 52
The Sandringham Hospital 35 35 Sarum Road Hospital 48 48
The Saxon Clinic 40 40 The Somerfield Hospital 48 48
The Shelburne Hospital 44 31 Werndale Private Hospital 28 28
St Edmunds Hospital 40 40 The Winterbourne Hospital 38 38
Three Shires Hospital4 53 54 Total5 2 979 3 038
1 Core hospitals held under long-term lease.
2 Hospitals operated under management contract.
3 NHS partnership hospitals.
4 Interest in associate.
5 There are 41 hospitals owned by GHG PropCo and held under
long-term leases by BMI OpCo which are included in the table above.
Netcare Limited Annual integrated report 2012 85CLINICAL GOVERNANCE REPORT: UK
GHG works within a robust clinical
governance framework, which aims to ensure
that risks are managed effectively and that
there is continuous improvement in the
quality of care delivered to our patients.
Introduction Ensuring the highest
Each hospital has a local framework standards for consultants
through which safety, effectiveness and All consultants are granted and retain
patient experience are monitored and practicing privileges based on their
analysed. The Clinical Governance ongoing ability to provide a standard of
Board provides oversight of clinical excellence in their particular specialty.
governance, ensures that lessons at All are registered with the General
local level are communicated across Medical Council (GMC) and hold a
licence to practice. The work we have
the business and drives quality
done to support the revalidation
improvement.
process will stand us in good stead
Our standards are continuously following the announcement from
reviewed to ensure alignment with the Secretary of State for Health that
regulations, the latest research, national the process will commence in
guidelines, accreditation requirements December 2012.
and contractual obligations. To maintain
The revalidation process comprises a
the highest standards we must support new system of checks that will ensure
clinical outcomes through providing the UK’s 230 000 licensed doctors are
our patients with the appropriate keeping up to date with the latest
environment, equipment and developments in their fields and are fit
consultants, as well as staff who to practise. Based on annual
99.2%
deliver excellent care. appraisals, the system will include
feedback from patients, doctors, nurses
To this end we continue to keep up with
PATIENT SATISFACTION and other colleagues. All doctors have
the latest technological developments
been assigned a responsible officer
RATING OF GOOD, VERY in healthcare through focused
and must be registered with a
GOOD AND EXCELLENT investment. Recruiting and retaining
designated body. GHG is the
appropriately skilled staff is also
designated body for over 250
critical, as is providing opportunities for
consultants and the Group Medical
learning and development for our staff. Director is their responsible officer. The
For more on our learning and first revalidation of GHG’s consultants
development initiatives see Our people: will commence in April 2013.
UK report on page 88.
There has been ongoing development
Patient safety
of reporting systems to facilitate the Infection prevention and control
best available data on which to base This focus continues under the
our clinical governance processes. In leadership of the GHG Head of
addition to being used for external Infection Prevention and Control in
reporting requirements, this data liaison with the link nurses in BMI
informs clinical governance at all hospitals. The infection prevention and
levels within GHG. control protocols which have been
86 Netcare Limited Annual integrated report 2012Clinical governance report | UK OPERATIONS
named internationally as Care ongoing compliance. All patients replacement surgery will be
Bundles, have been implemented in all undergo an appropriate VTE risk implemented for all private patients in
hospitals and are subject to ongoing assessment to inform an individual the coming year.
audit. Rates of healthcare-associated prevention strategy.
infections in BMI hospitals compare Patient experience
favourably with the NHS, notably Effectiveness We continually monitor our patients’
against the two infection rates Unplanned returns to theatre experience of care through our patient
published by the Health Protection and unplanned readmissions satisfaction survey, which is
Agency: methcillin resistant administered by an independent third
As medical technology and clinical
staphylococcus aureus (MRSA) party. We continue to focus on
quality continue to advance, the
bacteraemias and clostridium difficile. increasing the response rate, and in
average length of hospital stay for
This is due to effective pre-admission the 12 months ending September 2012,
BMI patients gets shorter. All surgery
assessment and the high standard of over 69 000 patients completed the
carries a risk of complications and questionnaire. Each hospital analyses
clinical care delivered during and
these may result in an unplanned the monthly reports and implements
after surgery.
return to theatre. The decline in total appropriate action to address any
GHG had 0.63 cases per 100 000 bed number of unplanned returns to issues of dissatisfaction or areas that
days of clostridium difficile from theatre is indicative of fewer have scored lower than others. We are
October 2011 to September 2012 complications. pleased to report that our rating for
while the NHS reported 16.7 cases overall quality of care (good, very
per 100 000 bed days. Unplanned returns to theatre good and excellent) is 99.2%
October to September
GHG had no cases of MRSA (2011: 99.1%).
0.25
bacteraemia from October 2011 to
Looking ahead
Rates per 100 theatre cases
September 2012 while the NHS reported 0.20
0.213
Informed by patient feedback and our
0.189
1.2 cases per 100 000 bed days.
0.177
0.15 continued clinical governance activities
0.156
Environmental cleanliness is also an and programmes, our focus areas for
important factor in infection 0.10 the year ahead will be to:
prevention. Our patients rate the
0.05 s¬ ¬&URTHER¬DEVELOP¬AND¬ENHANCE¬THE¬
cleanliness of our facilities highly, with
availability of meaningful
cleanliness of rooms scoring 93.4% 0
performance and quality indicators
and bathrooms 93.1% in our patient 2009 2010 2011 2012
for patients, consultants, referrers
satisfaction survey.
The rate of unplanned readmission and commissioners;
Venous thromboembolism due to clinical complication within s¬ ¬!UDIT¬COMPLIANCE¬WITH¬#ARE¬
GHG has been awarded venous 31 days to BMI hospitals reduced from Bundles to ensure that these have
thromboembolism (VTE) Exemplar 0.228 in the prior year to 0.198 for been effectively implemented,
Centre status by the Department of October 2011 to September 2012. measured by infection rates;
Health across all its hospitals, a first This is the lowest in four years.
s¬ ¬%XTEND¬THE¬COLLECTION¬OF ¬PATIENT
for an independent healthcare group.
This provides further assurance of Patient-reported outcomes reported outcomes to include hip
and knee replacement for private
patient safety and care in minimising All NHS patients who have undergone
patients; and
the risk of deep vein thrombosis and hip and knee replacement, varicose
pulmonary embolism. GHG vein surgery or inguinal hernia repair s¬ ¬!UDIT¬COMPLIANCE¬WITH¬PRESCRIPTION¬
established a national thrombosis are given the opportunity to complete of VTE prophylaxis.
team, chaired by the Group Chief both pre- and post-operative
Pharmacist, which is responsible for questionnaires. This provides data on
implementing the Venous Thrombosis the health gain achieved from the
Prevention Policy. The policy was surgery. For the year under review,
launched alongside a new VTE risk patients treated by BMI have
assessment tool, patient information demonstrated above-average health
leaflets, prevention protocols, training gain. Measurement of patient-reported
packages and regular audits to ensure outcomes for hip and knee
Netcare Limited Annual integrated report 2012 87OUR PEOPLE: UK
GHG remains committed to investing in
our people from both a development and a
recognition perspective to ensure that our
patients are treated in a safe and caring way.
Introduction GHG’s approach to manage headcount
by reviewing each vacancy following
The structural changes introduced by
a resignation to ensure that, where
the Chief Executive Officer (CEO) in
possible, teams are restructured or
2011 continued in 2012. The senior
existing staff are developed to fulfil
leadership team has been expanded to
requirements. In addition, localised
include regional directors and a wider
structural reviews have resulted in
group of senior corporate directors.
This more inclusive structure has some redundancies.
enhanced our capability to properly Staff turnover increased to 22.5%
plan for succession. (2011: 19.0%), which is a reflection of
Three committees have been renewed activity in the UK healthcare
established to bring more operational employment market as the newly
insight to the strategic focus of created Clinical Commissioning
the senior leadership team. The Groups seek to recruit their workforces.
committees are the Corporate Board,
representing all corporate support Training and development
functions; an Operations Board BMiLearn
representing the regions and hospitals;
GHG’s commitment to developing high
and the Support Functions representing
sales and marketing, information quality talent continued with the launch
technology (IT) and procurement. of BMiLearn. This online learning
system greatly extends our portfolio
Employee distribution of training resources and was
146 195 Employee numbers have decreased by
7.3% to 7 449. This is in line with
implemented in all sites. With open
access to all materials for all staff,
E-LEARNING MODULES
COMPLETED
Employee turnover
32 080 Permanent employees at the beginning of the year
2012
8 034
2011
8 234
TRAINING DAYS Increased: 1 088 1 330
DELIVERED
Appointments 1 088 1 330
Decreased: 1 673 1 530
Resignations 1 153 940
Retirements 102 75
Dismissals 106 113
Deaths 12 10
Redundancies 128 255
Other 172 137
Permanent employees at the end of the year 7 449 8 034
Annual employee turnover (%) 22.5 19.0
88 Netcare Limited Annual integrated report 2012Our people | UK OPERATIONS
a total of 1 888 courses were delivered Recruitment cost reduction
covering 68 426 training interventions.
The strategy to move more recruitment
BMiLearn has been extremely well activity in-house and onto social media
received and generated much interest platforms has been highly successful.
and activity. Sites have welcomed the This approach has delivered cost
extensive opportunities for training and savings in agency fees of over
development which can be easily £1.5 million and savings on print
assimilated within the workplace and and advertising media of £400 000.
during work time. Our Skillport online
training system continued to provide The revised recruitment process
mandatory training courses. comprises three levels:
s¬ 3
¬ ENIOR¬MANAGEMENT¬RECRUITMENT¬
Succession planning
conducted in conjunction with a
In ensuring robust succession
small number of trusted partners;
planning, GHG recognises the need for
a high calibre management pool and s¬ -
¬ IDDLE¬MANAGEMENT¬CONDUCTED¬
succession strategies that direct in-house using trusted partners and
senior-level career paths. Initiatives to social media; and
strengthen talent management
s¬ (
¬ IGH¬VOLUME¬RECRUITING¬EXTENSIVE¬
processes during the year included:
use of social media platforms for
s¬ -
¬ AKING¬THE¬AVAILABILITY¬OF ¬POSITIONS¬ targeted sourcing.
transparent by advertising all vacant
The success of this process has
roles internally;
received both internal and external
s¬ ¬5SING¬ASSESSMENT¬CENTRES¬FOR¬ALL¬ recognition. The recruitment team won
hospital manager roles to ensure Team of the Year at the Night of the
consistency and provide data for Stars Awards and were finalists in the
development planning; and prestigious Recruiter Magazine
s¬ ¬)NTRODUCING¬A¬NEW¬$IRECTOR¬OF ¬ Recruitment Team of the Year Awards.
Operations role to provide
accelerated development to hospital
manager roles coupled with open
advertisement and assessment
centre selection.
To further support the training and
development of management and
senior leaders, BMI has funded places
on Ashridge Management College’s
Advanced Management Programme for
high potential individuals identified
through the assessment centres. BMI
has worked with Ashridge faculty to put
together an extended programme of
events linked to the course to which a
wider pool of BMI managers are
invited.
Netcare Limited Annual integrated report 2012 89OUR PEOPLE: UK (continued)
Employee attraction Employee engagement
and retention and communication
Strong emphasis has been placed on Throughout the year a series of
creating an attractive package of strategic workstreams has enabled line
benefits for employees. Benefits include managers to provide operational input
private medical cover, friends and at an early stage in implementing
family discounts, free health programmes or initiatives. The
assessments, discounted gym and workstreams draw on experience and
fitness class membership, a expertise across the business,
confidential counselling and advice including hospitals, regions and head
helpline and life insurance. In addition, office to gain a full exchange of
staff have access to a portfolio of perspectives. A reconfigured set of
low- or no-cost initiatives including workstreams will reflect the priorities
of the new financial year.
Christmas chocolates, gifts for
international nurses’ day, a cycle to Start the Year event
work scheme, restaurant vouchers and
Each year a conference is held for the
bonus bonds. Staff are also
top 200 managers in the business to
encouraged to get involved in
reflect on the achievements of the past
community and charity initiatives such
year and set out the objectives for the
as workplace giving schemes and
year ahead. In the year under review
participating in national charity events.
this event was held at the Royal College
Staff retention has been further of Physicians in Regents Park and, in
strengthened due to new opportunities addition to presentations from the CEO
for career progression emerging from and Chief Financial Officer (CFO),
the restructuring at senior levels. included workshops on major initiatives
supporting the upcoming year’s
Night of the Stars
objectives.
In line with the South African operations
the Night of the Stars Awards recognise Pulse survey
exceptional staff contribution. A monthly The GHG staff “pulse survey” was
award scheme provides an opportunity again conducted in 2012, and achieved
to acknowledge examples of the same high level of participation.
extraordinary commitment to patients Staff continued to rate their enjoyment
and colleagues, culminating in of working for the company very highly,
identifying the Carer of the Year. Annual and the vast majority indicated that
awards include the Tell the World they would recommend GHG as a
Award for community outreach, the Star place to work. The notable
Idea Award, the Best Patient Care improvement in staff satisfaction is
Award, the EcoNomics green Award, particularly satisfying and suggests
the Star Team Award, the Florence that GHG is managing to empower
Nightingale Award and the Star the regions and make full use of the
Hospital Award. infrastructure created over the last
four years.
The Night of the Stars gala event was
held at Madame Tussauds in a vibrant
evening at this famous venue which
gave all participants a real sense of
recognition while celebrating
exceptional care, service, initiative
and team spirit.
90 Netcare Limited Annual integrated report 2012Our people | UK OPERATIONS
Looking ahead launching a wider range of modules
covering clinical topics and head of
The business has set challenging
department-level management
targets for the year ahead against a
sessions, to ensure all staff are best
backdrop of difficulties within the
equipped to perform effectively;
health sector but slowly emerging
confidence in other sectors. The focus s¬ ¬#OMMUNICATING¬REGULARLY¬WITH¬STAFF ¬
areas for the coming year include: and wider stakeholders regarding
the prominent UK debt refinancing,
s¬ #
¬ ONTINUING¬TO¬DEVELOP¬PERFORMANCE¬
to ensure people are well informed
management to contribute to a
culture of high performance, throughout the process; and
including new tools for setting key s¬ ¬-EETING¬THE¬REQUIREMENTS¬OF ¬NEW¬
performance indicators (KPIs) and legislation that requires that all staff
managing performance; within a company are registered
s¬ ¬%NSURING¬THE¬WORKFORCE¬STRUCTURE¬IS¬ with a pension scheme, with BMI’s
well adapted to individual hospitals, deadline set at September 2013.
considering both hospital size and Development is underway and will
source of business. This includes be supported by extensive internal
reviewing structures, fixed versus communications.
variable work patterns and KPIs;
s¬ ¬#ONSOLIDATING¬THE¬"-)¬TRAINING¬AND¬
development tool with personal
development planning, and
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