Medi-Clinic Says South Africa Health Plan Won’t Harm Margins

Medi-Clinic Corp., an operator of private hospitals in South Africa, said the government’s plan to create a compulsory medical-insurance program won’t squeeze profit margins.

Contributions to the national health insurance plan will be used to improve the public health system, according to the government. The nation is also considering a cap on prices charged by private hospitals.

While there are “obviously many uncertainties” on pricing, the Health Ministry’s draft policy released last week doesn’t indicate a “a squeeze on margins or profitability,” Koert Pretorius, chief executive officer of Medi-Clinic’s southern Africa operation, said in Johannesburg today.

Medi-Clinic shares pared an earlier decline of 4.7 percent to close 0.5 percent lower at 30.61 rand in Johannesburg.

Privately insured South Africans on average have access to medical benefits worth six times more than those who rely on the state, which serves 84 percent of the population of 50.6 million, according to the ministry.