Mediclinic sees limited hit from Swiss tariff changes

South African private hospital group Mediclinic International said on Monday that its Swiss platform, Hirslanden, is expected to take a limited hit in 2018 after the Zurich Cantonal Parliament voted not to approve a proposed levy on privately insured patients treated in listed hospitals.

Mediclinic said the Swiss Federal Government has released proposed adjustments as a transitional solution while healthcare providers and funders continue to negotiate and agree a revised tariff structure.

The government proposal is targeting annual savings of around CHF700m across the public and private outpatient sectors.

Mediclinic pointed out that outpatient services contribute less than 20% of Hirslanden revenues. It said that due to its implementation date on 1 January 2018, the impact on Hirslanden is expected to be limited in the financial year to 31 March 2018.

Based on initial analyses of the complex proposal, the expected annualised impact on Hirslanden outpatient revenues could be around 10% before any mitigating actions are considered which could include improved utilisation and increased efficiencies.

Hirslanden chief executive officer Ole Wiesinger said: "We acknowledge that the Zurich Cantonal Parliament has followed the recommendation of the Finance Commission and voted not to approve the proposed Zurich VVG levy and recognise that ongoing dialogue and engagement with the relevant public authorities is key to ensuring that we can continue to deliver high-quality, cost-efficient, healthcare to our patients."

At 1427 BST, the shares were up 4.3% to 729.50p.