What is the social challenge?

The cost of providing healthcare is a significant societal challenge that creates barriers to accessing necessary care, impacting affordability, accessibility, and healthcare inequality. The Apex Surgi Centre Day Hospital is a cost-effective alternative to general hospitals. It eliminates the need for overnight stays, streamlines processes, and optimizes resource utilisation to reduce expenses. Medscheme reports that approximately 70% of surgical procedures in the private sector, specifically in acute hospitals, are suitable for day hospitals.

Our response:

The Summit Private Equity Fund I acquired a significant 55% stake in Apex to support the Apex Surgi-Centre group in acquiring additional equipment for Apex Soweto. The objective of this investment is to expand the number of facilities owned by Apex over time.

Crestcare, majority-owned by the Fund (74%), has been contracted to assist Apex Soweto with operational management. They play a crucial role in optimizing facility operations, securing additional doctors with diverse medical specialties, and implementing cost management measures. Although patient numbers did not meet initial forecasts, Crestcare's interventions have resulted in increased treatment rates and operational efficiencies.

Furthermore, Apex Soweto has received grant funding and technical assistance from British International Investments. This support enables the implementation of community awareness programs to promote the services offered at Apex Soweto. These programs were initiated in the fourth quarter of 2022, aiming to raise awareness and engage the surrounding community.

Who are the stakeholders?

The catchment area surrounding the Apex site is densely populated, with a population of over one million people residing within a 15-minute radius. An independent commercial due diligence report concluded that the facility is strategically positioned, easily accessible, and ideally located to serve the community.

The report also highlighted a shortage of approximately 24,000 patient day beds within the catchment area, indicating a significant demand for healthcare services. To address this need, Apex Surgicentre holds additional licenses to establish and operate more day hospitals, expanding their impact on the community.

In collaboration with Summit, Apex is currently evaluating the commissioning of a second Day Hospital in the Waterfall area of Johannesburg. This expansion will further enhance their ability to provide quality healthcare services to a wider population and meet the growing demand for accessible medical care.

What is the scale of impact?

The Fund's investment, in collaboration with Crestcare, aims to significantly increase the occupancy of Apex Soweto in the next 18-24 months, ensuring the facility's long-term viability and success.

Job creation:

As Apex Soweto's facility utilization rate reaches and exceeds the targeted rate of 50%, it is expected that 16 additional employees will be hired, increasing the total from 13 to 29 over an 18-24 month period. Apex's plan for a second Day Hospital in Waterfall, with a license for 30 beds and four theatres, will result in a minimum of 20 permanent employees being added to the workforce.

Community upliftment:

Located in Soweto, Apex SurgiCentre offers accessible and affordable healthcare services on the doorstep of the local community and surrounding areas. Crestcare, under the guidance of Summit, has implemented several initiatives aimed at increasing the utilization of the hospital. These efforts are focused on ensuring that more individuals can benefit from the quality healthcare provided by Apex SurgiCentre.

Transformation, diversity & inclusion:

Through the Fund's investment, there has been a significant increase in black ownership in Apex Soweto, rising from 49.6% to 77.7%. Black women's ownership has also increased from 0% to 15.7%. In terms of diversity and inclusion, 69.2% of the current 13 employees are black women, and 25% of the executive and senior executive management positions are held by black women. Apex Soweto is committed to promoting diversity by aiming to have at least 50% of its employees be black women, as the organisation grows and establishes new facilities.

What if Apex Soweto did not exist?

Apex Soweto provides accessible and affordable day hospital healthcare, offering quality services to the local community. Without it, residents would have to rely on more expensive acute private hospitals that lack the specific benefits and convenience provided by a dedicated day hospital. Apex Soweto fills a crucial gap by ensuring access to quality, affordable healthcare in a well-located facility.

What is the risk?

Apex Soweto operates within a rented medical services building, with auxiliary facilities managed by the landlord. Crestcare, as the operations manager, collaborates with Apex to develop and implement ESG policies and frameworks. Staff shortages have posed challenges in adopting new processes, but overall ESG operations are adequately managed, considering the facility's current utilization. A comprehensive risk report was formulated in Q4 2022, identifying no material risks. Proactive risk mitigation measures will be implemented starting Q1 2023. The ESG Value Add Action Plan tool, introduced in Q4 2022, will be fully operationalized by Crestcare in Q2 2023. The facility has a competent theatre manager, ensuring staff satisfaction and high patient satisfaction.