24 / 136
AfroCentric INTEGRATED ANNUAL REPORT 2016
22
CHAIRPERSON’S REPORT
The Group
leverages its
clinical, actuarial,
data analytics and
health intelligence
capability to identify
pockets of inefficiency
and so creates value though
negotiating fairer prices of these
items in order to make healthcare
more affordable. We want to see
more of each healthcare Rand being
spent on patients care; and improving the
effectiveness of the system will mean more
value created for members.
Medscheme is the largest manager of medical schemes
with approximately 3.7 million lives under
our management.
Dr Anna Mokgokong
INTRODUCTION
I am proud to present the AfroCentric Group’s Integrated Annual Report at the end of a year that
saw continued economic upheaval and pressure on the healthcare sector. I believe that we
weathered the storms with resilience and enjoyed healthy growth in the number of lives under
our care. In part, this is thanks to our success in securing the administration of Polmed, effective
from 1 January 2016.
The year was one of internal consolidation, with the acquisition of Pharmacy Direct (Pty)
Limited (“Pharmacy Direct”), Curasana Wholesaler (Pty) Limited (“Curasana”) and a 26%
interest in Activo Health (Pty) Limited (“Activo Health”) collectively termed the (“WAD
Acquisition”) and the Sanlam investment into ACT Healthcare Assets. Our current
positive financial standing places us in the perfect position to pursue our ambitions
for growth.
The Group is positioned as an integrated healthcare company with the expansion
of the business into new areas of healthcare management, represented by
interests in the pharmacy sector and ICT solutions for health. We hold
the number one market position in managed care and are proud of our
industry-leading expertise and our long track record as a medical scheme
administrator.
However, we continue to operate in a difficult environment. The
weakness of the Rand has impacted on the purchase price of
medicines and equipment, contributing to healthcare inflation.
Fraud, waste and abuse is a serious concern for the industry,
with fraudulent claims and over-servicing (due in part to a ‘fee
for service’ provider payment model) also increasing total
healthcare costs. We take the elimination of fraud seriously
and invested R100 million in ‘Insurance Fraud Manager’, a
fraud detection software application.
TRANSFORMATION
I am proud of AfroCentric’s status as a majority black-
owned company and of the role transformation
plays in our business. The main purpose of
transformation is not to drive value creation, but
to support the legislation that advances our
Constitution. Transformation does however
add value as diversity ignites innovation.
We believe in the importance of good
corporate citizenship and promote this
through our transformation strategy,
our CSI policy, and our ED and SED
practices.
The B-BBEE codes of
practice were revised in
2015 to address abuse,
close loopholes and
reflect a more actively
interventionist