Afrocentric

AFROCENTRIC HEALTH SOLUTIONS

Improving operational efficiency while still pursuing opportunities for organic growth and geographical expansion.

OVERVIEW

AfroCentric Health Solutions (“AHS”) is the international cluster for Medscheme Holdings’ non-South African businesses and interests, with operations in Namibia, Swaziland, Zimbabwe and Mauritius. Our association with Swazimed unfortunately came to an end. However, we are in the process of establishing new business in Swaziland. The business also has presence in Botswana and Kenya through partnerships with local businesses, and is pursuing further growth and diversification opportunities in the East Africa and West Africa regions. The business thrust is coordinated healthcare delivery through an integrated value chain, with the ultimate goal of increasing the quality of care in these countries.

Each business in the respective countries is governed by its own Board of Directors and managed by dedicated management teams.

AHS businesses draw value from the AfroCentric Group through shared services to drive operational efficiencies and access to best practice as well as up-skilling opportunities from centres of excellence within AfroCentric.

The international market, especially in developing economies, provides AHS with opportunities for integration of the healthcare value chain and flexibility in funding models.

The expertise in health insurance administration that resides within AHS and the partnership with Sanlam position the business for growth outside South Africa.

PERFORMANCE SUMMARY

• Anchor client in Namibia, Namibia Health Plan (“NHP”), reached a record 30 000 principal members (“lives”)
• Signed up a new IT client in Malawi – Met Health. This is the third IT client outside Medscheme-administered schemes following Cimas Medical Aid Society and First Mutual Life (“FML”) in Zimbabwe

STRATEGY

AHS focuses on membership growth in all territories, and consistently exceeds targets in the majority of businesses. This strategy has been successful, delivering revenue and earnings growth of nearly 60% over the last six years. Attention is now focused on improving operational efficiency, while still pursuing opportunities for organic growth and geographical expansion.

Our clients’ success depends on innovation and automation to reduce input costs and provide seamless service. We have lined up several solutions, improving the way in which members, service providers and intermediaries are able to transact and share information. Our next focus area is partnering with organisations at the cutting edge of healthcare with the objective of eliminating wastage, fraud and abuse.

AFROCENTRIC STRATEGIC OBJECTIVES			AFROCENTRIC HEALTH SOLUTIONS’ ALIGNMENT TO THESE
	Enhance shareholder value		The renewal of our core administration contracts provides certainty and stability in the business for planning purposes.
	Maximise growth opportunities		The client uptake on our new services from our managed care entity and associate subsidiaries has been pleasing. Clients recognise the value of our suite of services and our expert providers.
	Improve efficiencies through cost consciousness		The business emphasises prudence – every employee embraces cost consciousness in their daily activities. We empower and reward our employees for innovative solutions.
	Diversify revenue sources		The introduction of Allegra, IFM, DBC, Pharmacy Direct and Helios is intended to achieve this goal. Decision-making is comparatively slow in our markets, but we are optimistic this will improve in the next 12 to 18 months.
	Deliver exceptional client service		NHP has won the Professional Medical Review (“PMR”) Africa award for the best service in Namibia for 2016.

OPPORTUNITIES AND CHALLENGES

To realise opportunities across the continent, it is critical that AHS is culture conscious. South African healthcare funding and practice is unique on the continent. The business model for South Africa must be adapted to local regulatory, industrial and social customs. The business is sensitive to the socio-cultural barriers that must be overcome during multinational trading to smoothly integrate new acquisitions and partnerships into the core business.

Sanlam’s presence in Africa and other emerging markets presents an opportunity to enter into new territories with a partner who has an established brand equity, a distribution network and deeper understanding of the markets.

OUTLOOK

Partnerships have become more relevant to the success of our efforts to counter healthcare inflation and enable access to quality care. Thus, we have begun to enter the service provision space, due to the critical importance of this pillar in healthcare. We are looking to collaborate with Sanlam in the rest of Africa.

We are engaging with the Namibia Funders Association to roll out IFM to the industry; and with the Zimbabwean Healthcare Funders Association to roll out Allegra Switching Solutions.

Visit the AfroCentric Health Solutions page on the AfroCentric website, http://www.afrocentric.za.com/bus-hea-solutions.php