BUSINESS MODEL
We create value for our stakeholders by pursuing sustainable growth.
The Group’s business model depicts how our integrated business activities, products and services drive efficiencies in the healthcare value chain, and how these aid the delivery of sustainable healthcare services and easier access to affordable, quality healthcare for scheme members.
Our objective of providing health administration and ensuring effective health risk management is influenced by our external environment, risks and opportunities, and stakeholder expectations.
HEALTHCARE VALUE CHAIN
Michael Porter describes the term value chain as a collection of processes, inputs and outputs that take place to produce a product or service.
The healthcare value chain, like most other industries, includes manufacturers, wholesalers, distributors, providers, professionals (nurses, midwives, etc.), and consumers (patients); with the added complexity of different levels of government, their policies, and secondary industries such as private providers and insurance companies. As a result, the healthcare value chain is complex, and highly interdependent – sometimes making it difficult to see the real value of the care being delivered, and its actual cost.
AfroCentric has grown its footprint across the healthcare industry through strategic acquisitions and partnerships. Our Group structure consists of operating companies that provide products and services in the healthcare sector, positioning us to be able to provide integrated healthcare solutions.
For our desired output to be achieved and for value to be created, one or more of six distinct capital inputs are increased, decreased or transformed into outcomes, and some trade-offs between them are incurred through our business activities. These six capitals are outlined below and have been linked to relevant strategic objectives. Furthermore, the business model is illustrated here.
OUR CAPITALS
Financial capital
AfroCentric is equity funded, and the pool of funds that enables the Group’s strategy consists of funds reinvested in the
Group, returns on investments and revenue generated from services. Financial capital is increased through diversifying our
revenue sources, cost consciousness and being more efficient, which requires intellectual, manufactured and human capital,
and greater sources of income. AfroCentric is committed to developing our human capital skills base and the performance of
our systems, both of which require financial investment.
Intellectual capital
The Group’s intellectual capital comprises knowledge-based intangible assets such as our systems and processes, uniquely
tailored IT systems, licences (such as the DBC licence for back and neck treatment in South Africa and the fraud software)
including business and industry knowledge. Intellectual capital is critical to our ability to sustain and grow the business.
AfroCentric constantly seeks to increase its intellectual capital by investing in improvements in efficiencies and streamlining
operations. Although these investments will reduce financial capital, they will drive efficiencies and continue to increase overall
value in the long term.
Manufactured capital
Our manufactured capital comprises the platforms that we use to provide services. The Nexus IT system, which is used to
enhance security and the efficiency of data management, is one example. This drives overall efficiencies leading to financial
benefits, as well as improved client service as we manage patients’ data to the benefit of their overall health.
Human capital
AfroCentric relies on our human capital, being the skills, wellbeing and motivation of our employees, contractors and service
providers to generate value. Our employees are skilled across a range of industry-related competencies to provide exceptional
client services and functions such as call centre support, operations, administration and actuarial analysis. We are committed
to improving our recruitment practices, skills and talent programmes and diversity. The Group has its own learning academy
dedicated to the empowerment and training of our employees.
Social and relationship capital
Social and relationship capital refers to the quality of AfroCentric’s relationships with our material stakeholders, particularly
the communities we operate in. We are invested in South Africa with the purpose of promoting a healthcare delivery system
that prioritises quality while improving the cost of healthcare and people’s lives. In order to achieve this purpose, the Group
has developed a positive reputation and trusted relationship with its stakeholders. AfroCentric is committed to transformation,
community upliftment and the sustainability of South Africa.
The Group actively participates and invests in enterprise development (“ED”), corporate social investment (“CSI”) and socioeconomic development (“SED”) in South Africa.
Natural capital
The AfroCentric Group requires natural capital such as land, water and energy to provide its services. Despite our low carbon
footprint, we are a sound corporate citizen, and are committed to monitoring and measuring our greenhouse gas (“GHG”)
footprint. We are aware that carbon tax legislation may have a financial implication.
