Our stakeholders
We exist to enhance the quality of our stakeholders’ lives. Engaging meaningfully with our various stakeholders is therefore critical to ensure we are meeting this aim.
AfroCentric considers its stakeholders as individuals and groups who are interested in, or affected by, our activities. We understand that the levels of engagement will vary between stakeholder groups based on their levels of influence or interest. We therefore analyse and classify our stakeholders according to their interests and influence to enable tailored levels of engagement to meet their unique needs.
The Board and executive management adopt an inclusive approach to stakeholder management – we engage our stakeholders responsively, constructively, collaboratively and transparently to address their material needs, interests and expectations and respond in a mutually beneficial manner.
Our Social and Ethics Committee provides governance oversight to stakeholder engagement.
GOVERNMENT AND REGULATORS
Various levels of government determine the environment in which we operate.
Organisations that monitor and regulate our environment include:
- Council for Medical Schemes (CMS)
- Medicines Control Council
- South African Pharmacy Council
- The JSE
- Competition Commission
- Financial Sector Conduct Forum
- South African Revenue Services
- Integrated report and AFS
- Interactive Group website
- Participation at public and industry forums
- Publications
- A critical recurring concern from both government (NDoH) and regulators (CMS) across the sector is the lack of material growth in the number of medical scheme members over the years
- CMS published a circular on low-cost benefit options and demarcation products and the need for them to be wound down by no later than March 2022
A vital contribution that AfroCentric has made on this debate is the submission of technical commentary as an alternative to pursuing the summary decision to wind down demarcation and low-cost benefit option products by 31 March 2022. We recommended that CMS undertake a more consultative approach.
INDUSTRY BODIES
Bodies that oversee healthcare-related matters:
- Body of Healthcare Funders of Southern Africa
- Health Professions Council of South Africa
- Hospital Association of South Africa
- Doctors’ Health Council
- Public Health Enhancement Forum
- Business for South Africa
- Integrated report and AFS
- Interactive Group website
- Participation at public and industry forums
- Publications
- The role of medical schemes within the NHI environment
- Legal challenges in the draft NHI Bill as gazetted by parliament
- Medical scheme sustainability in the face of the COVID-19 pandemic
- The need for medical schemes and other industry players to support government in the COVID-19 pandemic response
- Ongoing engagements with government and regulators regarding the NHI Bill
- Ongoing engagements with government and regulators through various processes to understand strategies for COVID-19 and determine how best AfroCentric can participate and support
- Engagement with provinces to indicate capability to support and assist in the roll out of the COVID-19 pandemic response, e.g. liaising with private hospital groups on bed capacity and how providers (GPs, specialists and nurses, as well as pathology and radiology services) can be contracted to help with addressing the patient burden (especially for critical care)
EMPLOYEES AND TRADE UNIONS
- Integrated report and AFS
- Ongoing dialogue through established channels
- Forums
- Company intranet and newsletters
- Managers/team dialogues
- Surveys and employee presentations
- Focus group sessions
- Employee culture campaigns
- Conditions of employment
- Wages and benefits (wage negotiations)
- Creation of a positive working environment
- Diversity awareness
- An inclusive journey
- Reward and recognition
- Strong, ethical leadership
We created a culture roadmap based on employee feedback through our ACTFirst campaign and focus group sessions, which was rolled out during the 2021 financial year.
We have established the following forums as part of our stakeholder engagements to deepen dialogue; namely:
- National Bargaining Forum: This will assist in streamlining all our annual wage negotiations
- Monthly Union Meetings: These meetings are meant to inform the union on all our current and future strategic projects. This forum is also used to provide updates on topical issues like COVID-19/return-to- work project/work-from-home projects and the like
- Chairpersons Forum: This forum is used to groom Chairpersons within the Group, and to have a panel of available Chairpersons in any given month
OUR CLIENTS – MEDICAL SCHEMES
Our clients are also our direct link to the end-user of our services, which is the medical scheme members.
Our schemes include:
- Open schemes: Bonitas, Fedhealth, Medshield, Hosmed
- Closed schemes: AECI, Barloworld, GEMS, Horizon, MBMed, MEDipos, NedGroup, ParMed, POLMED, SABC, SAMWUMED
- Outside SA schemes: NAMMED, Namibia Health Plan, Sovereign Health
- Integrated report and AFS
- Presentations
- Meetings
- Email communication
- Symposiums
- Voice of the customer survey
- Member retention in the current context
- Maintaining service levels during the pandemic
- Addressing co-payments to address member concerns
- FWA
- Understanding our unique value proposition
- Sound claims management
- Technology innovations to reduce cost and improve service
- Culture journey to support service excellence
- Leveraging the elements of our value chain to address the rise in healthcare costs and increase affordability
- Significant engagement around models of contracting with doctors and hospitals to address the issue of co- payments
- Supplemented administration and managed care services with additional contracts
OUR SHAREHOLDERS AND INVESTORS
- Institutional and individual investors
- Integrated reports and AFS
- Corporate website
- SENS announcements
- Investor days and roadshows
- One-on-one meetings with executive management
- Interim and annual results presentations
- Sustainable value creation
- Consistency in delivery on strategy
- Consistent financial performance
- Sound investment returns
- Working capital and capital allocation
- Interest in expanding business to rest of Africa
- ESG issues
- With effective delivery against our growth strategy, we achieved:
- ›Net asset value (NAV) per share of 5.67% (2020: 5.44%)
- We remain committed to engaging with our investors in an open and transparent manner
- We communicate our value creation story and strategy through our Integrated Report
- AfroCentric does not currently have aspirations to expand further into Africa, and we have exited our Zimbabwe and Eswatini operations during the year
- Enhanced focus on ESG issues and reporting
Stakeholder matters in focus
We seek to maintain high levels of corporate transparency. This serves to build and maintain trust with our stakeholders, growing social capital that enables value creation and protects against value erosion. Below is a summary of key matters that arose as areas of heightened stakeholder interest during the year.
As the South African healthcare system strives to fast-track COVID-19 vaccinations, the Group has been on the frontline – leveraging our diversified healthcare business to support this critical endeavour.
We believe that our efforts align with our purpose-driven model and have served to demonstrate our capability to support government’s healthcare ambitions.
To better understand how we are responding strategically to support government’s ambitions to enable universal access to healthcare within an NHI context, please see:
- Creating value through purpose, IFC
- External context – Access and affordability,
For more information on our role in the national vaccination roll out, please see:
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Access to healthcare regulators and medicine |
In early 2019, several healthcare providers and the National Health Care Professionals Association made allegations of unfair treatment by medical aid schemes based on race and ethnicity. As a result, the CMS launched an investigation into these allegations in terms of its regulatory mandate.
It is our fiduciary duty to safeguard members’ funds and their access to affordable quality healthcare. Notably, the providers we investigate constitute less than 2% of the total practices paid by Medscheme. At all times, we pursue forensic processes that are fair, transparent and within the law. Following the release of the Section 59 Investigation Panel Interim Report, we submitted a formal response.
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The Group continues to follow a prudent approach to capital management, and working capital management has likewise been an area of heightened focus for the year.
For detail on these topics, please see our CFO review.
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The first arbitration case determined in the Neil Harvey and Associates (NHA) case was NHA’s claim regarding Medscheme’s use of a copy of an offline and online broker software module known as the EMI Broker software from 2005 to 2007. Medscheme had provided the specifications and assisted in developing this software and therefore considered the organisation entitled to use the software during the above period. Claims relating to this matter amounted to approximately R24 million (as a royalty) plus interest, which NHA sought to claim from about 2005.
The dispute over this issue was heard in July and August 2020, and an award was given during October 2020. The arbitrator ruled that NHA was entitled to only R2.7m, with interest only from October 2020 to the date of payment and costs.
The arbitrator, however, found that Medscheme’s contribution fell short of the contribution required for joint authorship and ownership of the software, but as indicated, limited NHA’s claim to R2.7m and costs. The arbitrator further dismissed NHA’s claims against three of Medscheme’s former executives and also awarded Medscheme the costs of a previous postponement of the arbitration.
Thus both NHA and Medscheme were ordered to pay costs. The next part of the case relating to the extension of the licensing agreement of the NHA administration system will commence in February 2022.
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AfroCentric does not currently have aspirations to expand further into Africa, and we have exited our Zimbabwe and Eswatini operations during the year. Instead, our ambition is to focus on our South African businesses and our operations in Namibia, Botswana and Mauritius, and sustainably grow these over time.
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