Our stakeholders
We exist to enhance the quality of our stakeholders' lives. Engaging meaningfully with various stakeholders is therefore critical to ensure we meet this goal.
AfroCentric considers its stakeholders as individuals and groups interested in or affected by our activities. They range from employees to the external bodies who influence us. We understand the levels of engagement will vary between stakeholder groups based on their levels of influence or interest. We 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)
- South African Health Products Regulatory Authority (SAHPRA)
- South African Pharmacy Council
- The JSE
- Competition Commission
- Financial Sector Conduct Authority
- South African Revenue Services
- Companies and Intellectual Property Commission (CIPC)
- Integrated Report and AFS
- Interactive Group website
- Participation in public and industry forums
- Publications
- Shareholder and market information update
- Organisational compliance monitoring
- A critical recurring concern from government (NDoH) and regulators (CMS) across the sector is the lack of material growth in the number of medical scheme members over the years
- A vital contribution that AfroCentric has made to the 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
- No political donations or contributions were made during 2022
INDUSTRY
BODIES
Bodies that oversee healthcare-related matters:
- Board of Healthcare Funders of Southern Africa
- Health Professions Council of South Africa
- Hospital Association of South Africa
- Doctors’ Health Council
- Public Health Enhancement Forum
- Integrated report and AFS
- Interactive Group website
- Participation in 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. AfroCentric leadership was invited to the Health Portfolio Committee meeting to discuss potential synergies between the private sector and government
EMPLOYEES
AND TRADE
UNIONS
- National Education, Health and Allied Workers’ Union (NEHAWU)
- South African Legal Union (SALU)
- Ongoing dialogue through established channels
- Forums
- Integrated report and AFS
- 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
- Staff retention/attrition
We have established the following forums as part of our stakeholder engagements to deepen dialogue; namely:
- National Bargaining Forum: This will help streamline our annual wage negotiations
- Quarterly Union Meetings: These meetings inform the union about our current and future strategic projects. This forum was also used to provide updates on topical issues like COVID-19, the return-to-work project, the 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
- Human capital formed the People Enablement Forum to provide updates on work-from-home policies, return-to-work considerations, and vaccination-related issues
OUR CLIENTS
– MEDICAL
SCHEMES
Our clients are our direct link to the end-users of our services, which are the medical scheme members.
Our schemes include:
- Open schemes: Bonitas, Fedhealth, Medshield
- Closed schemes: AECI, Barloworld, GEMS, Horizon, MBMed, ParMed, POLMED, SABC, SAMWUMED, and MEDipos
- Outside SA schemes: NAMMED, Namibia Health Plan
- Presentations
- Meetings
- Email communication
- Symposiums
- Voice of the customer survey
- Integrated report and AFS
- Member retention in the current context
- Maintaining service levels during the pandemic
- Addressing co-payments to address member concerns
- Fraud, waste and abuse
- 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
- Introduction of AMP, which is a health and wellness platform and self-help tool for medical scheme members to monitor physical health and nutrition, and disease management
OUR
SHAREHOLDERS
AND INVESTORS
- Institutional and individual investors
- Corporate website
- SENS announcements
- Investor days and roadshows
- One-on-one meetings with executive management
- Interim and annual results presentations
- Integrated reports and AFS
- Sustainable value creation
- Consistency in the delivery of strategy
- Consistent financial performance
- Sound investment returns
- Working capital and capital allocation
- Interest in expanding business to rest of Africa
- Relationship with Sanlam
- ESG issues
- With effective delivery against our growth
strategy, we achieved:
- Net asset value (NAV) per share of R5.98 (2021: R5.67)
- We remain committed to engaging with investors in an open and transparent manner
- We communicate our value creation story and strategy through our Integrated Report
- Enhanced focus on ESG issues and reporting
Stakeholder matters in focus
We seek to maintain high levels of corporate transparency. This builds and maintains trust with our stakeholders, growing social capital that enables value creation and protects against value erosion. Below is a summary of matters that arose as areas of heightened stakeholder interest during the year.
The Group has been on the frontline of the COVID-19 pandemic – utilising our resources and 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.
“Vaccinations will not prevent infections, but we do know they will provide substantial protection against severe disease, hospitalisation and death due to COVID-19.”
– Ahmed Banderker, CEO
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
External context – Access and affordability
For more information on our role in the national vaccination roll out, please see:
Living our purpose through the pandemic
Chairman’s review
CEO’s review
- Government and regulators
- Clients
- Shareholders and investors
- Access to healthcare 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 regarding its regulatory mandate.
Our fiduciary duty is to safeguard members’ funds and 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 to the Commission of Enquiry on the findings.
- Industry bodies
- Clients
- Shareholders and investors
- Access to healthcare and medicine
- Legal, regulatory and compliance management
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 in October 2020. The arbitrator ruled that NHA was entitled to only R2.7 million, with interest only from October 2020 to the payment date and costs. The arbitrator found that Medscheme’s contribution fell short of the contribution required for joint authorship and ownership of the software. The arbitrator further dismissed NHA’s claims against three of Medscheme’s former executives and awarded Medscheme the costs of a previous postponement of the arbitration. Thus, both NHA and Medscheme were ordered to pay costs.
In October 2021, the Plaintiffs submitted a proposed amended claim of R500 million based on an additional amount claimed for the loss of revenue on royalties, which they argued is due to them based on the utilisation of the software by Medscheme. This claim will be subject to argument at the next hearing.
The next part of the case relating to the claim for loss of earnings and emulation of the software commenced on 1 August 2022, and is set down for hearing until March 2023. We will endeavour to keep our stakeholders updated on progress.
- Shareholders and investors
- Legal, regulatory and compliance management
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
- Shareholders and investors
- Access to healthcare and medicine
- Business continuity and business model adaptation
AfroCentric does not currently have aspirations to expand further into Africa. Our ambition is to focus on our South African businesses and operations in Namibia, Botswana and Mauritius and sustainably grow these over time.
- Shareholders and investors
- Access to healthcare and medicine
- Business continuity and business model adaptation
Significant opportunity exists to further access to healthcare by addressing pending regulatory reform timeously. This matter has increasingly been in the media following discussions held at the Board of Health Funders conference this year.
- Government and regulators
- Clients
- Shareholders and investors
- Access to healthcare and medicine