'Fewer people will afford medical aid'

By Dineo Faku Time of article published Sep 18, 2018

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JOHANNESBURG – AfroCentric Investment Corporation chief executive Antoine van Buuren yesterday said that the biggest challenge in healthcare was the affordability of medical aid.

Van Buuren said fewer people would be able to afford medical aid, as the country had slipped into recession after gross domestic product fell in the second quarter.

He said this would lead to job losses and less disposable income.

“If you walk down the street and ask anybody, can I give you a Bonitas, or a Discovery or any medical aid, they all say yes. The question is: Who can pay for it?” Van Buuren said on the sidelines of an investor roadshow held at the JSE.

Afrocentric, whose health care asset has 3.7million medical aid members mainly through Medscheme, has identified the driving of costs as paramount to its strategy.

The group has also focused on diversifying its revenue base which has been largely driven by its biggest subsidiary Medscheme.

In the year ended June, the company merged Community Medical Scheme into Bonitas.

“The mergers and contracts with new medical schemes are vital for the growth of Medscheme, which remains in a very healthy state, despite contracted growth in the medical administration sector,” he said.

Van Buuren said the National Health Insurance (NHI) scheme provided medical schemes with an opportunity to partner with the government.

“We see it (the NHI) as an opportunity for our business. When it becomes a reality we are well placed to become a provider for it (government),” said Van Buuren, adding that the company was already adding value to national health through Pharmacy Direct, its pharmacy courier division.

Pharmacy Direct processes 1.2million scripts a month and won a contract from the Department of Health to deliver medicine to patients in KwaZulu-Natal, Limpopo, Mpumalanga and the Northern Cape.

The government wants to use the NHI as a means to ensure that all South Africans receive the quality health services they need without the imposition on them of financial hardship.

In the year ended June, the company reported a 118percent growth in basic headline earnings a share. Revenue rose 11.3percent compared with last year.

The group declared a dividend of 32cents a share, up from 28c a share in 2017.

“Our performance, despite tough market conditions, confirms that we are on the right track in positioning the group in the context of an evolving health care sector,” Van Buuren said.


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