AFROCENTRIC HEALTH SOLUTIONS
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. The business also has presence in Botswana and Kenya though partnerships with local players and is pursuing further growth and diversification opportunities in the East and West Africa regions. The business thrust is the co-ordination of 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 centers of excellence within AfroCentric.
The international market, especially in developing economies provides AHS with opportunities for vertical integration of the healthcare value chain and flexibility in funding models.
The expertise in health insurance administration that resides in AfroCentric Health Solutions and partnership with Sanlam positions the business for growth out of South Africa.
AfroCentric Health Solutions has had a strong focus on membership growth in all territories and managed to consistently exceed targets in the majority of businesses. This strategy has been successful, delivering revenue and earnings growth of nearly 60% over the last five years. Attention is now focused on improving operational efficiency, while still pursuing opportunities for organic growth and geographical expansion.
Specific strategic objectives include:
|Strategic focus areas||Why this is important||Link to Group
|Diversify revenue through AfroCentric associates, subsidiaries and ancillary services||Diversification of revenue streams contributes to overall growth and provides protection from downturns in discrete sectors or regions. A strong core business platform allows value-added solutions to be bolted on, such as wellness programmes, IT solutions or subsidiary company services to new and existing clients.|
|Drive operational efficiencies||AHS is actively engaged with key providers in streamlining the delivery of healthcare to reduce costs and improve quality of care. Automation of processes is high on the efficiency agenda, driving down costs and allowing human capital to be re-deployed to new areas where they can add more value.||
|Sustain and grow current revenues||Innovation, particularly in terms of processes and technologies, allows AHS to do more for less. The Company seeks to secure opportunities within its area of expertise in administration, health risk management and IT, leveraging Group resources to offer a full package of products and services to the pan-African market and contributing to the growth targets of AfroCentric.|
|Improve employee practices||AHS believes in investing in the development and empowerment of its most valuable resource, employees. The Group’s online learning tools are available to employees and proved popular and effective for developing key skills. Management teams were integrated into operational group forums, expanding horizons and spreading the expertise that exists in AfroCentric.|
OPPORTUNITIES AND CHALLENGES
The International market, especially developing economies offer attractive prospects for growth and expansion.
East and West Africa are good candidates due to their large, predominantly English-speaking populations, robust banking systems and infrastructures.
AfroCentric Health Solutions is constantly seeking prospects for fund merger opportunities, particularly with smaller schemes in markets where it is established, namely Namibia, Zimbabwe, Swaziland and Botswana. We are also pursuing opportunities for third-party IT solutions contracts such as the licensing of our administration system, and for the export of subsidiary company services such as Klinikka, Allegra and AfA.
To realise identified opportunities across the continent, it is critical that AHS maintain a high level of cultural awareness. South African healthcare funding and practice is not replicated elsewhere on the continent. The business model used within the South African market must be adapted to local regulatory, industrial and social customs. The business is sensitive to the sociocultural barriers that must be overcome when trading in a multi-national context to ensure as smooth an integration as possible of new acquisitions and partnerships into the core business.
PERFORMANCE OVERVIEW AND OUTLOOK
AfroCentric Health Solutions has enjoyed sound performance over the past year, with revenue increasing by 12.5%.
The business has been successful in building brand reputation, with Medscheme Namibia and Medscheme Swaziland winning prestigious service awards.
|•||Medscheme Namibia won the PMR award for best administrator for the fifth consecutive year.|
|•||Medscheme Swaziland won the PMR award for best medical fund for the second consecutive year.|
The focus for the year ahead is the consolidation of growth efforts, seeking to collaborate with existing and potential partners to develop appropriate healthcare solutions for the continent, and packaging of existing products for export markets.