2019 Integrated Report

PERFORMANCE PPSHA is the fourth-largest medical schemes administrator in South Africa with fees that track within the industry average range. The company has consistently paid dividends and is a contributor to the PPS Group’s Profit-Share allocations. PPS Profmed members also earn additional Profit-Share, which can be viewed in their PPS Profit-Share Account statements. PPSHA has grown considerably since 2005 when it took on its first client, Profmed. In August 2019, the company acquired three additional schemes for managed healthcare services, bringing the total membership under management to 96 000 families. The new schemes came on board within the space of two months. Through careful planning and efficient systems and procedures, PPSHA ensured that their inclusion in the fold did not cause administrative issues. Feedback from the three schemes reported that PPSHA’s transition management was exceptional. During this period, PPSHA also extended managed healthcare services for Profmed to include Disease Risk Management. This offering provides co-ordinated healthcare interventions for members with chronic conditions. Knowledge sharing and patient self-care are integral to the concept of disease management. Costs were managed prudently during this period with non-healthcare expenses kept below 10% on average. RISK, CHALLENGES AND OPPORTUNITIES The constantly changing regulatory environment is possibly the greatest risk for PPSHA. To mitigate this the business engages actively with stakeholders and provide input on proposed regulatory changes. In 2019, it compiled a comprehensive submission on the proposed National Health Insurance (NHI) Bill for South Africa. A difficult economic environment saw many administrators absorbed by their competitors and medical schemes merging. Despite the challenges posed by the environment, PPSHA continues to focus on providing added value to schemes and their members while keeping a tight control on expenses. At present 11 administrators are competing for 80 remaining schemes in South Africa. INNOVATION The business introduced a “private client” model for its schemes in 2018. Profmed and its professional base were the first to benefit from this new service model. Implementation across the business happened in 2019. The model is a customised “private client” experience for the medical scheme environment that aims to provide first-time resolution of queries. The objective is to provide a “high-touch” environment with exceptional levels of service to professionals. PPSHA provides an omnichannel for all its clients that ensures an excellent user experience. Information and Communication Technologies (ICT) innovations designed to support the above include an enhanced online application. It increases efficiencies and reduces the turnaround time for new member on- boarding to less than 24 hours. Further enhancement to the mobile app for Profmed members saw the app voted as the best medical scheme app in the Android store. PROSPECTS The affordability of medical aids is expected to remain a major issue for members during the current period. This naturally increases the risk of attrition. The introduction of an NHI scheme poses a further immediate risk; medical professionals in private practice may choose to emigrate should they be adversely affected by it. Against this backdrop, the fact that PPSHA retained existing clients in 2019 and welcomed three new schemes indicates that it is holding steady despite an uncertain environment. Increases in revenue were due to organic growth and the addition of the new clients, and this supports a positive outlook for 2020. GROUP PERFORMANCE AT A GLANCE | 47