Busa lobbies for medical schemes to stay under NHI
Business Unity SA (Busa) is lobbying the government to allow medical schemes to continue operating under National Health Insurance (NHI), arguing this will ensure the private healthcare sector remains viable and reduce the load on public health facilities, Business Day reports.
It made its case at South Africa’s second presidential health summit, a high-level meeting aimed at improving care provided to patients across the spectrum. The two-day closed meeting focused on NHI.
“What we are proposing is some flexibility to section 33 of the NHI bill, to enable a multi-payer, multi-provider system,” Busa executive Stavros Nicolaou told Business Day after presenting the organisation’s position to the summit. “This is not a selfish request to maintain the status quo – we would not want anything in the bill that weakens either the public or private sector,” he said.
Busa acknowledged there were problems with the private healthcare sector, and suggested the government implement the recommendations of the Competition Commission’s health market inquiry, he said.
Section 33 of the bill says that once NHI is fully implemented medical schemes may provide only complementary cover for services not covered by the fund.
Busa supported reforms to widen medical scheme membership to employed people who could not afford cover, which could be achieved with the low-cost benefit option framework being developed by the Council for Medical Schemes, he said.
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Few equity funds outperform Alsi so far this year
The FTSE/JSE All Share Index (Alsi) is up 8.7% over the first four months of the year, but the average return from funds in the South African equity general category for the year to the end of April is 5%, according to Morningstar. Only 12 funds in the category have outperformed the Alsi over this period, City Wire reports.
Without exception, the biggest gains were generated in January and April. In the first month of the year, local equity funds were up 6.8% on average. In April, they gained 2.6%. In February and March, however, the category produced negative returns on average. Very few managers were in the black in either month. For February, only 18 funds registered gains. In March, only 12 were positive. By contrast, every fund in the category delivered a positive return in both January and April.
Only one fund has managed to produce positive returns in all four months of this year so far. The Rezco Equity Fund registered a 5.2% gain in January, 0.4% in February, 1.2% in March, and 2.7% in April. For the year-to-date it is up 9.7%, ranking it ninth out of 178 funds in the category.
Absolute return funds with high targets underperform
An analysis of the Alexforbes Absolute Return Manager Watch Survey for March shows that the higher the targeted inflation-beating return, the less likely managers will achieve it, City Wire reports.
None of the six portfolios that aimed to provide an annualised return of CPI plus 6% achieved this over the past five years, nor did any of the four CPI-plus-6% portfolios, which have all existed for 10 years. The top performer in this category over five years was the Ninety One Opportunity Composite Fund, with a 10.5% annualised return, which was still behind the 10.8% annualised target. It was also top over 10 years with a 10% annualised return, still more than a percentage point behind the 11.1% benchmark.
In the larger CPI-plus-5% category, which had 14 portfolios, two funds outperformed their benchmark over 10 years. Over five years, the hit rate in the category was better, with four funds beating the benchmark.
Some portfolios could not beat even the relatively unambitious target of CPI plus 3%. Old Mutual was the poorest performer as the Omig Capital Builder gave an annualised 6.3% return over 10 years compared with a benchmark annualised return of 8.1%.
In the largest category, CPI plus 4%, with 17 entries, none of the portfolios outperformed the 9.1% annualised return benchmark over 10 years. Over five years, three funds in the category exceeded the target of an annualised return of 8.8%.
RAF to approach Constitutional Court over Discovery ruling
The Road Accident Fund (RAF) has said it will approach the Constitutional Court after the Supreme Court of Appeal (SCA) dismissed its application to appeal against a judgment that prevents it from rejecting claims for medical expenses where these expenses have been paid by medical schemes, not claimants.
Discovery Health, the largest administrator of medical schemes in South Africa, took the RAF to the High Court after the fund issued an internal directive in August 2022 instructing regional managers to reject claims if a medical scheme has already paid them.
Discovery was successful in obtaining an interdict preventing the RAF from implementing the directive. In January 2023, the High Court denied the RAF leave to appeal the judgment.
Read: Ruling in dispute between Road Accident Fund and Discovery Health over claims
The following month, the fund applied to the SCA for leave to appeal.
In a brief judgment handed down on 11 April, the SCA said: “The application for leave to appeal is dismissed with costs on the ground that there are no reasonable prospects of success in an appeal, and there is no other compelling reason why an appeal should be heard.”
RAF spokesperson Linda Rulashe said the fund would petition the Constitutional Court for leave to appeal and “will not comment further”.
In March, Discovery Health applied to the High Court in terms of section 18(3) of the Superior Courts Act, to compel the enforcement of the unlawfulness of the RAF’s directive.
‘Windfall tax’ from loadshedding
The government is raking in millions of rands as a “windfall tax” because of loadshedding, says Pick n Pay chairperson Gareth Ackerman, BusinessTech reports.
At the release of the retailer’s annual results, Ackerman said 37% of the group’s diesel costs go straight into the government’s coffers through the Road Accident Fund (RAF) levy.
“In recent months, we have spent around R60 million per month on diesel,” he said.
For the year to the end of February 2023, Pick n Pay reported that it spent R522m on diesel to keep operating amid record levels of loadshedding. On this basis, more than R193m (37%) would have been paid to the government in tax.
Alexforbes buys 60% stake in TSA Administration
Alexforbes announced on Friday that it has concluded an agreement to acquire a 60% stake in one of South Africa’s leading group risk insurance administration businesses, TSA Administration (Pty) Ltd.
In terms of the acquisition, Alexforbes, through subsidiary Alexander Forbes Financial Services (Pty) Ltd, will initially acquire 60% of TSA, with the option to acquire the remaining 40% over five years from the effective date.
The purchase will be settled in cash, and Alexforbes intends to fund the acquisition by drawing down on its term loan facility. The value of the purchase was not disclosed.
TSA, which has a 25-year track record, serves more than 120 000 insured members across more than 2 000 institutional clients.
Alexforbes expects the deal to be concluded by the end of June, although it remains subject to commercial conditions.
TSA will operate as an independently managed unit within the Alexforbes group. AF Insured Solutions will be integrated within TSA.
“The transaction represents a natural alignment between the two companies, as we share an independence from product providers, a dedication to enhancing customer experience, and the appetite to partner with intermediaries. Both the TSA business and the Alexforbes binder business (AF Insured Solutions) will be enhanced due to our combined scale in the administration operations, as well as expanded market reach,” Alexforbes said.
