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EF: Could you elaborate on Afrocentric Group’s position in SA’s healthcare map?
AB: Afrocentric Group is a listed company with about 5000 employees and we are the most diversified group in the healthcare sector on the Johannesburg Stocks Exchange, with more than 3,9 million lives under our management across two core line business:
- Private medical aid administration and chronic medical care business, for members on chronic medication.
- Investments in the pharmaceutical cluster, this part of our business have grown substantially over the last five years.
We are drug manufacturers, drug wholesalers, have the largest retail pharmacy in the country dispensing more than one million chronic prescriptions a month and we do import and wholesaling of medical and pharmaceutical consumables and prosthetics. Last year we created a corporate cluster that included everything related to employee wellbeing, occupational health services, on-site nursing services, emotional assistance program, everything that makes for a large-scale corporate organization to make life easier for employees provided in a package for the work environment. We have been quite fortunate over the last five years in that we have grown significantly across all our business lines.
EF: As a company with a very diverse footprint, what was Afrocentric´s role during the pandemic?
AB: Our priority has been looking out for our people’s lives, ensuring they have access to Covid tests as often as needed, we made huge efforts on Covid prevention education, social distancing, masks, etc. We were involved in the strategic working group with the regulator (SAHPRA) to ensure the tests are paid for by the medical aid, and not out of pocket. We have been paying special attention to all high-risk patients and those over 60 years of age to be managed more carefully, which means delivering their drugs as frequently as their diseases demand to ensure they don’t get sick and stay out of the hospital. We have made sure funds are available to pay for Covid specific infrastructure places and over the last six months, we have been thinking of how to make vaccines available to the population and how to administer them. It is important to highlight that through our network we have three thousand registered and experienced nurses ready to be mobilized around the country to administer the vaccines. We estimate we can cover between 120 and 150 thousand vaccine jabs per day so as soon as the stock is available -we are waiting for government approval- we can roll it out as fast as possible, which hopefully will be very soon.
EF: How has each business line performed this last year?
AB: The pharmaceutical business performed exceptionally well over the last year, we were concerned about the impact of Covid on our business but we were fortunate in that we manufacture a multivitamin drug whose sales skyrocketed the past year, selling almost double the volume of multivitamins compared to the year before. Secondly, we had more people sign up to our plan to receive chronic medication every month which we send by courier pharmacy which means the drugs are taken door to door, growing that part of the business as well. The private medical administration side has been a fantastic success story, our journey started just before Covid hit with our project of operational excellence and digital transformation so when Covid came we were in the middle of transforming that part of the business, which meant that in no time at all -April last year- we launched virtual consultations and it was exceptionally well received. We now have the historically best-operating margins ever. Across each component of the business, we have shown drastic improvement, which is obvious in the growth results we have recently published. The market has been quite very responsive to the performance of our operating businesses.
EF: How sustainable do you think this is?
AB: Our operation will be sustainable because we have been able to build and implement tools to manage our productivity, we can see how productive people are while they are operating from home. Secondly, with the artificial intelligence digital tools we have created, we are able to offer more services using fewer people and thirdly we have been working on a project we call “A Hospital Benefit Management” an artificial intelligence program which we worked on for two years and launched last year. It is a system that effectively and automatically authorizes hospital admissions, so there is no backlog and no waiting. We invested a significant amount of money on these initiatives for people to work from home, laptops, chairs, internet connectivity, security, etc., but if the investment was significant so were the benefits. The operational gains that we have had are completely sustainable and we consider there is still a lot we can do to further develop the operational gains we have already achieved. We will get back to the office once Covid allows, mainly because the center of customer care level is still difficult to work from home.
EF: According to your experiences managing and leading through a pandemic, what lessons would you incorporate in a Master in Pandemic Administration?
AB: I don’t think there is any business continuity plan or disaster recovery plan that could have foreseen an event of this magnitude but the pandemic has taught us the ability to be flexible in leadership. We spent six weeks as a leadership team designing how to operate remotely, and when we realized we were in for a long haul and we couldn’t spend all our time on tactic and operational issues, we re focused back on strategy and adapted it as needed. One of the biggest lessons learned was the ability to trust people in that they will still be productive even if we can’t see them, judging them by their outputs. About three years ago I was at Google and Facebook in Silicon Valley and as I was visiting, I asked them why so much time and effort was spent in bringing people to the campus. Their answer was simply “because this is where the magic happens”. Great ideas can happen at home but the magic is produced only when people are together over coffee tables, lunch sessions, etc., and I am a firm believer of that magic and even though we can do a lot virtually there is an intangible value in physically being together.
Another lesson is the need for collaboration between the private and public sectors, we believe in assisting the government with insurance issues, we already manage care services for the government employee medical scheme, we also built the service for administration of police medical services. My view is that the regulation needs to be adapted to be more relevant for the current times and if it is adapted then the ideology on national health care and the implementation would be much faster and there would be a lot more private insurance.
EF: What KPIs did you use to manage the group throughout the pandemic?
AB: Firstly, we managed the statistics of people staying at home, looking weekly at the numbers of how many people came to the office. Our aim was to keep them all safe. We also kept track of the sick. And on a weekly basis, we tracked the performance of the business lines. Fortunately we are still experiencing fast net positive growth from one week to the next and the reason appears to be our products accessible prices, my belief is that our growth and our resilience is there because the last thing people let go of is their insurance and these are probably the key indicators because we have been able to maintain the same service level with all our clients despite the conditions.
When we are looking into the group performance, for us the key factors are growth, the opportunity of innovation and disruption. Growth can be organic or structural, we find ourselves to be in the fortunate position of being able to buy companies that are in distress, or present great opportunities, another big focus of ours.
In terms of infrastructure, we have had to adapt to the extent of putting on hold some of our big plans such as building an office in Johannesburg especially because 30% of our people are working from home. We have given up office space but we are still as efficient as ever, thinking outside of the box, exploring and accelerating different business models, coping with challenges as they come and dealing with the different expectations.
EF: When searching for new opportunities to invest in, what is your strategic approach to finding deals?
AB: There are two specific areas we will continue to focus on: the health tech space and the pharmaceutical space. Health tech is important to us because of the focus on virtual and digital transformation and in the pharma space we buy and grow businesses to have a greater drug pipeline.
EF: “Before we vaccinate the body we need to vaccinate the mind and start with education” is a quote from an opinion article you recently wrote, could you elaborate on this quote of yours?
AB: My point was that education plays a key role. There are a number of people in the country and worldwide that have concerns and reservations about taking the vaccine because the clinical trials have been so short and expedited. Normal drugs go through a process of 3, 4 or 5 years before they are registered and are considered safe whereas this vaccine has been elaborated in a shorter period of time so when I refer to vaccinating the mind I mean having confidence and faith in the fact that globally every single company had the same focus in putting the best scientists on the job of developing a vaccine and if we cannot trust that process then we will never move forward as a country or in fact as humanity. Today we no longer talk about polio, about measles, which are diseases which are completely managed because there are vaccines for them and the only way out is taking the vaccine -my opinion article was directed to those with reservations about taking the vaccine.
EF: You have health tech and a new business model, so how do you attract new generations of talent to the company of the future? How do we make this sector appealing for them?
AB: We are pioneers in the creation of something new in the country, we are creating a virtual HMO model, we have resources allocated to think and change the entire service model in South Africa. The usual service model is making an appointment and going physically to see a doctor. That model is an expensive service model and unreachable to most South Africans. We are trying to change that model to achieve a first virtual consultations with a nurse, which is quick and effective and if the nurse considers the patient should see a doctor, a virtual consultation can be done with a doctor and if the doctor than feels the patients symptoms and conditions are too bad for a virtual consultation a face to face consultation with a doctor will be arranged. Our service model doesn’t stop there because the doctor prescribes drugs and through our system's automatic schedule for drugs, the prescribed medication can be delivered at the patient’s home or workplace within 24 hours. We can go even further in the case of patients that have to be hospitalized, we have created and launched a program called “Home Base Care” aimed at trying to get the patient out of hospital as soon as possible with a nurse to assist the patient to recover at home. This also avoids a second infection, which is the biggest risk in hospitals. The service is much more cost-effective and because it is more accessible we can lower the cost of private medical care so more people can be insured. South Africa has one of the highest rates of burden of disease in the world and the only way we can change that is making health more accessible and cheaper for the people. My aim is to make a significant impact on the lives of South African talent giving them the opportunity and an environment where they can flourish in their uniqueness. At Amazon or Google they would be in a sea of technology focused people and the chance of survival wouldn’t be as high as in an organization like ours. Not to mention they would have the opportunity of directly affecting millions of lives, which is about as good as it gets.
EF: A few years down the road when you look back what would you like your 2020/2021 tenure to be remembered for?
AB: I would like to be remembered for the team and collective work. The team leading the healthcare transformation in South Africa is making huge changes, health services have not evolved or changed in private medical healthcare over the last 15 or 20 years and we are significantly changing the paradigm and I would like to be remembered for that. Nine million lives can afford private medical insurance in the country, but if we can get this right -and we will- we can make healthcare more accessible and affordable and maybe take the 9 million to 12 or 15 million and if we do I will have been involved in creating positive change and it will be a very comforting thought to take with me.