Patrice Motsepe’s African Rainbow Capital (ARC) has set up a new company, ARC Health, to invest in reforming and restructuring SA’s private healthcare industry.
It will also help to integrate the government’s healthcare expenditure on legislated compensation for costs related to compensation for injuries and other similar costs.
Motsepe said the sector’s business models and practices needed to be overhauled.
“ARC Health plans to be a serious catalyst and player in this space,” he said.
The new venture comes shortly after ARC secured a 10% stake in financial services firm Alexander Forbes’ African operations, over 18% of Afrimat, and 30% of mortgage originator ooba. At its launch in April, ARC had R10bn cashpile from parent Ubuntu-Botho Investments.
Led by former Sanlam executives Johan van der Merwe and Johan van Zyl, along with former Afrocentric Investment Corporation CEO Dewald Dempers, ARC Health will focus on businesses dedicated to the reform and restructuring of the private health industry within SA, while also working on initiatives to consolidate government healthcare spend, by focusing on the spend on legislated compensation for injury and related healthcare costs.
“The ARC Health team has a track record in constantly challenging historic and current healthcare business systems that result in inefficiencies and unjustifiable costs,” Dempers said on the announcement of the venture.
“It is concentrating its efforts in both the private and public healthcare sectors where inefficiencies result in unjustifiable costs. ARC Health will endeavour to create a platform to see opportunities and initiatives to redress healthcare spend and ultimately to reduce the cost of healthcare to ordinary citizens.”
At Afrocentric, Dempers oversaw Medscheme, one of the largest medical scheme administrators. ARC owns a 5.6% stake in Afrocentric.
The Council for Medical Schemes’ annual report, published early in October, showed medical schemes had reported a collective net operating loss of R1.2bn.
Many schemes are enforcing double-digit increases in monthly contributions next year, with Discovery Health, the largest open medical scheme, hiking premiums by nearly 11% on average.
The current economic environment was heaping pressure on individuals, companies and government to find “sustainable and affordable healthcare strategies and solutions”, Van Zyl said.