Discovery has resigned from the Board of Healthcare Funders (BHF), accusing it of poor governance and failure to provide effective representation of the industry in policy debates. However, some industry players dispute Discovery's version. They say its departure was triggered by its opposition to the looming national health insurance (NHI) scheme - something that has the potential to change the way traditional medical funds do business. But Discovery outgoing principal
officer Jacky Mathekga retorts: "There has not yet been substantive debate within the BHF or elsewhere in the industry. Thus there Was no disagreement between Discovery Health Medical Scheme and the BHF on the issues relating to the HI."
Mathekga says: "The nature of the participation of the BHF MD [Humphrey Zokufa] in the ANC committee on the NHI was a clear example of governance failures,"
Zokufa refused to comment last week on this and other issues.
The BHF, which now refuses to comment, previously said in a terse statement
that "the timing of the resignation is unfortunate at this critical time in the SA
health-care debate". It said the split was "based primarily on a divergence of views between [ Discovery] and other BHF member schemes on certain regulatory and policy issues". According to Mathekga, Discovery's nominated directors to the BHF board "tried in good faith over an extended period to address the scheme's concerns with the BHF executive and the board.
Having failed to effect any meaningful changes, the directors had no option but
to resign." These directors include Discovery Health's Jonathan Broomberg, who co-wrote the NHI proposals with the then health director-general Olive Shisana in the 1990s, Broom berg is today one of the key figures in the Private Funders Forum (PFF), an initiative aimed at forming a new industry body.
Discovery's withdrawal will certainly have dire consequences for the BHF's
financial position, In 2006, Discovery paid it a total of R4,7m in fees - nearly a quarter of its R17,1m turnover.
With one in four insured people belonging to Discovery (or a total of 2m
beneficiaries who pay R20bn in annual premiums), the scheme is by far the
country's largest. It's doubtful that the BHF will be able to retain its employees and manage without Discovery's contribution. Or should its remaining 90-plus members brace themselves for higher subscriptions? Matters like these must be dominating the BHF's marathon meetings of late. The BHF refuses to say whether any of its members has since resigned along with Discovery. Remaining members include Bankmed, whose CEO, Milton Streak, will succeed Mathekga at Discovery next month, Bonitas, Polmed and Medihelp (which is headed by Anton Rijnen, a member of the BHF's newly formed constitutional review committee), Some insiders claim that no less than
3O disgruntled members will defect to the breakaway group between now and June. Resolution medical aid has also left the BHF and thrown its weight behind the rebels. If all goes according to plan, the splinter group will launch in June.
But Zokufa has been sounding conciliatory, so the two bodies could still
make up. The BHF itself was formed a decade ago from a merger between a
conservative industry body and a splinter group. In a letter to BHF members, head of legal affairs Debbie Pearmain and Zokufa say that having two industry bodies would be counterproductive. That's one of the reasons why the board has taken a "crucial" step to transform the organisation into "something that can meet the needs of the industry" -without specifying what it is that it hasn't been doing. Pearmain has been named convenor of a review committee. Maybe it's a question of too little, too late. Mathekga says the BHF has "ongoing governance problems", without giving specific examples. Despite this, he says those in the PFF are open to discussions "that could address these concerns, and avoid the creation of a second industry body". But for now, Mathekga castigates the
BHF for high running costs. The organisation's operating expenses came in
at R19,6m in 2006 (versus a turnover of R17,lm) Despite Mathekga's denials, the industry is convinced Discovery left the BHF because of its stance on the NHI.
The proof will be in how the rebels tackle this politically charged topic.
Shoks Mzolo
Financial Mail
24 Apr 2009
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