Venture to cut miners' medical costs
May 3, 2004
By Sherilee Bridge
Johannesburg - Harmony Gold Mining and Network Healthcare Holdings (Netcare), which last week revived its idea to unite healthcare services in the mining industry, hoped to provide the families of mineworkers with medical aid at half the cost of private healthcare.
It is estimated that the gold mining industry spends roughly R400 on healthcare per employee a month. That's about R1.9 billion a year, providing services to mineworkers only.
Typically, medical aids charge closer to R1 000 for a single member.
Health-Manco, the joint venture company specifically set up as a result of Harmony's decision to outsource its healthcare services, believed mineworkers' dependants could be brought into the often underused mine hospitals and clinics as medical scheme members.
Tony Decoito, a doctor and managing director of Health-Manco, said the new firm was already talking to scheme operators; one being Providence, which administers Harmony's medical scheme, and the other being the administrator of the Netcare scheme.
"What we are looking at is private healthcare at half the rate," said Decoito, adding that these kinds of rates would only be made possible by the consolidation of the mining industry's healthcare facilities.
Health-Manco had said in a statement last week that it had already had "positive initial discussions with other mining groups for the consolidation of healthcare services within the entire mining sector".
Mining firms own 59 hospitals and clinics around the country. This infrastructure was set up over decades in response to the need to provide medical services to what was often a community of migrant labourers boarding at their mines.
However, declining jobs in the mining industry and the phasing out of the hostel system have prompted a debate over the relevance of mining companies continuing the non-core function of providing their employees with healthcare directly.
"Healthcare in the mining industry is very fragmented and there is no doubt that consolidation would save mining companies money," said Decoito.
But at first the new company planned to launch products into the market and manage healthcare on behalf of clients.
This includes the management of mine hospitals.
Down the line, the initiative could be used by local industries in the area.
In the meantime, Harmony was examining expanding mineworkers' access to healthcare by adding a selected number of Netcare clinics to the three hospitals and 30 clinics it is managing on behalf of Harmony.
The country's biggest private healthcare provider, Netcare, has a network of 62 hospitals around the country.
Harmony boss Bernard Swanepoel said at the company's results presentation on Wednesday that he expected the initiative to cut healthcare costs by 10 percent to 15 percent.
Bobby Godsell, the chief executive of AngloGold, first flagged the possibility of consolidating the industry's healthcare facilities about two years ago.
Harmony's shares closed 5c firmer at R77.05 while the gold sector weakened 0.61 percent.
Shares in Netcare tracked the upward movement of the health sector, adding 9c to close at R4.95.
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