MMI beefs up by buying CareCross Health Group

MMI Holdings flexed its muscle in the private healthcare industry by acquiring one of the biggest primary providers in the country, the CareCross Health Group. MMI, which was born out of a merger between Momentum and Metropolitan four years ago, is represented by the Momentum Medical Scheme and administrator, Metropolitan, in the medical scheme arena.

On 18 June the group announced that it had acquired CareCross and a majority share in Occupational Care South Africa (OCSA), subject to relevant regulatory approval. Through its subsidiary, CareCross Health, the acquired group has its own healthcare provider network, ONECARE Health, which has designated service provider contracts with a number of medical schemes.

The group also houses Akacia HealthCare, one of the leading local pharmaceutical manufacturers, providing generic and branded medicines throughout the retail pharmacy, doctor and hospital networks. CareCross Health handles the managed care and administration functions of approximately 200 000 medical scheme beneficiaries belonging to 10 schemes it has partnered with. The CareCross Health network is used by a number of other schemes, both open and restricted schemes. It is a network of about 2 000 general practitioners and 4 000 associated healthcare professionals, such as dentists and optometrists, throughout southern Africa. MMI Group chief executive, Nicolaas Kruger, said the acquisition extends the group's ability to offer holistic solutions to existing and prospective clients, adding that the transaction was also in line with MMI's strategy to grow through diversification.

MMI said the acquisition was strategically pursued to complement Metropolitan Health's current offering. Metropolitan Health administers a number of medical schemes with combined dependants equating to almost three million individuals. Its clients include the Government Employees' Medical Scheme, SAMWUMED, Momentum and employer-specific medical schemes, like Pick ‘n Pay Medical Scheme. A number of schemes under its administration have contracted CareCross Health network as their preferred provider. MMI said the acquisition was aimed at further enhancing Metropolitan Health's ability to reduce healthcare costs and improve health outcomes by coordinating services across the value chain. CareCross prides itself on being "synonymous with creating access to affordable healthcare" in South Africa through the coordination of services. Last year, Metropolitan Health acquired a majority shareholding in mobile health communication company Hello Doctor, and took over Providence Healthcare Risk Managers.

MMI said CareCross' acquisition perfectly fitted the strategy of these new entities, including its newly acquired Guard Risk insurance, in its quest to create affordable access to quality healthcare. MMI's majority shareholding in OCSA, as a result of the acquisition, will see the company diversify to workplace healthcare. OCSACare, the joint initiative between OCSA and CareCross, is providing its services to approximately 55 000 workers nationally, according to MMI. The company envisages that the acquisition will give CareCross and OCSA clients access to Metropolitan Health initiatives like its in-pharmacy clinic venture with the Alpha Pharm franchise group, Hello Doctor services and the Multiply Rewards programme. Metropolitan Health CEO, Blum Khan, said the acquisition would complement its current services.

He said it "aligns perfectly with our goals for profitable growth and pioneering the pursuit of innovative solutions that expand access to quality healthcare". CareCross Group chairman Ian Black said the transaction would be seamless for clients. In fact, ultimately they have access to new services as a result of the deal.

Business Report, 19 June 2014