Home > News

“I view the Council for Medical Schemes’ action to remove Trustees from Bestmed’s Board last week as extremely harsh and a great disappointment to say the least. The Council seems to have failed to consider the impact that these drastic measures may have on the interests of Bestmed members, which the scheme is obliged to protect, as well as the reputation of the Scheme and the Trustees concerned. They seem to ignore the fact that that, for a number of years prior to this action, Bestmed has provided its full and unconditional cooperation to the Council in order to resolve all issues and concerns related to the matter in question ”, said Dries la Grange, Bestmed CEO.

Under the circumstances the remaining members of the Board of Trustees was compelled to act swiftly. In accordance with the Scheme’s registered Rules they immediately filled the vacancies arising from the CMS’s action. A Board of Trustees has therefore been re constituted and is fully functional. It will meet during the week of the 24th of November in order to elect a Chairperson, Vice - Chairperson and statutory committee members. “From Bestmed’s point of view it is business as usual, meaning that we continue to ensure the best interests of our members and participating Employer Groups. There are however issues remaining to be dealt with as a matter of urgency”, says la Grange.

In 2011, the CMS carried out a routine inspection at Bestmed. Their final report was completed around March 2013 and was forwarded to the Scheme in or about July 2013, together with a set of directives emanating from the findings of the inspection.

The Bestmed Trustees responded immediately by lodging an appeal with the Registrar of Medical Schemes against some of the findings and directives that arose from the routine inspection with which it took issue and demanding that they be reviewed.

Since that time and despite the pending appeal, Bestmed has been constructively engaged with Council officials in an attempt to resolve differences in perspectives and realities between the parties. These interactions have been transparent but, obviously, robust on occasions.

“Bestmed has responded to every query raised in the inspection report, all the directives and subsequent enquiries as well as correspondence received from CMS and has submitted regular update reports” advises la Grange. “As far as the Board and Executive Management of Bestmed are concerned all of the directives have been thoroughly dealt with and all the Registrar’s concerns addressed to the best of our ability. We could only assume that Bestmed had complied with the directives to the Registrar’s satisfaction”, la Grange adds.

“The CMS has publically declared in recent days that its primary concerns pertain to apparent wasteful expenditure on travel, hunting, sports matches and a Neil Diamond concert. My colleagues and I acknowledge that these have been the main topics of our engagement with the CMS but are concerned that the facts presented publically are not accurate. The quoted amounts purportedly spent on these events are inaccurate.

Many participants in these events paid their own costs and, for instance, not a single cent of members’ funds were used for flights over the Vic falls and the Okavango Delta”. The Council’s omission in its press release of the fact that, as a positive response to the Council’s concerns we had initiated steps to recover expenditure related to these events (in spite of the view that the Scheme and its members had benefitted from investing in these marketing initiatives), in my mind distorts the facts and is plainly unfair”. As indicated this process between the Council and Bestmed has continued for some time up until earlier this year. “There have been no calls on us in the past months for further engagement with the CMS nor for any additional information required by them.

The former Board of Trustee members, my executive colleagues and I assumed, obviously incorrectly, that the matter had been laid to rest. This view was grounded on the fact that we had formally queried whether there were any unresolved issues from the Council’s side and indicated that, should we not hear anything to the contrary, Bestmed would accept that all matters had been resolved ” explained la Grange. “The Bestmed Board of Trustees, in the spirit of constructive engagement, indicated that the appeal against and review of the CMS’s findings would be formally withdrawn once such written confirmation had been received from the Council”. He also notes that no date has ever been set by the Council for an appeal hearing nor has Bestmed received any feedback from the Council since this last communication. “Under these circumstances it is no wonder that Bestmed’s Board of Trustees and Executive management are taken aback by the Council’s actions. This type of ruling usually only occurs when a scheme is at great risk or if there are critical governance issues. In Bestmed’s case neither pertains.

Our financial results reflect the fact that Bestmed is a healthy medical. We have complied with all the CMS directives arising from the matter at hand. In fact we have gone even further: the Board of Trustees, of its own volition, has enhanced governance of our marketing function to ensure that there is no risk involved with any expenditure in this area. A change in the Scheme’s marketing expenditure policy was tabled and accepted by members at our May 2014 AGM”. Bestmed’s current status reflects a scheme with a healthy risk profile, good corporate governance, some of the lowest administrative costs amongst its peers in the open medical scheme industry and a more than adequate level of reserves. Furthermore the annual contribution increases over the last three years have been in the lower quartile of the medical scheme industry.

Bestmed’s members have, at all times, been able to see from the results of strong management of the Scheme’s total non-healthcare costs that their funds are not wasted but used to good effect in growing the Scheme in such a manner that all members benefit. Other achievements include Bestmed’s outstanding service levels (rated exceptionally high at over 80% by its members) and the fact that its contracted broker fraternity, according to FA magazine, recently rated Bestmed as one of the three most trusted schemes to do business with. “And our service provider network considers Bestmed to be one of the fastest paying medical schemes in the industry. This is directly attributable to the leadership, fiduciary responsibility and diligence of the Board of Trustees, indicates la Grange. “All of these published achievements, and many more that are ‘unsung in public’, reflect a successful and stable scheme with good governance in place. This has been true since well before and since this long journey with the CMS started.

This is to be expected from a Board that counts amongst its members qualified advocates, charted accountants, academics and highly regarded private sector executives who have selflessly served in the interests of the members of Bestmed during their tenures that were so abruptly and abrasively terminated. It is clear that this performance by our Trustees has been ignored by the Council”, says la Grange. “Although matters between us and with the CMS are sub judice, Bestmed is committed to understanding and resolving this serious matter, hopefully in an amicable, expeditious manner that is in the interest of our members and all our stakeholders”, says la Grange . “All of the actions we take in the near future will be directed at protecting these interests. We have, under advice, already instituted legal action in relation to the CMS’s decision as a carefully considered step to do just this – act in the best interests of our members. We will keep members and other stakeholders informed of this action, any other steps considered necessary as well as any progress made”.

From the Office of Dries la Grange, CEO of Bestmed.

Click here to view the Afrikaans version