Faritec launches ASP offering for South African healthcare administration sector

Faritec today launched FariMed, an application service provider (ASP) medical scheme administration and management healthcare system offering. FariMed delivers access to systems and applications in a manner that allows medical aid administrators to eliminate the costs and time associated with installing, managing and supporting these applications and systems.

FariMed also announced its first major contract with a value projected to be in excess of R40 million over a five-year term, with Ingwe HPO, the healthcare administration and open scheme business of African Life Assurance. Ingwe HPO provides medical aid administration to over 35 000 families through the Ingwe and Commed medical schemes. This contract with Farimed will enable Ingwe to prepare for expected growth in the emerging market through the provision of capitation-based products.

"The healthcare industry is one that is continually focused on from a cost perspective. Medical scheme administration, while being a relatively small portion of the total healthcare spend, is one that can be significantly impacted on through the application of technology," said Peter Botha, Managing Director of Ingwe HPO. "Our agreement with FariMed allows us to realise savings of at least 30% in our IT costs alone, which will enable us to add value through better services to our scheme members."

The agreement allows Ingwe HPO to significantly improve the customer service of its client`s schemes by gaining access to state of the art systems without having to purchase any applications, hardware or software upfront. It also enables Ingwe HPO to reduce its IT costs significantly and achieve accreditation for the IT component of its business.

Medical aid administrators are coming under increasing pressure to reduce their expenditure. Administrators have a high IT cost in relation to other costs, with the IT function on average accounting for 30% of their overheads. Any saving than can be made in this area has a significant impact on profitability.

FariMed was formed in response to the need for a pure ASP model medical scheme administration system that had an integrated financial management system, was independent of any medical administration organisation and was able to ensure compliance with international security standards and South African medical scheme administration accreditation requirements.

FariMed is the first and only pure ASP for the South African healthcare administration sector and is aiming to capture 30% of this market within two years. Essentially, FariMed enables for any administrator to render a fully integrated medical scheme administration and risk management service on one integrated IT platform. FariMed charges for this service on a per member, per month basis.

"We identified the opportunity in a very dynamic market, to provide a fresh solution to any size administration business and to give administrators an alternative to committing significant capital and resources to depreciating IT assets," said Peter Winn of FariMed. "Our offering is robust, low cost, large scale and offers real-time processing for administrators. We think that with the changes that are happening in the medical scheme sector, it is a very attractive proposition," he concluded.