The Competition Commission has given the green light for the merger of two of SA`s biggest healthcare IT companies, PQ Africa`s QEDI and Bytes Technology Group`s MediSwitch Holdings, paving the way for a significant new player in the rapidly growing healthcare IT and e-commerce market.
The new venture, Digital Healthcare Solutions (DHS), is expected to make an immediate impact in the South African healthcare industry as it pursues what PQ Africa`s CEO, Peter Watt, calls "obvious and natural synergies", particularly in the areas of speeding up remittance of claims and reducing administration costs.
"Although both companies have pioneered the introduction of electronic services to the healthcare industry, the market is still overly dependent on costly paper-based processes," said Watt. "DHS will help the healthcare industry reduce costs significantly by removing these manual processes."
Watt believes the merger will see minimal disruption to current service levels, saying the new entity has "an unqualified commitment" to the integrity of claims conveyance. "These are matters which are central to the expectations of our customers," he said.
Bytes Technology Group Executive Chairman David Redshaw said the Commission`s approval was "an exciting development for the entire IT health sector".
"One of the big winners in this deal will be the consumer, who will benefit from the reduced costs brought about by the improved efficiencies of the merged businesses," he said. DHS`s client base extends to more than 2 400 pharmacies and 6 000 medical practitioners.
"The significant growth that both MediSwitch and QEDI have experienced in the past year shows that healthcare funders and service providers alike realise that a reliable electronic switch is - and will continue to be - an integral component to keeping the costs of administrating healthcare in SA in check," said Redshaw.
Bytes Technology Group senior executive Rob Abraham, who has until now been MediSwitch Holdings` CEO and who has been largely responsible for MediSwitch`s turnaround, believes that both healthcare service providers and funders will continue to benefit from the tried and tested MediSwitch and QEDI service offerings.
"DHS must give the market freedom of choice," said Abraham. "Fact is, service providers using either MediSwitch or QEDI get their payments timeously, and healthcare funders who intelligently apply our technology enjoy substantial benefits through the reduced costs of medical aid claims administration."
PQ Africa and Bytes Technology Group each hold a 40% shareholding in DHS, with the remaining stake shared between private hospital and doctor network Netcare and healthcare funder Fedsure Health.
Hennie du Plessis, the former QEDI MD who will head up DHS, says the transaction will open up significant new e-commerce markets both within SA and the sub-continent.
"DHS will combine QEDI`s relationships with private practitioners with MediSwitch`s technology and track record in the pharmacy industry, resulting in significant economies of scale almost immediately," said Du Plessis.
Experienced healthcare IT stalwarts joining Du Plessis` existing management team are current MediSwitch MD Peter Kennedy and Gideon Brits, MD of Med-e-Mass. Med-e-Mass, a former subsidiary of MediSwitch Holdings, supplies practice management software and services to about 6 000 customers in SA.
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PQ Africa was formed as a result of the merger of Persetel Holdings Limited and Q Data. Comparex Holdings Limited has a 50% minus one share interest in PQ Africa. The black empowerment group NITAC (the National IT Acquisition Consortium), led by Real Africa Holdings Limited, holds a controlling interest of 50% plus one share in PQ Africa.
PQ Africa is the leading provider of competitive, innovative and flexible business solutions based on information and communications technology.
These comprehensive solutions include systems integration, consulting, package implementation, software development, outsourcing, hardware, software, peripherals, voice, video and data communication systems, customer relationship management solutions, and networking equipment and services. Internet solutions include the development and deployment of electronic commerce, electronic data interchange-based solutions and digital authentication.
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