Oxygen deal ‘will not affect members’
January 17, 2009
By Neesa Moodley-isaacs
Old Mutual’s recently announced sale of its medical scheme administrator Old Mutual Healthcare to Lethimvula Investments (which also owns Medscheme) will not affect members of Oxygen Medical Scheme, the scheme’s principal officer, James van Vught, says.
Van Vught says Oxygen is an independent entity which has an administration contract with Old Mutual Healthcare. The sale will not affect the scheme’s board of trustees or any decisions the board takes regarding the scheme’s administration.
Oxygen’s trustees put the scheme’s administration contract out to tender in October last year. The tender process will be completed by the end of the month and a new administrator could take over within four or five months.
Dewald Dempers, the chief executive of Lethimvula, confirmed that Medscheme had participated in the tender and said the purchase of Old Mutual Healthcare would go ahead regardless of the tender.
“We have already consolidated our two administration companies, Medscheme and Rowan Angel. Although it makes commercial sense to amalgamate Medscheme and Old Mutual Healthcare in the medium to long term, we will consult with Old Mutual Healthcare’s clients first,” he says.
Oxygen will continue to offer its current rewards programme, so if you are an Oxygen member who has joined the programme you will continue to enjoy benefits such as gym access. Your premiums for 2009 will be unaffected by the tender process and claims should be submitted to Old Mutual Healthcare until further notice.
The trustees of Oxygen initially tried to open an administration tender at the end of 2007 but were promptly faced with legal action by Old Mutual. Van Vught says the scheme did not recommence the tender process at the time because Old Mutual Healthcare had entered into negotiations with Lethimvula Investments to combine their administration and managed care businesses.
Oxygen’s solvency ratio (its reserves as a percentage of its contribution income) at the end of 2007 was 17.6 percent (below the 25 percent required by law). Van Vught says the trustees are hoping to negotiate an administration and managed care deal that will save costs and improve the scheme’s finances.