FEDHEALTH MEDICAL SCHEME

NOTICE IS HEREBY GIVEN THAT THE SEVENTY THIRD ANNUAL GENERAL MEETING OF MEMBERS WILL BE HELD ON WEDNESDAY 24 JUNE 2009 AT 10:00 IN THE TERRACE ROOM, COUNTRY CLUB JOHANNESBURG, 1 NAPIER ROAD, AUCKLAND PARK, JHB

For many, 2009 actually began last year as we looked ahead with trepidation and anxiety to the coming of the New Year. But as this year dawned and as we travelled further into it, we realise that things are not as dire as forecasted and what's more, people are learning new ways of adapting and coping and so, the world is still turning on its axis.

Looking at our performance for the financial year 2008, I am pleased to report that Fedhealth once again successfully navigated another challenging year, increasing its membership by nearly 9% with no adverse effects on our stability or reserves. In terms of our membership growth and solvency, I can say with pleasure that it remains most satisfactory. Our solvency ratio remained constant and is still well above the statutory requirement of 25%. The scheme has maintained a strong financial position with a net surplus of R76.5 million and investment returns reaching 10.83%. Our solid credit rating was re-affirmed at AA- by Global Credit Rating which demonstrates a healthy claims paying ability. We have lost some members to GEMS, however the good news is that we have been working hard at increasing our private membership and on this front we have proven successful. By year end we had grown to nearly 85 000 members, with over two thirds of this figure coming from the private sector.

Our member elected trustees continue to run the scheme to the highest ethical, moral and fiduciary standards, always keeping in mind the vision of "for the member, by the member". The board has enhanced their interaction with members by introducing a direct contact channel for members to the board through our monthly newsletter, "HouseCall!" encouraging members to provide us with their views and experiences of the scheme.

There are many challenges ahead for us, like the Risk Equalisation Fund, standardisation of benefits, and National Health Insurance. The scheme is actively involved in forums adding our voice to these issues; always acting in the best interest of our members.

The above is a short summary and commentary on our financial year-end review. As always, all the information is available for your perusal and can be obtained on request from the scheme; from any of the Medscheme branches around the country or accessed on the scheme's website, www.fedhealth.co.za

Finally, on behalf of the Board, I would like to thank you, our members, for your continued support; our administrator, Medscheme for their efforts in meeting our requirements; our managed care organisation, Medscheme Health Risk Solutions for managing the quality of healthcare our members receive and our loyal brokers who have ensured that the scheme has grown so well. We would also like to thank the Registrar of Medical Schemes and his staff for their interaction, support and advice. I must also express my thanks and appreciation to members of the board and to our CEO who, with their insight, skill and commitment have ensured that the scheme is successful.

Malcolm Kahn
Chairman: Fedhealth Board of Trustees

Despite the economic difficulties experienced during 2008, which continue to have an impact on the country, the scheme managed to grow its membership base and ensure a sound financial result. It is not the objective of the scheme to make unnecessarily large surpluses, which many members see as profiteering at their expense, but rather to ensure a sustainable medical scheme and to comply with requirements of the medical schemes act.

Financial Results
The scheme made a net surplus of R76,5 million, which compares favourably with our surplus of R28,4 million in 2007. Notwithstanding a growth of more than 6 900 members, the reserve ratio stood at 28.15% and the members' reserves as at 31 December 2008 amounted to R544 million. Although claims increased by more than 22%, from R1,24 billion in 2007 to R1,52 billion in 2008 judicious investments and careful monitoring of expenditure saw the net position improve significantly. This is reflected in non-healthcare expenditure declining from 11% of gross contributions in 2007 to 9% of gross contributions in 2008.

In terms of auditing rules governing medical schemes the scheme is not allowed to provide an abbreviated version of the AFS, unless that version has also been fully audited. As the cost of fully audited abbreviated accounts does not seem justified we advise members that full copies of the AFS are available on the scheme website, at all Medscheme offices around the country, and on request (but please, we can't fax the full 70 pages!)

Parents who impose strict rules on their teenagers have a better chance of raising drug-free children, according to a study by the National Centre on Addiction and Substance Abuse.

The study found that teenagers living in "hands-off" households are twice as likely to abuse drugs as the average teenager, while teenagers with absentee parents are four times as likely to abuse substances.

Surprisingly, despite conventional wisdom that many teens don't want their parents to establish rules and expectations, the teens with the best relationships with their parents, were the ones whose parents closely monitor and restrict their activities, according to a story about the study on CNN.

While 47 percent of teens living in "hands-on" households reported having an excellent relationship with their fathers and 57 percent an excellent relationship with their mothers, only 13 percent of teens with "hands-off" parents have this relationship with their fathers and 24 percent with their mothers.

EPILEPSY AND DIET
Controversial though it may be, new vaccine springs hope for brighter future

Safe blood saves lives. Every day thousands of people would die if others did not donate their blood. By donating blood, you are giving a patient something money cannot buy and science cannot create. A single blood donation can equal three gifts of life, as nearly every blood donation is separated into red blood cells, plasma and platelets.

The majority of transfusions are given to:

By donating blood you make a difference.
(Information from the South African National Blood Service)