I used to work in the healthcare industry. I used to get home just in time for the early evening business news. One day the wife says to me “hurry up! you have to hear this!”
Now what had happened is that a few months previously a badly administered medical aid had gone belly up and left it’s members, who diligently paid in for years, liable for big hospital bills. Government was concerned and so enacted legislation compelling these funds to have certain reserves in cash so that the members would have some cover if the fund collapsed.
So, on this evening I had to chuckle when I heard the CEO of a big medical aid getting a grilling from the then Minister of Health.
Minister: The act lays down a formula for calculating the cash reserve. You don’t have that amount in cash. You must have it so that your members are confident about being covered.
CEO: But we DO have that. I’ve shown that to you.
Minister: You might call that “cash”, but I don’t. I call that a promisary note from an insurance company that you own 100% of.
So people play games with words (and so we have to put strict legal definitions around words that should be self-explanatory and easily understood).
About two weeks later the wife says again “hurry up! You want to hear this!”
This time it is my then CEO getting it from the CEO of a medical aid.
Provider CEO: We all agreed that we providers would share our financials with the funders, including discounts whether on or off the invoice. We have stood by that.
Funder CEO: But we have established, because we suspected it from your year end figures, that you must be getting some further discounts that you are not telling us about. Otherwise your year end statements are not true and the JSE will not be happy about that. Oh… and by the way we have in our possession this document - I’ve sent you a copy - which backs up our assertions.
Provider CEO: Oh THAT. Yes, that document is real, we don’t contest that, and it’s 100% accurate as far as the numbers go. But you see, we don’t call that a DISCOUNT. If it were a discount we’d have had to include it in the figures we gave you. But no, we say that’s a REBATE, and our agreement says nothing about having to declare rebates.
More playing around with words.
So when this company says “no penalties” I would be that they mean “oh yes. It will cost you about R30K to have the system removed. But that’s not a PENALTY, that’s a DECOMMISSIONING FEE.”