Tradebridge – cutting costs and improving service through accelerated information flows

In the late 1990’s, Dave Frankel of Internet Solutions and Gerrit van Zyl, a management consultant began looking for business opportunities and so Tradebridge was born in 1999.

“We had the vision of starting ecommerce transaction businesses in a few vertical markets. By 2000 we realised that every industry had complexity and trying to do too much would result in failure. I suggested we focus on healthbridge, because health care is one of the most information intensive sectors in any economy, but at the time it was poorly served which created big opportunities.

“I also wanted to work in an industry with meaning.” Van Zyl was profoundly influenced by a speech made by Professor Jeffrey Sachs, director of the Earth Institute at Columbia University in the USA and a prominent economist who was a keynote speaker to the Board of Healthcare Funders in June, 1999. Sachs asked: ‘if you were the leader of a developing country – what would you need to focus on to move from developing to developed?’

Sachs insight would become a powerful motivator for Van Zyl who recalls: “He said it was healthcare. Research showed that healthcare had the strongest correlation to the speed at which a nation developed.

“Highly skilled Africans, as an example, were leaving the continent because of crime, failures in the private property protection regime and poor health care. Sachs said that to keep white collar workers a nation needs a world class private health care system.”

Long lives = healthy economies

Sachs showed graphs that had a further impact on the founding of healthbridge: “He showed that in the developing world life expectancy is 52, which means that if a person became economically productive at age 20, a nation can expect say a 30 year economically active period from that person. However, in the developed world, citizens tend to become economically active between ages 20 and 24 – after graduation, they will work until age 68 and have a life expectancy of 72 – which means a country will get at least 46 productive years from that individual.

“The role of public health systems is to keep skills living longer so the economy can get a return. I realised this was a way I could make a major contribution to the retention of skills and growth in South Africa.

“Public health care needs to look at what are they trying to achieve – what is wrong, what can be fixed, what technology needs to be used, and ways to have greater private patient collaboration.

“The public health care system is not as bad as it is made out to be.” Van Zyl suggests that blame rests with patients too: “Many people do not take the treatment given to them and that is a big driver of cost. People don’t finish prescribed medications and that is why we have such high ratios of multi-drug resistant and extreme drug resistant tuberculosis, as an example. We see patients failing to stick to medicine regimes with lots of chronic illnesses from diabetes to HIV; as a result, people become very ill and need hospitalisation because they did not take their medicine as prescribed.”

An important offering from healthbridge is Hospital Suite which speeds up patient processing times in hospitals – from 25 minutes to five when a patient is admitted. It also contracts, using pre-authorisations, with the medical aid before the hospital stay takes place, so that payment is assured. Hospital Suite endeavours to ensure that hospital bills are immediately processed by the medical aid and paid by the end of the week. This creates the sort of cash flow and savings for hospitals that allows them to improve service in terms of equipment used and employing the best staff.

“We believe that Johannesburg hospital could earn R180m a year from treating insured patients in hospitals, as an example,” van Zyl says.

Democratising information

He focussed seven years on honing healthbridge’s products and services before moving Tradebridge into new ventures with the goal of “transforming industries and transforming people’s lives by democratising information.”

What does that mean?

It means that Tradebridge has a profoundly values driven, ethical culture; each of it’s subsidiaries has as a goal the improvement of people’s lives by harnessing information technology.

“Before we bought Debt Control Management early in 2008 (a company that assists other organisations manage debt more effectively), as an example, we knew it fitted with our vision of transforming industries. Before DCM the dark side of credit was the whole process of debt collectors and administrators, it was a highly unregulated industry. It was people making a lot of money out of folks who were overextended. Abuse was rampant – but when the National Credit Act came into effect in mid-2007 it put the onus on creditors to help people get out of debt without destroying their lives.”

A fast growing company that was opened in mid-2008 under the DCM umbrella is Consumer Assist which is the largest umbrella organisation of debt counsellors in South Africa. It is driving efforts to help over-indebted consumers and to introduce financial wellness programmes in companies to assist staff.

“In late 2007 we began developing mobile payment solution POCit and SureSwipe, a credit card swipe system that is considerably cheaper than other systems and incentives retailers by giving them back more if their turnover increases.

“healthbridge has seen revenue grow at more than 35% a year compounded and with SureSwipe and DCM we are looking at growth in excess of 40% – all these businesses are counter cyclical.

“Tradebridge has no plans to list, we believe we can raise the capital that we require for our growth without listing.”

Looking ahead

Van Zyl says the South African market is great for innovation but it is small, “we are looking at opportunities to leverage investments and find opportunities in other markets. Despite challenging economic times for most, we foresee very favourable continued growth.”