Government acts on PSMAS at last


The government has appointed a five-member interim management team to run the Premier Services Medical Aid Society and sort out the mess within the organisation and prepare for the holding of an annual general meeting at which a new board can be elected.

Health Minister David Parirenyatwa said in a ministerial statement in the Senate yesterday that the team consisted of five senior officials from the Ministries of Health and Child Care, Finance and Economic Development, Public Service Labour and Social Welfare, the Civil Service Commission and the Office of the President and Cabinet.

He did not name them.

The interim management team members will be on normal duty operations and will not be remunerated from the society allaying fears that it would be more expensive to rectify the problems at PSMAS.

PSMAS came under the spotlight following revelations of what Parirenyatwa described yesterday as “insanely exorbitant” salaries and allowances, forcing the board of directors to dissolve itself and the suspension of the chief executive Cuthbert Dube.

Parirenyatwa agreed with Senator Thokozile Mathuthu that Dube had not shown any remorse but added that any disciplinary action against Dube would only be decided after a forensic audit.

“I think that is the way we should go, that is, to really see it systematically and do it thoroughly and make sure that it is transparent to everybody and that we are not rushed by emotions. Clearly, it is an angering situation but we need, as a government to be able to do it systematically and according to the legal statutes,” he said.





THE MINISTER OF HEALTH AND CHILD CARE (DR. PARIRENYATWA): Thank you Mr. President. Hon. senators, I am going to be making a statement on the issues from the Ministry on the issue of the Premier Service Medical Aid Society. This statement seeks to update members of the public and the hon. senators on the progress made so far in resolving the Premier Service Medical Aid Society issue.

We have all been following this matter, both along official lines as well as the many media articles that have come out of it. To contextualise my message, let me recall the pertinent matters. Medical aid societies are regulated through Statutory Instrument 330 of 2000, which Instrument is administered by the Ministry of Health and Child Care.

The aim is to ensure that medical aid societies operate within agreed parameters and serve their membership and service providers in a fair and transparent manner. It should be noted from the outset that none of these medical aid societies are parastatals.

It is within this framework that it was observed that the Premier Service Medical Aid Society was not operating in the expected manner. Specifically, its financial accounts reflected a position that was not consistent with a viable entity as a going concern. The financials revealed a huge debt to providers and an unusually large salary and allowances bill compared to similar organisations.

Further analysis of the salaries and allowances revealed insanely exorbitant rewards for the senior executives of the society and its investment arm, Premier Service Medical Investment. This prompted us as the regulating Ministry to withhold the renewal of the Premier Service Medical Aid Society’s annual operating licence for 2014 until we had satisfied ourselves that all was within order.

Resultantly, several consultations, verbal and written were made between ourselves, the Premier Service Medical Aid Board, the management and other relevant Government Departments. We did conclude that Premier Service Medical Aid Society was a defaulting society in terms of Statutory Instrument 330 of 2000 and that the prescribed solution as per this statement is, to call an extra-ordinary meeting for members with two specific agenda items:

1. To dissolve the board and
2. To appoint an interim manager for the society.

The above process would have been presided over by the Secretary for Health in the Ministry of Health and Child Care. However, the board resigned and dissolved itself before the above mentioned procedure could be effected. To facilitate completion of this process and to restore full corporate governance structures and procedures, it is necessary to find a suitable entity to take the function of an interim manager for the society for a period not exceeding twelve months.

The public will recall that over this same period, Government noted the widespread challenge of inappropriate salaries and allowances for executives of several parastatals, State enterprises and related entities.

Government then put into motion a process to investigate these anomalies and implement corrective measures to address them. We therefore also stood guided by this process which sought to bring sanity in the various institutions in the interests of the greater public whose funds, investments and contributions were being put at risk.

While we stood guided by the enabling Acts and Statutory Instruments, we were also prompted to act by the extra-ordinary nature of the condition existing at Premier Service Medical Aid Society calling for an urgent need to put up an interim arrangement to oversee the operations of the society.

The interim measurements are meant to facilitate as smoothly as possible, the setting up of proper systems to guide and monitor operations of the society, protect public funds and ensure that the society services its membership, over 80% of whom are civil servants.

It is in this spirit that the special Premier Service Medical Aid Society Interim Management Team has been set up; consisting of five senior officials from the Ministries of Health and Child Care, Finance and Economic Development, Public Service Labour and Social Welfare, the Civil Service Commission and the Office of the President and Cabinet.

The interim management team members will be on normal duty operations and will not be remunerated from the society. Their detailed terms of reference have been drafted and the team is being briefed on the details of their mandate. Within the details of the terms of reference is a requirement for them to put in place the preparations necessary for the holding of a members AGM to allow the critical consultation with and direction provided by the general membership of the society.

My Ministry has, in the interim issued Premier Service Medical Aid Society with a conditional operating licence to enable operations to continue with a view of minimising the disruption of services for the membership as well as payment of service providers. The Ministry of Health and Child Care will continue to exercise its oversight function as per the relevant enabling legal instruments. I thank you.

SENATOR MUMVURI: Thank you Mr. President. I want to commend the Minister for coming to update this House on such important issues which are going on in our society. That is a very good statement. He has mentioned things that are going on and as a Ministry, they are exercising the oversight role but we are worried as subscribers to that medical aid. Most Parliamentarians also belong to that society. What I would want to know from the Minister is: has the Premier Medical Aid Society managed to pay off or reduce the US$38 million which was owed to service providers so that we can have a smooth service provided to the clients? Thank you.

DR. PARIRENYATWA: Thank you Senator Mumvuri. It is a very pertinent question. What has happened is that we have demanded from Premier Service Medical Aid Society management to give us updates every month. In that respect, on the 28th of last month, they paid to service providers to the extent of almost half of what each service provider was owing, including the hospitals and indeed some patients.

That was the first tranche of payment that they have done. This Friday, they are supposed to come and brief us on the progress they are making and to see to what extent they are eating into that debt that has been there. I think some progress is being made but we will be monitoring this situation because a lot of our people have really suffered in terms of their medical aid cards being rejected when they go to medical institutions. That is a serious and painful thing. You find people who are very ill go to an emergency service and they are denied service. I do not think we can allow that to go on. We are going to keep a very strong googled eye on their operations. Thank you.

+SENATOR MATHUTHU: I thank the Minister of Health and Child Care for the important report that he has delivered to this Upper House. I also thank him for the measures he has taken to correct corrupt tendencies in the Premier Service Medical Aid Society. When I was reading from the newspapers, I realised that the CEO was speaking negatively and telling people that they should not say anything negative about him that he was earning a huge salary. He was threatening to sue people. I think hon. Minister, it is lack of respect for him after the bad things that he did. What are the measures that have been taken by the Ministry for this person to return the money that he took so that the society is able to pay the debt? I thank you.

DR. PARIRENYATWA: It is true that the CEO has not shown any remorse in the observation that you made. What steps are we taking to try and remedy the situation? Indeed, what has happened is that an interim manager, he is going to look thoroughly at what has happened there and do a forensic audit. The audit is definitely going to bring up what was out and the person will be appropriately disciplined. I think that is the way we should go, that is, to really see it systematically and do it thoroughly and make sure that it is transparent to everybody and that we are not rushed by emotions. Clearly, it is an angering situation but we need, as a Government to be able to do it systematically and according to the legal statutes. Thank you Mr. President.

SENATOR MUTSVANGWA: Thank you Mr. President. We are very happy that the Minister has given us this statement. What we would to know in looking at the terms of reference, I hope they will also look at the high subscription premiums members were being charged. Personally, I have seen strange things happening where premiums of $300 were raised to over US$400 over the last three to five months. It is just not the extraordinary salaries which were being paid, but there were also extraordinary subscriptions being charged to the members. If the Minister can tell us under the terms of reference of this interim team, are they also going to look at that?

DR. PARIRENYATWA: Thank you Mr. President and let me thank Senator Mutsvangwa for making that observation. It is true, our terms of reference will include the issue of the subscriptions that members make, for example, each contribution that is made, the Government contributes two thirds. 80% of the membership of Premier Service Medical Aid Society is civil servants, so it is in our interest to analyse that thoroughly. This impacts on Government’s coffers as well that how much do you contribute and therefore, how much does the Government contribute – so we will look at that.

Further to that, we are setting up a separate authority to look at all medical aid societies and to be in charge of all medical aid societies. It is difficult for medical aid societies individually and they are over 30 of them, to be approaching the Ministry and us arbitrating every time. Therefore, if you put up an authority that is in charge of medical aid societies, regulating them, seeing what they are charging and whether they are in line, we will be at arm’s length a bit but we will be able to monitor what is going on. I think that is the way we want them to look at it in a very holistic manner so that it is not just Premier Service Medical Aid Society. In the end, it is going to be the whole medical insurance that we are going to look at. Thank you.

*SENATOR CHIEF MUSARURWA: Thank you Mr. President. my issues have already been mentioned by Senator Mutsvangwa. Minister, with the knowledge that the PSMAS board was dissolved because of corruption, on the issue of packages, what are you planning to do? Are you going to give them packages?

DR. PARIRENYATWA: It is a very difficult question which I am sure will be answered when we do our audit and we are advised legally and appropriately what is due to the state, what they have transgressed over and I think it will then be addressed that way. Thank you Mr. President.

*MRS. MUPFUMIRA: Thank you Mr. President. I want to thank the hon. Minister of Health and Child Care for the statement that he has given. Looking at what he mentioned about the formation of an umbrella organisation that will look into the operations of the medical societies and also what he said that PSMAS is not a parastatal and that a huge chunk of the finances that go to PSMAS comes from the Government.

The members of the medical society are at the mercy of the medical aid societies. The money is paid in advance, which means that it is a cash business from the ordinary people to these organisations that are being run as businesses for a profit.

I am saying, as the Minister of Health and Child Care, in line with the health of the nation, what can be done to have a national health insurance that can be monitored and managed by the Government because this is cash business. All medical aid societies are receiving money from us and they are running the organisations using this money, abusing it at the expense of health delivery. Some of the conditions are so stringent and we are really at their mercy. What can we do as a Government to have a national health insurance? This was once mentioned and looked into if you look into the archives. You will realise that it is an issue that has been talked about and it will reflect how it can be done to assist most people who cannot afford paying money to the medical aid societies. Thank you.

*DR. PARIRENYATWA: Thank you Senator Mupfumira. The issues that you have mentioned are pertinent, very true and need to be looked into especially medical aid societies or insurances. You may be aware that medical aid societies only cater for 1% of our population, while the rest are catered for by the Government and personal financing.

Even though a lot of noise is being made about this, just 1% is being catered for by the medical aid society and we do not want to subsidise medical aid societies. So the conditions that you have mentioned that they are stringent, are issues that we think if we have an authority, it will look into all that and see that the medical aid society does not refuse to assist people who are above 60, diabetic or have asthma because they are considered high risk patients. We are saying that is what we want to put an end to. Medical aid societies should not make a profit and the conditions you have mentioned should be looked into as we go into this authority.

We have to also find out why they do not want the so called high risk patients. It is better for them to charge slightly higher than to deny them and we need to look into that. The issue of medical insurance is an issue that started as far as 1997 and various issues have been written about the national health insurance scheme whereby everybody should contribute to the scheme even in the rural areas. They can actually pay using their produce. It is a good scheme and it gives basic coverage to everyone but it is something that has been talked about and postponed so I think Senator Mupfumira, what you said is an issue that needs to be taken up to ensure that the national health insurance scheme is there.

The lead Ministry is Public Service, Labour and Social Welfare. We are just there to assist but I also want to say that currently, the hospitals or clinics in the rural areas must not raise their consultation fees. If a person needs to pay US$12, they want to raise it to US$16 or US$19 and as a Ministry, we are saying no for the time being. It should remain where it is and so, no institution can increase its fees. I am saying this to you as Senators that you should ensure that this message is taken to the clinics and hospitals that fees cannot be raised as yet until such a time that we shall see the need for the raise in fees. I thank you.

*SENATOR. MAHOFA: Thank you Mr. President. Firstly, I want to thank the Minister because he came to give us a position regarding the PSMAS that has negatively affected the nation. It is sad Minister that I think most of us did not know or understand that PSMAS was being controlled by the Minister of Health and Child Care because when we look at where we are today, it is surprising to everyone where the Ministry was when all this was happening.

Probably, it is because of the confusion that was within the Government regardless of political affiliations. Minister, I just stood up to say the problem that we face in the rural areas is that the elderly who were on medical aid are having problems in getting even Blood Pressure (BP) tablets, they are actually dying in their homes. Is there something that can be done to make sure the freeze is lifted so that they can go to the clinics and get their medication? They go back home without any medication and they end up calling their children for them to start looking for money for them to get drugs.

We are saying for those poor people in the rural areas, is there no other way that these clinics can revert back to giving medication to people suffering from such ailments? Thank you.

*DR. PARIRENYATWA: Thank you President of the Senate. I want to thank Hon. Senator Mahofa. The issue of PSMAS had gone way out of line and we are hoping that we will address this with a lasting solution. The issue that you have mentioned about clinics, I am not quite sure about that one. Are you saying PSMAS had opened clinics in the rural areas or what? May be you can clarify on that one.

*SENATOR MAHOFA: I can clarify on that. PSMAS was going probably to a surgery in Mupandawana to authorise that their clients should get medication for free. They had been authorised to look into the computer and give you the medication. Most surgeries that are run by people, this is how they were operating, especially for farmers.

* DR. PARIRENYATWA: I think I have understood. I think that this issue will need to be looked into and included in the issues that we are looking into to find out why farmers are being denied their medication, to ensure that most people can have access to their medication. So, I will put it into the issues that we have actually been looking at. Thank you Mr. President.

*SENATOR MASHAVAKURE: Thank you Mr. President. I heard the Minister talk of surplus and not profit. My question is when they are making surplus can they not share the surplus with me the client because if I had contributed US$10 and used US$2, can the remainder be pushed to the next year so that I am not found with a shortfall. So, on the issue of surplus can something be done so that the surplus is shared amongst us the clients? Thank you.

* DR. PARIRENYATWA: Thank you Mr. President. I want to thank the Senator for raising the question. It is an issue that we also have talked about. I remember, while I was still in private practice, I once asked medical aid societies that if someone has been contributing the whole year and has not been treated, why is that not carried over to the next year, but I did not get a clear answer. I think that we now have an opportunity to ensure that such issues are addressed. Even a car has a no claim bonus. So, we need to look into how this can be converted into some benefit to someone who has been contributing and has had the minimum service. I think it is something that we will be able to address.

SENATOR CHITAKA: Thank you Mr. President. Taking advantage of your presentation Hon. Minister, in your preliminary investigation, PSMAS now has a vast expense network of clinics – did you find out whether those young doctors, who work there, are also being paid exorbitantly or are they being used as cheap labour by the chefs who then cream in the big packages. Thank you.

* DR. PARIRENYATWA: Thank you Senator Chitaka. I think that when we do a remuneration audit, we will address that and see how this situation currently stands. If I were to give you figures right now, I might not be able to give you the correct position. We will see what each person is getting and then that will guide us after the audit.

SENATOR MUSAKA: Thank you Mr. President. I also wish to thank the Minister for coming to shed light on the goings on at PSMAS. My question is in two parts. The Hon. Minister says that PSMAS is not a parastatal, therefore I should think that it can only be a Government company. If not so, then who owns it?

My other question is to seek clarification from the Minister regarding the process and procedure when investigating companies that are either Government owned or parastals, where wrong doing is seen to have happened because there tends to be either a commission of enquiry or forensic audits, which in my view are very expensive. Are the police not competent enough once wrong doing has been suspected? Can the police not just deal with it? I am sure that they are very competent and they can do it properly. They can arrest the person and name and shame that person. I just want to seek clarification on whether there is a law which has got the route of a commission or a forensic audit, which is quite expensive, while the police are quite capable of doing the job. I thank you.

*DR. PARIRENYATWA: I want to thank Hon. Senator Musaka for the two questions. The first one being who owns PSMAS since we said that it is not a parastatal. We, as the Government claim moral ownership because 80% of the contributors are civil servants and that money is also reflected as coming from Government, but in terms of legalities, the board is elected by the membership and the members include yourselves. So, those are the people who actually own it. The board is made up of people elected by the members and five people nominated by the Government. The ownership is actually the membership. So we do not really own it. It is not a quasi parastatal but what it is, is that we contribute a lot of money into it. Secondly, we administer the Statutory Instrument as Government for all medical aid societies. So, our entry point is there as well, as a Statutory Instrument.

The second question that you asked is that audit is expensive, why can we not get the police to do investigations. I have to ask others which would be more beneficial? I will ask from my colleagues but it is something that has come from you and we will also look into it. Thank you.

+SENATOR A. SIBANDA: Thank you Mr. President. The Minister highlighted that the board was dissolved. For now, who is running PSMAS and how much are they getting from that? Are they not the same people who get large earnings?

* DR. PARIRENYATWA: Thank you Senator Sibanda. Your question is, who is running PSMAS seeing that now there is no board and also the issue of how much management is getting, if I got the questions correctly. That is why we are putting up this management to run it as an interim measure. This is the one that is going to literally take the place of the board for the time being, but in terms of salaries, I am aware that this issue is being discussed with the Office of the President and Cabinet, to really say how much they should get. This is an issue that is under discussion. I know that it is definitely not the same salaries that were so insane. I know that it is being discussed to get to some levels that have a modicum of reasonableness. I will not be able to give you a definite answer, but I know that it is far away from what it was before. It is being discussed to try and rationalise it and make it reasonable.


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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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