PSMAS debts balloon to $140m

Premier Service Medical Aid Society’s debt with service providers has reportedly ballooned to about $140 million from $38 million over the past few months, with those owed now seeking legal recourse.

According to the Herald , the society, through its subsidiary Premier Service Medical Investments, was struggling to keep stocks of medicines in its pharmacies.

This has resulted in service providers and members losing confidence in the society’s hope for recovery.

Most service providers said they were now contemplating legal action against the society for failing to settle claims within the stipulated time frames, while others have already started the process to recover their money.


Although details of who was owed were not available as of yesterday, sources said the majority were pharmacies and specialist doctors in various fields.

“The law stipulates that claims should be settled within 60 days, but they have not paid us anything since the beginning of the year. We are now contemplating the legal route,” said one source.

Things are also not rosy at PSMI, which is reportedly failing to pay its workers on time and has failed to stock its health institutions with required drugs and sundries.

It is understood that the situation at PSMAS had been compounded by the fact that Treasury had not made disbursements since the beginning of the year to the society, yet it allocated $120 million, which was expected to be released in batches of $10 million every month.

“Last month their doctors threatened to down tools following a delay in payment of their salaries,” said another source close to the goings on.

PSMAS interim manager Dr Gibson Mhlanga would neither confirm nor deny assertions that they were not receiving their dues from Government, which pays a significant percentage for all civil servants who form the bulk of PSMAS membership.

Without giving a specific figure of what the society was owed by its members, Dr Mhlanga said PSMAS would continue to engage its members and member organisations on the arrears.

He said PSMAS and PSMI were not spared from economic challenges faced by all other sectors of the economy.

“We accept that the payment patterns have not been consistent and we have come from paying out every fortnight to a situation where we now pay our service providers after three months,” said Dr Mhlanga.

He said on the issue of drugs, the prescription fill rate was between 70 percent and 80 percent.

“This means that for every prescription that has 10 items, for example, the member will be able to find 7 – 8 items on average. The rate fluctuates between the script and the pharmacy and ranges from 40 percent to 100 percent.

“We will be the first to admit that this is neither desirable nor acceptable and we are taking measures to harness the situation within the possibilities of the greater economy. The situation, we believe, is not peculiar to PSMI,” he said.

Dr Mhlanga said the society was struggling to operate under the current economic situation but said through application of prudent management systems of the little resources available, the society was able to remain in operation.

PSMAS made headlines towards the end of last year after it got involved in a salary scandal which saw its top executive gobbling obscene salaries and perks at the expense of service delivery.

This resulted in the ouster of the society’s board chairperson and its CEO, Dr Curthert Dube was forced to retire.

Government then appointed an interim management, chaired by Dr Mhlanga, mandated to look into the society’s remuneration structure, critically review its financial position, its constitution and facilitate a forensic audit among other expectations.

To date, the management has slashed salaries by about 90 percent, instituted a forensic audit and re-structured the society among other achievements.

Dr Mhlanga confirmed that the first draft of the forensic audit had been released and said he was still going through it before appropriate action would be taken.

The interim management is set to run until the end of June.