US$219m govt debt cripples Psmas

TROUBLED Premier Service Medical Aid Society (Psmas) is still in the woods largely due to government failure to settle a US$219 million debt which has resulted in the medical society failing to pay workers’ salaries, among a host of operational challenges.

By Herbert Moyo

The workers downed tools in protest this week.

Psmas, the country’s largest medical aid society by numbers, is owed over US$219 million in unpaid subscriptions by government and US$22 million by various organisations in the private sector. The company is owed a total of US$241 million.

Sources at the medical aid society said workers were last paid their salaries six months ago.

On Monday, workers from various departments downed their tools amid indications that they were plans to prolong the work stoppage if Psmas does not pay them by the end of next week.

“Radiographers, sonographers and other laboratory staff went on strike on Monday. The radiology department and laboratories are closed as we speak,” said one source.

The situation was also said to be desperate at the institution’s West End Hospital in Harare where several patients were prematurely discharged due to shortages of medication and threats of an industrial action. Sources said the hospital was struggling to effectively serve large numbers of patients as Psmas has been failing to remit funds for the institution’s medical aid card holders.

“The staff has not been paid for a while, and patients are not receiving treatment,” said one source, adding that the hospital staff were mulling joining the strike.

Psmas has also reportedly resolved to force employees to take their leave in order to avoid paying cash in lieu of leave.

“Workers are also being forced to take their leave as the company strives to cut costs of paying out cash in lieu of leave. They want every worker to remain with a maximum of 15 days leave,” said one source.

The salary woes have resulted in a staff exodus at some of the society’s pharmacies.

Psmas’ investment arm Premier Service Medical Investments (PSMI) spokesperson Polite Mugwagwa admitted that the company was facing challenges “due to several macro and micro-economic factors, including failure by medical aid societies to remit payments in time and this is an industry wide challenge for all service providers”.

“PSMI is worst affected because we serve in excess of 500 000 patients per month countrywide without charging them any co-payment. When medical aid societies don’t remit payments, the impact on our business is huge and results in our incapacitation as both employer and service provider.”

She, however, downplayed strike reports, saying there had just “been some isolated cases of absenteeism in some of our units”.

“Neither the works council, which is a joint management and staff committee, nor PSMI leadership have so far received any formal notification for strike action by staff. PSMI has not forced any of its employees to go on leave with intention to reduce leave liability,” said Mugwagwa.

PSMI has attempted to restructure its operations in order to achieve effectives but the efforts are yet to bear fruit largely due to government debts.

In February, PSMI announced it had disbanded its 13 subsidiaries and would now operate under the parent company in four divisions, in a move meant to prevent the ballooning of debts and save at least US$2 million per month.
The four new divisions are hospitals division, healthcare division, retail division and diagnostics division.

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