Tuesday 18 October 2022



A US$1 million financial bail out package has been released by Government for Premier Service Medical Investments (PSMI), a subsidiary of Premier Service Medical Aid Society (PSMAS), for restocking pharmacies at a time employees have gone three months without salaries.

Poor service has been reported at PSMI entities such as West End Clinic in Harare and Claybank Clinic in Gweru where staff morale is said to be low. PSMI owns many of the PSMAS assets such as hospitals, laboratories, clinics and pharmacies and was set up as a company owned by the medical aid society since that was considered the best way to hold assets.

The PSMI board has since come under fire from workers for alleged imprudent decisions such as charging of shortfalls to PSMAS members at a time when competitors were not charging any. Recently, the subscriptions for PSMAS were pushed up several fold to take into account inflation, and members expected as a result for shortfalls and co-payments to fall away.

Other allegations include failing to remit statutory obligations, such as PAYE deducted from employees pay, and over-borrowing, thereby exposing the firm to the mercy of financial institutions some of which are calling in all their outstanding loans.

As an intervention measure, Government provided US$1 million for restocking pharmacies most of which were operating with almost empty shelves.

Workers have since raised a red flag over the manner PSMI is using the money as they said the company has roped in middlemen, and that is likely to lead to huge rises in the costs of procuring medicine.

They allege that instead of buying stock directly from suppliers, the PSMI leadership was abusing the restocking capacitation by Government through indirect sourcing where a company called New Avakash is purported to be based in Botswana and is invoicing and delivering stock in the name of PharmaVision from Botswana.

 PSMAS executives that include chief executive Farai Muchena, Victor Chaipa, Cosmas Mukwasha, Shingai Mabuto and Tafadzwa Gutu are on bail on fraud, forgery and theft charges.

Responding to inquiries from The Herald, the PSMI board acknowledged the bail out from the Government saying it would go a long way in rescuing the organisation.

“As part of resolving current operational challenges at PSMI, the board and management expresses sincere gratitude to the Government of Zimbabwe for its recent intervention to capacitate PSMI with stocks, said the PSMI board.

 “PSMI pharmacies, renal clinics, optometry practices and clinical laboratories have since received part of the imported stocks to address the perennial stock out challenges that were affecting service delivery. Through Government efforts, PSMI is also currently working with NatPharm in ensuring consistent availability of affordable medicines to the convenience of the PSMAS members and the nation at large.”

It also acknowledged that employees had gone for three months without salaries.

“The PSMI Board acknowledges the fact that employees have gone for three months without salaries and how the unfortunate circumstances continue to affect the employees’ well-being and their capacity to report for work and effectively discharge their duties, the board.

 “The challenges at PSMI have been in the public domain for the better part of the year and they mainly emanate from cash flow ceilings currently affecting the major client PSMAS. Nonetheless, the PSMI Board, PSMAS and the Government of Zimbabwe are working hand in glove to address the cash flow challenges given their continued adverse effects on PSMI operations, staff welfare as well as civil servants’ ability to conveniently access quality healthcare services, as was the case before.”

On charging of shortfalls, the board adopted it as a short term measure to mitigate the effects of the inadequate cash flows pending adequate capacitation of PSMI operations.

“However, the issue of shortfalls has since been overtaken by events following a board resolution to remove the shortfalls for all services effective 1 October 2022, except in circumstances where a member would have exhausted their benefits, said the board.

 “As a result, members can now conveniently access healthcare services at PSMI without the burden of paying shortfalls and co-payments.”

But agitated workers have since written several letters to the board and other stakeholders outlining their plight that include ejection from their rented houses, children being turned away from schools and failure to pay utility bills.

They have also noted that as a result of over borrowing and failing to repay, one financial institution had now recalled all the institution’s outstanding debts for defaulting.

 Last week funds came from PSMAS, but it was chewed up by bank loans, Zimra and NSSA garnishee orders. “We are operating without tax clearance and so we suffer 30 percent punitive withholding tax as well,” said one employee representative in a letter.

Workers called for prudent use of the capacitation fund from the Government.

 Funds for restocking were being prioritised in non-significant areas such as renal which served only a few chronic patients compared to the chronic care drug program and a laboratory company Medirite which was extremely inefficient in timely delivery, read the letter.

 Employees had not yet been fully paid their salaries since July and engagements with the current leadership had been met with resistance, intimidation and threats of victimisation as they said they sought clarity and transparency on the financial status of the business and what they called the bloated payroll, which was in shambles.

In another letter they highlighted their plight regarding their employer’s failure to pay their salaries.

 A significant number of employees had been evicted from rented accommodation and were now destitute. Amongst these were expatriate optometrists, read the letter.

 A sizeable number of employees had their children sent back home from school as they had not been able to pay school fees and others were failing to meet their proposed payment plans.

 Direct stop order deductions such as funeral policies had not been paid and employees were struggling when faced with funerals of their dependants and beneficiaries. Bank loans had not been paid for the last three months for employees with loans and some are now faced with litigation for defaulting on payments. Herald


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