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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