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Dr David Parirenyatwa

Paidamoyo Chipunza Health Reporter—
Government has identified a consultancy firm to manage the Premier Service Medical Aid Society, which is likely to gobble nearly US$1 million a month in judicial management fees, worsening the debt-ridden society’s financial position.
Most judicial managers charge between three and six percent of a company’s monthly income.

PSMAS’ monthly income averages US$16 million and should the chosen company charge six percent, it will claim US$960 000 per month, while it will walk away with US$480 000 if it uses the lowest rates at three percent.

What this effectively means is that the medical aid society’s expenditure on labour, which stood at over US$1 million for the top 10 executives, will more or less revert to the Cuthbert Dube era.

The consultancy firm — which was chosen by a seven-member committee appointed by the Government — is expected to put PSMAS’  house in order as the interim manager in accordance with the law.

The committee — made up of officials from the Government, the Health Services Board and service providers — had to sift through at least 30 curriculum vitaes to come up with the yet-to-be-named consultancy firm.

Health and Child Care Minister Dr David Parirenyatwa said in an interview yesterday that the firm, which he refused to name until all procedures are done, would be endorsed by PSMAS members before it starts executing its  mandate.

“Yes, we have identified an entity and we are currently consulting amongst ourselves on the chosen entity,” he said.

“The interim manager will of course have to be endorsed by its members in whatever method.”

Some of the duties expected of the interim manager include putting in place governance systems, restructure the society, proposing amendments to the society’s constitution and ensuring that the society meets its mandate as a health funder.

Under the leadership of group chief executive officer Dr Cuthbert Dube, who has since been retired, PSMAS was failing to pay service providers on time, compromising the convenience of its members seeking treatment.

The society’s top management was also earning obscene salaries at the expense of service delivery, with Dr Dube’s salary over US$500 000 every                                                                   month.

Although Dr Parirenyatwa said they had settled for an entity, specifications spelled out in an advert for the post required an individual to take up the post.

The prospective individual was supposed to have a relevant university degree and a Masters in Business Administration.

Dr Parirenyatwa said it was not necessary to dwell on how the consultancy was chosen.

“Why do you want to get into the details of whether we wanted a person or an entity?” he said.

“We told you we settled for an entity and we are still discussing about it.”

Dr Parirenyatwa said they were yet to discuss how the consultancy would be paid.

But sources at PSMAS said the consultancy would be expensive for the struggling medical aid society.

“If it is true that Government has settled for an entity, then obviously it is not going to come cheap,” said the source.

“It has costs to it and the majority of consultancies charge a certain percentage of the company’s revenue.”

PSMAS operations are being run by its management following the retirement of Dr Dube and self dissolution of the board of directors.

The role of the board is being performed by the Ministry of Health and Child Care.

Recently, PSMAS acting CEO Dr Farai Muchena and his team appeared before a parliamentary portfolio committee on Health and Child Care where he told parliamentarians that the medical aid society devised strategies to bring their mandate to  fruition.