PSMAS subs decline

20

PREMIER Service Medical Aid Society’s (PSMAS) subscription base has been hit by poor economic performance.
PSMAS board chairman Jeremiah Bvirindi told society members at the group’s annual general meeting last week that subscriptions declined to $238 million in 2017 from $242 million in 2016.
“The group attained revenues of $248 million, while subscriptions were $238 million, this was a decline from the previous year by six million for the group and four million for the society,” Bvirindi said.
In 2016, the group’s subscriptions declined to $250 million from 2015. The chairman said the decline in subscriptions had been a result of economic challenges.
“The decline noted in subscriptions is a result of the prevailing economic challenges that led to some private sector companies downgrading the medical insurance cover, with some member companies completely withdrawing the medical benefit of their employees,” he said.
As a result of the decline in subscriptions, the group’s turnover went down by 2,4 percent in 2017. Bvirindi said the “stagnant subscription base” has also made it difficult for the group to deal with the prevailing drug shortfall that has been caused by increases in drug prices.
Amounts owed to the group increased by $14 million representing a 20 percent increase. Bvirindi said trade and other receivables closed the year at a balance of $150 million. This was also a result of the failure of members to service their subscriptions.
PSMAS suffered some loss in membership following conflicts with medical service providers over unserviced claims and scandals of misappropriation of society funds by top management in 2014.PSMAS, however, says “most” of the members that were lost in the mass exodus have since returned.
Despite the decline in revenues and subscriptions, the group recorded an increase in net surplus for the period under review.
“A strong signal of an upward trend for the company in terms of financial performance is the net surplus that was recorded for the year of $66 million up from $27 million in 2016,” said Bvirindi.
The group’s claims decreased by nine percent due to a number of cost cutting initiatives which PSMAS says started to bear fruit in 2017, these include the introduction of global limits, yearly limits on doctors’ visits per patient and regular audits of claims. The society’s claims expenses decreased by 19 percent.
Bvirindi said the decrease in claims expenses was also a result of the elimination of intergroup expenses between PSMAS and the group’s subsidiary, Premier Service Medical Investments (PSMI).
Group administration expenses decreased by 13 percent mainly as a of a decline in credit losses at $9 million from $21,3 million in 2016.
newsdesk@fingaz.co.zw