News / National
Chitungwiza Hospital 'privatisation' blocked
02 Jun 2019 at 09:12hrs | Views
The government was forced to abandon private partnerships at Chitungwiza Central Hospital after it emerged that the public health institution was being used by private players to make money, it has been revealed.
The decision to suspend the arrangement was reached after an internal special audit by the Health and Child Care ministry in 2017 at the time the new minister Obadiah Moyo was the CEO.
Conducted between July 17 2017 to 2018, following a request by the ministry, the audit exposed that Moyo presided over partnerships with various companies at the hospitals that were not benefiting the public.
Some of the partnerships include the management of the pharmacy, the radiotherapy unit, laboratory, mortuary, catering and finance, which exposed patients to higher costs while the health centre was getting little benefits.
According to the report, the partnerships resulted in partners gaining more than the hospital. Documents revealed that the hospital executive lacked legal advice in the formulation of the agreements.
"The revenue collected by the hospital declined from a monthly average of $315 740 in 2013 to $75 090 in 2017.
"As a result, the hospital was failing to pay its suppliers of goods and services thus compromising service delivery," part of the report dated October 24, 2017 read.
The report was directed to permanent secretary in the ministry Gerald Gwinji and copied to principal directors in the ministry as well as the Comptroller Auditor-General.
Partners running the radiography section, laboratory, mortuary and pharmacy, the report claimed — were all collecting the revenue generated and banking the money in their bank accounts and the hospital's accounts department was not involved.
"The hospital did not have any effective system for determining profits made by partners although their contracts stated that the commission remitted was based on the profit generated.
"This posed a risk of understated profits, leading to low commissions being remitted to the hospital," the report observed.
The partners were neither paying commissions as agreed, nor availing books of accounts to the hospital accounts department for verification of the commission remitted.
Pricing of the medicines by the private pharmacy, Baloon Flight Pharmaceuticals, was not covered in the contract, resulting in most medicines being priced beyond the reach of the patients.
A mortuary was also turned into a funeral parlour by Doves Funeral Services, which saw people being charged $15 in "storage fees" after three days to keep bodies of their relatives.
Investigators said the practice was against government's promise to provide Zimbabweans with affordable health.
The contracts also did not take into consideration overheads, which were borne by the hospital.
"Despite several breaches by the partners, the hospital management did not formally write to the former, calling for remedies as per contracts," the report read.
The alleged irregularities forced Gwinji to order the hospital to wind off the conracts within 60 days in a letter to Moyo dated June 25, 2018, two months before he was appointed Health minister.
However, in response the hospital said the joint ventures were not about making the hospital profitable, but ensuring reliable service delivery.
"The main idea of the joint venture project (JVPs) was guaranteed services not profit making. Hence the revenue was to drop since the services are now being offered by partners and only an agreed percentage accrued to the hospital," the hospital said in a response dated January 25, 2017.
The hospital claimed the radiographic equipment as repaired with the partners meeting the costs.
It denied accusations that partners were rejecting medical aid, and defended the charging for bodies in the mortuary after three days saying it was done to encourage early burials.
In another letter dated February 16, 2018 to the chief internal auditor in the ministry, Moyo said the issue of joint ventures was mooted during the hyperinflation era when hospitals were no long able to provide services.
He said the private sector intervention was approved by the ministry due to meagre funding from Treasury.
Moyo also attached tender documents and financial statistics to show that everything was done above board.
"In conclusion, JVPs will continue to be relevant in the absence of adequate funding and it is our fervent belief that the services will continue to improve with more experience gained and model implementation at other health institutions," he wrote.
The decision to suspend the arrangement was reached after an internal special audit by the Health and Child Care ministry in 2017 at the time the new minister Obadiah Moyo was the CEO.
Conducted between July 17 2017 to 2018, following a request by the ministry, the audit exposed that Moyo presided over partnerships with various companies at the hospitals that were not benefiting the public.
Some of the partnerships include the management of the pharmacy, the radiotherapy unit, laboratory, mortuary, catering and finance, which exposed patients to higher costs while the health centre was getting little benefits.
According to the report, the partnerships resulted in partners gaining more than the hospital. Documents revealed that the hospital executive lacked legal advice in the formulation of the agreements.
"The revenue collected by the hospital declined from a monthly average of $315 740 in 2013 to $75 090 in 2017.
"As a result, the hospital was failing to pay its suppliers of goods and services thus compromising service delivery," part of the report dated October 24, 2017 read.
The report was directed to permanent secretary in the ministry Gerald Gwinji and copied to principal directors in the ministry as well as the Comptroller Auditor-General.
Partners running the radiography section, laboratory, mortuary and pharmacy, the report claimed — were all collecting the revenue generated and banking the money in their bank accounts and the hospital's accounts department was not involved.
"The hospital did not have any effective system for determining profits made by partners although their contracts stated that the commission remitted was based on the profit generated.
"This posed a risk of understated profits, leading to low commissions being remitted to the hospital," the report observed.
The partners were neither paying commissions as agreed, nor availing books of accounts to the hospital accounts department for verification of the commission remitted.
Pricing of the medicines by the private pharmacy, Baloon Flight Pharmaceuticals, was not covered in the contract, resulting in most medicines being priced beyond the reach of the patients.
A mortuary was also turned into a funeral parlour by Doves Funeral Services, which saw people being charged $15 in "storage fees" after three days to keep bodies of their relatives.
Investigators said the practice was against government's promise to provide Zimbabweans with affordable health.
The contracts also did not take into consideration overheads, which were borne by the hospital.
"Despite several breaches by the partners, the hospital management did not formally write to the former, calling for remedies as per contracts," the report read.
The alleged irregularities forced Gwinji to order the hospital to wind off the conracts within 60 days in a letter to Moyo dated June 25, 2018, two months before he was appointed Health minister.
However, in response the hospital said the joint ventures were not about making the hospital profitable, but ensuring reliable service delivery.
"The main idea of the joint venture project (JVPs) was guaranteed services not profit making. Hence the revenue was to drop since the services are now being offered by partners and only an agreed percentage accrued to the hospital," the hospital said in a response dated January 25, 2017.
The hospital claimed the radiographic equipment as repaired with the partners meeting the costs.
It denied accusations that partners were rejecting medical aid, and defended the charging for bodies in the mortuary after three days saying it was done to encourage early burials.
In another letter dated February 16, 2018 to the chief internal auditor in the ministry, Moyo said the issue of joint ventures was mooted during the hyperinflation era when hospitals were no long able to provide services.
He said the private sector intervention was approved by the ministry due to meagre funding from Treasury.
Moyo also attached tender documents and financial statistics to show that everything was done above board.
"In conclusion, JVPs will continue to be relevant in the absence of adequate funding and it is our fervent belief that the services will continue to improve with more experience gained and model implementation at other health institutions," he wrote.
Source - the standard
