Govt pushes medical aid societies to sell their clinics and pharmacies

Medical aid societies in Zimbabwe have been urged to disinvest from providing healthcare services such as clinics, diagnostic centres and pharmacies as part of sweeping reforms aimed at standardising the sector and strengthening financial oversight.

The proposal is contained in amendments to the Medical Services (Medical Aid Societies) Amendment, which seeks to clearly separate the roles of healthcare funders and service providers. The reforms would prohibit vertical integration and return to the traditional model where medical aid societies focus solely on financing healthcare while hospitals and practitioners provide medical services.

Currently, under Statutory Instrument 330 of 2000, medical aid societies are permitted to invest their assets in any way allowed by their constitutions, provided they notify the Ministry of Health and Child Care of such investments.

During a consultative meeting in Bulawayo, stakeholders raised concerns about the proposed changes while seeking clarification on the implementation framework.

Director of policy planning and health economics in the ministry Tonderayi Kadzere said that although the law previously allowed medical aid societies to provide healthcare services, the operating environment had evolved.

“This means that when medical aid societies entered into service provision, it was legal, the law permitted that. But now we want to see how we can reverse this,” he said.

Under the proposed amendments, no medical aid society, its subsidiary or any entity under its direct or indirect control would be allowed to own, manage or operate healthcare service provider assets, including private hospitals and specialised medical units.

Medical aid societies currently holding such assets would be required to submit formal disinvestment plans to the regulator within six months and complete the process within 24 months.

“Any society currently holding a service provider asset must submit a formal disinvestment plan to the regulator within six months,” said Kadzere.

“This includes the complete sale of that business if it is transferred or disposed of and the process must be concluded, with no involvement of related third parties, within 24 months.”

The amendment also introduces a new risk-based capital framework intended to protect members' funds and strengthen the financial stability of medical aid schemes.

Under the framework, societies must maintain capital and surplus levels above the Solvency Capital Requirement, calculated through a Risk Based Capital formula that accounts for underwriting, asset, credit and operational risks.

Permanent Secretary in the Ministry of Health and Child Care Aspect Maunganidze, represented at the meeting by Stephen Banda, said the review of the regulations was necessary as the health financing environment had changed significantly since the introduction of the current framework.

He said the amendments aim to enhance accountability within medical aid societies, strengthen safeguards for contributors and beneficiaries, improve financial transparency and align regulations with evolving healthcare sector realities.

However, representatives of medical aid societies warned that forcing schemes to exit healthcare provision could negatively affect rural communities.

Zimbabwe currently has 42 medical aid societies, but only a few operate facilities in rural areas where private healthcare providers are limited.

One representative said societies had invested heavily in pathology, radiology and other specialised services in underserved areas and warned that forced disinvestment could disrupt access to care and affect long-serving employees.

Other stakeholders argued that medical aid societies expanded into healthcare delivery to fill gaps left by service providers who stopped accepting medical aid cards.

Chief executive officer of the Association of Health Care Funders of Zimbabwe Shylet Sanyanga said funders were compelled to step in when their members could no longer access services.

“One reason is that some service providers suddenly stopped accepting medical aid cards. Medical aid societies, having collected funds from members, still had to find solutions since members had nowhere to go despite paying subscriptions,” she said.

Some stakeholders also raised concerns about the increasing number of Zimbabweans seeking medical treatment abroad after failing to obtain adequate care locally.

Medical practitioners attending the meeting argued that some medical aid societies had gradually drifted from their original mandate as non-profit funders, expanding into healthcare provision as profit-driven enterprises.

Authorities say the ongoing consultations will help refine the amendments before the final regulatory framework is implemented.