Medical sector clash over medical aid 'ponzi scheme'

A fierce dispute has emerged in Zimbabwe’s private healthcare sector after independent doctors, specialists, pharmacists and hospital operators accused medical aid societies of running a system they likened to a “Ponzi scheme,” calling for Parliament to prohibit vertical integration in healthcare funding.

In submissions to lawmakers, the healthcare providers argued that medical aid societies (MAS) should not be allowed to both collect member contributions and own the hospitals, clinics and pharmacies where patients receive treatment. They say this structure creates a monopoly that limits competition, reduces patient choice and undermines the viability of independent practitioners.

The dispute centres on Section 14A of proposed legislation, which would bar health funders from owning healthcare service providers. Doctors and hospitals support the clause, arguing that patients are increasingly being directed to facilities owned by medical aid societies because independent providers are being offered unsustainably low consultation fees, in some cases as low as US$5 compared to typical charges of US$25.

They argue that this creates a conflict of interest, asking why the same entity controlling healthcare funds should also control service delivery points.

The coalition also referenced longstanding controversies involving the Premier Service Medical Aid Society (PSMAS), alleging that member contributions were previously diverted into non-health investments such as property and mining ventures, while healthcare facilities reportedly experienced shortages and patients faced access challenges.

The providers further rejected comparisons with other jurisdictions, arguing that countries such as South Africa apply regulatory safeguards to prevent funders from directly controlling healthcare delivery.

They warned that without reform, Zimbabwe risks replicating systemic inefficiencies seen where single entities act as regulator, funder and service provider simultaneously.

Their proposals include the immediate adoption of Section 14A, the creation of an independent healthcare regulator, forensic audits of medical aid investments since 2015, publication of governance decisions and the introduction of transparent tariff structures.

The submissions now place Parliament at the centre of a major policy battle over the structure of Zimbabwe’s private healthcare system, with lawmakers expected to deliberate on the proposed reforms in the coming weeks.