Medical Aid Society of Malawi (Masm) says it is not ready for demutualisation, a process that could have turned the health insurance scheme from member-owned society to a shareholder-owned company.
Masm board chairperson Evans Matabwa, speaking at the society’s 30th annual general meeting in Mzuzu on Monday, said they are not yet at a position where they could consider demutualising.
“Masm members will look at it in later years once performance has improved because it goes hand in hand with it as advised by experts,” he said.
Matabwa, who is also chief executive officer of Auction Holdings Limited (AHL) said the board engaged a business and financial advisory firm Deloitte to undertake a study on feasibility of the society demutualising and the consultant’s report provided definition of the terms, rationale, form and the pros and cons of demutualisation.
“Considering the performance of the society over the immediate past five years, the consultant made suggestions on improvements that would be needed to make Masm a more viable institution and attractive to demutualisation,” he said, adding that after looking at the performance of the organisation, the consultant advised that it has to improve on performance first.
“The debate still goes on. We have not demutualised Masm today, that item is still work in progress,” said Matabwa.
The issue of demutualisation was a bone of contention at an extraordinary general meeting (EGM) in January this year in Blantyre where members engaged in a heated debate on the matter.
To improve on performance, Matabwa said the board has bought a state-of-the-art Information Communication Technology (ICT) equipment to arrest deep-rooted fraud that has hit the society for a long time.
“We are in the process of changing our ICT system where some medical practitioners, patients and employees have been faking claims, which drained our resources to the extent that it crippled the society,” he said.
Matabwa said the new package will check fraud in its totality, hence slowing the society on the need to raise contribution rates when there is a shortfall.
Commenting on the same, Masm chief executive officer Sydney Chikoti said fraud weighed down its members, forcing them to dig dip in their pockets to pay contribution fees to ensure the society continues operating effectively.
Chikoti said the ICT system which will cost K300 million, will be fully operational by the end of this year.
He said fraud claims 30 to 45 percent of the society’s revenue.
Speaking on others issues concerning Masm, Matabwa promised that the society will improve on internal efficiencies to ensure that all leakages are sealed.
He said Masm has since disengaged its medi-clinics and an independent board is running them. A general manager has been hired to operate the clinics.