Ousted board want Samwumed curator, Duduza Khosana, gone
Ousted deputy chairman, Andre Maxwell, says the changes made by the curator will render the scheme unsustainable
The provisional curator of Samwumed has cancelled contracts and proposed benefit changes which could render the scheme for unionized municipal workers unsustainable, an urgent court application seeking to remove her alleges.
Andre Maxwell, the ousted deputy chairman of the board of the 80 000-strong scheme, filed the urgent application in the Cape High Court last week asking the court to remove Duduza Khosana who was appointed by the same court in May.
Maxwell and 12 other ousted trustees have opposed the curatorship order, which was brought by the acting registrar of medical schemes Dr Sipho Kabane on the grounds that the board of the scheme was dysfunctional as a result of conflict in the South African Municipal Workers Union. Nine trustees are appointed from the union’s executive committee. The union matter has since been settled.
But in his latest application, Maxwell asks the court to urgently remove Khosana and replace her with the former CEO of Medscheme, Kevin Aron, or alternatively to restrict her powers to avoid irreparable harm to the scheme.
Both Khosana and the acting registrar have filed notice of their intentions to oppose Maxwell’s application, Khosana’s lawyer Joseph Maluleke of RW Attorneys says. Khosana previously told Business Day that she had uncovered irregularities that she could not disclose to the media. She said she had reported these to the acting registrar and would also report them to the court.
Arguing for the matter to be heard urgently without waiting for the October 25 return date on the provisional curatorship order, Maxwell says in his latest application that the viability of the scheme may be compromised and senior managers decimated if Khosana remains in office.
He says Khosana has cancelled the scheme’s contract with the Melomed Hospital group to be the designated hospital network in the Cape Town metropolitan area. He says the contract has been in place since 2003 and an actuarial analysis shows it saves the scheme up 25% of its potential hospital and specialist costs in the area.
Maxwell says Khosana offered no valid reasons for cancelling the contract and had been warned against doing so by the scheme’s principal officer, Neil Nair, who said it would expose the scheme to higher fee-for-service costs in the open hospital market.
Nair is one of five key staff members of the scheme that Khosana has suspended on full pay and Maxwell’s affidavit notes four other key employees who have resigned due to low staff morale.
The affidavit says Khosana has says proposed "absurd" benefit increases for next year -raising hospital benefits from R250 000 a year to R1 million on the cheaper option and from R500 000 to unlimited on the more expensive option. Maxwell says that this will render the scheme "unsustainable".
Maxwell’s application is supported by an affidavit from healthcare actuary Taurayi Chinowona who says the proposed benefit change is likely to exponentially increase contributions, increase the claims ratio, destabilise the scheme’s risk pool by encouraging the old and sick to join the scheme and cause members to buy-down to the less expensive option.
Maxwell also says that the scheme’s budget provides for a claims ratio of 85% of contribution income, but since the curator took over this ratio has increased to 98% and this is being funded from the scheme’s reserves.
The scheme had reserves of more than R1 billion at the end of 2016 -a ratio of 86% of contribution income -well above the 25% required by law.
Maxwell says Khosana is paying herself R234 600 a month and incurring unreasonably high expenses. He says she is not booking flights and accommodation through the scheme’s booking agent and she suspended the manager of corporate services Loedt Zemanay after he asked for supporting documentation for her expenses.
After allegations about Khosana’s conduct were raised by unnamed concerned members of the scheme on social media, Kabane told Business Day his office was investigating. bdlive