Private Health Insurance (Medical Aid) and Huge Shortfalls in Zimbabwe: Policymakers playing ducks and drakes

By: Enock Musungwini, MPH, MBA


A shortfall is the difference between what a health service provider charges for a patient’s treatment and what the medical insurance company will pay for that service. Shortfalls are sometimes presented as a co-payment, which is the gap between what the Private Health Insurance (PHI) company or medical aid pays to the health service provider for service rendered to the patient and what the health service provider will have charged the patient, known as a tariff. According to Suriyawongpaisal et al. (2016), huge shortfalls expose patients to out-of-pocket payments and catastrophic health expenditures (CHE), which pose a serious barrier to accessing emergency care for patients with valid medical aid membership. CHE is a situation where the medical and/or health care costs and expenditures of a household are so high that they exceed the level of the family’s capacity to pay and, in most instances, are above 50% of the household income, which is way higher than the average recommendation by the Organisation for Economic Cooperation and Development (OECD) of 20%.

International context

According to the World Health Organisation, catastrophic health expenditure occurs when out-of-pocket payments (cash) for healthcare services of a household are greater than 40% of the household’s capacity to pay for health care. According to Lazar and Davenport (2018), shortfalls are one of the major complications associated with Private Health Insurance (PHI) and are a major barrier to accessing health care. Sekhri and Savedoff (2006) stated that PHI plays a critical role in improving access to health services around the world, especially in countries with widely different income levels and health system structures like Zimbabwe. Sekhri and Savedoff (2006) further stated that the Private Health Insurance (PHI) sector requires serious regulation by policymakers to make a meaningful contribution towards universal health coverage and health equity. The World Health Organisation (2023) documented that user fees, out-of-pocket payments, and huge shortfalls are challenges to access of healthcare and the achievement of universal health coverage, which has been regarded internationally as fundamental to poverty reduction strategies. The World Health Organisation (2023) further stated that universal health coverage (UHC) means that the population has access to quality healthcare when and where it needs it without suffering financial hardship.

Shortfalls hinder patients with a valid medical aid card from accessing services at the time of need, thereby causing delays, complications, and even death, and this has an effect on the achievement of the United Nations Sustainable Development Goals, in particular Goal 3. The World Health Organisation documented that voluntary health insurance (VHI) is a mechanism to finance health systems and can be private, quasi-government, or community-based. The world has witnessed a significant growth of private and voluntary health insurance, particularly in low- and middle-income countries, because of the emergence of a middle class in those countries because people are able and willing to pay the premiums associated with voluntary or private health insurance. People join private health insurance to cushion themselves from catastrophic health expenditures and access better-quality and more convenient care in the private sector.

The Zimbabwean context

Zimbabwe is a signatory to the United Nations Sustainable Development Goals, and SDG 3 focuses on ensuring healthy lives and promoting well-being at all levels. At the centre of achieving SDG 3 is universal health coverage, which is meant to ensure that all people obtain the health services they need without suffering financial hardship when paying for them. With the presence of huge shortfalls in the private health insurance sector in Zimbabwe, this goal will be greatly affected, as will the country’s progress towards SDG 3. According to Sekhri and Savedoff (2005), Zimbabwe has one of the highest rates of private health insurance (PHI) expenditures as a share of total health expenditures in the world at about 30%, which is in stark contrast to the modest 8–10% PHI coverage in terms of members in the country. The 2015 National Health Accounts study in Zimbabwe showed that 26% of health Services in Zimbabwe are financed from household out-of-pocket payments, 21% from the national budget allocation, 16% through private health insurance schemes, 15% from foreign aid, and the rest from private corporations and nongovernmental organisations. The huge shortfalls, as high as 50%, charged to patients with a valid medical aid card are a worrisome development as they affect access to vital emergency health services at the time of need. Huge shortfalls cause catastrophic health expenditures and affect access to vital health services. According to Ataguba and Gould (2003), private health insurance is aimed at improving access to health care and reducing direct out-of-pocket payments, and the presence of shortfalls as high as 50% of the cost of health services defeats the whole purpose of members joining PHI in Zimbabwe.

Private Health Insurance companies (medical aid societies) in Zimbabwe are regulated by the Ministry of Health and Child Care under the Medical Services Act (Chapter 15:13) and statutory Instruments 330 of 2000 and 35 of 2004. Most Private Health Insurance companies (healthcare funders) in Zimbabwe are members of the Association of Healthcare Funders of Zimbabwe (AHFoZ). AHFoZ is a member-based not-for-profit organisation or association for medical aid societies and is governed by a constitution and a comprehensive code of ethics but is not a regulator. AHFoZ tries to maintain general standards in the private medical insurance industry, but as a non-regulator, it has its weaknesses in that it cannot sanction, impose penalties, or de-register errant medical aid societies. Experience and reports have shown that major or bigger medical aid societies that are members of AHFoZ have a bigger say in the running of the association, including the setting of fees and other topical issues in the medical aid industry at large. As explained by AHFoZ Chief Executive Officer Shylet Sanyanga in the Herald dated March 24, 2023, a shortfall is a difference between what a health service provider charges and what the PHI scheme pays out for the service rendered. This description concurs with Odeyemi and Nixon (2013), who stated that a shortfall arises when there is a difference between an agreed tariff of fees set and the fee charged by a health practitioner or health facility for treatment services.

Why are there huge shortfalls?

There are various reasons put forward by various stakeholders and players in the health supply chain for why there are huge shortfalls in the private health insurance sector in Zimbabwe. According to a Ministerial statement by the then Minister of Health and Child Care, Hon. David Parirenyatwa, published by Veritas on June 23, 2016, shortfalls were a result of disagreements over tariffs (schedules of fees) between Private Health insurance companies and health service providers. The statement further states that the disagreements were mainly on tariffs charged by specialist doctors, general practitioners, laboratories, and private hospitals. However, other sentiments from different sections of stakeholders are of the view that the regulations governing the PHI industry are either falling short or are not being enforced, and that there is sometimes discretion in their application. It is further alluded to that the government, through the Ministry of Health, being headed by medical doctors, might have conflicts of interest by being a regulator and provider of PHI on one side in the case of PSMAS and being a regulator and having some top executives in the Ministry being shareholders or direct providers of private health services.

An article that appeared in the Sunday Mail dated July 17, 2022, titled “When Medical Aid Becomes an Inconvenience,” reported that a patient who was a member of a particular medical aid was charged as much as US$125.00 for a scan as a shortfall on top of what his medical aid was going to pay to the health service provider. The same patient was asked to pay US$250.00 as the full cash price for the same scan at a private hospital. The same patient went to another private clinic for a scan and was charged US$50.00 as a shortfall on his medical aid. Furthermore, the same client was charged US$40.00 as a shortfall for drugs at a local pharmacy but later learned that the same drugs cost less than US$20.00 when bought in cash. This scenario and many other similar cases raise a lot of questions about what is really causing and driving the huge shortfalls that patients are required to pay at the point of accessing health services when they have a valid medical aid card. Other industry players have argued that shortfalls can help deter behaviours like doctor shopping, polypharmacy, self-referrals, abuse and unscrupulous use of medical aid cards. However, the magnitude of shortfalls is the major concern when they are as high as 50% to 70% of the medical service and patients fork out money like they are on a cash basis (out-of-pocket payments).

Author’s opinion

It is my opinion that the problem of shortfalls in the Private Health Insurance in Zimbabwe is caused by a gamut of factors and these includes limited regulatory oversight and enforcement of the available statutory instruments by the regulator, over pricing by some private health service providers, abandoning of core business by some private health insurance companies venturing into and investing in non-core business and some not even related to healthcare, likely conflict of interest in the medical practitioners and health professionals wo venture into private health insurance, too much players in both private health insurance and private services providers, lack of group practises model in most private practitioners to share overheads and the influence of powerful medical aid players in policy setting and execution. It is unfortunate that the patients will be victims when they are at health service provider practises, as clients or members when they are at private health insurance companies, and as the public when they are viewed by the regulator (the government and Ministry of Health). Other possible causes and contributing factors include moral hazard, information asymmetry, and adverse selection in the private health insurance business. Moral hazard is when a person covered by medical aid will adopt reckless behaviour knowing that he or she is covered and may go on to deliberately seek medical services just for the sake of using the benefits, while adverse selection is when people with high risk, like chronic conditions, who require more health care and services are the ones likely to join private health insurance and are likely to affect risk pooling and use all the contributions, including for other members, such that the medical aid fund will not grow. Another factor is the huge marketing, administrative, and operational costs incurred by private health insurance companies as they try to compete for the small pie, which will deplete money meant to cover members for medical services.


It is therefore my opinion that there is a need for a phased approach. The government, through the Ministry of Health, can set up an independent think tank or expert committee to investigate the regulation of private health insurance in Zimbabwe, taking stock of what has worked, what has not worked, and why certain elements have not worked. The government, through the Ministry of Health and other key strategic institutions, should engage in an intensive consultation process with service provider associations, private health insurance companies, academia, employers’ associations, professional associations, and international bodies like World Health Organisations to solicit their input and ideas in a holistic way. The consultation process should be led by independent, non-conflicted experts, if possible, and not by health service provider groups or private health insurance companies that have vested interests. The other step is to investigate the issue of high charges (tariffs) charged by private health service providers because huge variances in the cost of one procedure between practitioners sometimes don’t justify the cost buildup, including one procedure being charged three times by one medical practitioner and half the cost by another. This process can be aided by working with actuarial firms and other expert groups to try to find common ground for the benefit of patients. Part of the process will be to investigate the cost drivers, root causes, and what the practitioners put forward to justify the huge costs.

Furthermore, the committee will need to look at the reimbursement levels and turnaround time in terms of settling medical practitioners claims by PHI, evaluate whether 60 days is still feasible in the hyperinflationary and cash economy of Zimbabwe, and adjust the statutory instruments to reflect what is obtaining in Zimbabwe. The committee should also look at the fiduciary ability and competencies of principal officers leading and managing private health insurance companies so that there are set criteria for principal officers handling public funds and that they are up to the task. In terms of corporate governance, there is a need for establishing a code for how boards of private health insurance companies should be composed and make decisions in terms of the public funds they handle in the interest of members. The government, through the Ministry of Health, should enforce minimum capital requirements for the opening and renewal of private health insurance licences. The independent committee will then work with the Minister of Health on a long-term plan to move with speed towards the establishment of an independent regulatory body for the medical aid societies, as has been reported before in the Herald dated September 11, 2015, and Health Times dated March 18, 2021, but has taken longer to be implemented. Is it not time for the government to move with speed now to introduce the Zimbabwe national health insurance and follow the steps of Ghana, Rwanda, Kenya, and recently South Africa in finalising its national health insurance? Food for thought and a discussion for another day!


About the author:

Enock Musungwini is a public health practitioner, health management consultant, and development practitioner with research interests in health system strengthening, health financing, and social determinants of health. He holds an MSc Public Health degree with a research award from the London School of Hygiene and Tropical Medicine in the UK, a Masters in Business Administration from the Graduate School of Business Leadership at Midlands State University, a BSc Hons Psychology, and many other qualifications. He is a member of various professional associations, networks, and organisations in Zimbabwe, Africa, and internationally, namely the Africa Evidence Network Reference Group committee member (South Africa), the International Government Science Advice Africa chapter steering committee member (INGSA-Africa), the Consortium of Universities for Global Health member (CUGH USA), the Health Systems Global Thematic Working Group on Community Health Workers, the Royal Society for Tropical Medicine and Hygiene (UK), and the Alumni Ambassador for the London School of Hygiene and Tropical Medicine (UK). He can be reached at


While the author acknowledged and referenced articles from other organisations and 
individuals, the views expressed in this opinion piece, as well as any errors or 
omissions, are the sole responsibility of the author.






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