To view or download the pdf file on tablet or mobile click the link or download button
PULLING OUT … Private doctors are pulling out of the Public Service Medical Aid Scheme over outdated tariffs and rising costs, placing 300 000 public servants and their families at risk of losing access to affordable healthcare. Photo: Contributed
By Puyeipawa Nakashole
6 August 2025
The Public Service Medical Aid Scheme (Psemas) is facing potential collapse as private healthcare providers continue to withdraw from it due to alleged outdated tariffs, rising operational costs, and “regulatory paralysis”.
This was announced in a media statement by Namibia Private Practitioner Forum (NPPF) chief executive Jürgen Hoffmann on Monday.
Hoffmann says without urgent reform, rural communities and patients in need of mental healthcare and general medical care will be left stranded as services become increasingly unsustainable.
He says the reimbursement rates under Psemas are still based on tariffs set by the Namibian Association of Medical Aid Funds in 2014, despite steep increases in the cost of living and medical supplies over the past decade.
“Medical supply costs have more than doubled. Operational expenses, rent, fuel, food, salaries, and equipment have soared, but we are expected to charge patients as if it is still 2014,” Hoffmann says.
Figures released by the forum show that rent for medical practices has risen from an average of N$3 200 in 2014 to N$7 348 this year, while petrol costs increased from N$11.91 to N$20.37 per litre in the same period.
Salary hikes of up to 100% have become necessary to retain qualified staff.
Practitioners say the Psemas structure designed for a different era is no longer fit for purpose.
Hoffmann says many have opted out, and more are expected to follow.
Provider participation dropped from 93% in 2020 to 75.6% by late 2024. A further 16% have indicated they will not renew contracts in 2025.
If the trend continues, fewer than 60% of private providers will remain contracted to Psemas by the end of the year.
The forum warns of a total collapse by 2027, especially in remote areas where services are already strained.
The NPPF says the crisis has already begun to shift pressure to the public health system, which they say is underfunded and dependent on volunteer doctors to fill gaps.
Hoffmann says the withdrawal of private practitioners from Psemas could leave approximately 300 000 civil servants and their dependants without access to affordable private healthcare.
Of particular concern is mental health, which the NPPF says is on the brink of a crisis.
“Suicide, domestic violence and sexual assault cases are rising, pointing to a failing mental health support system. Psemas’ collapse would remove a critical safety net for thousands,” Hoffmann says.
‘RAMPANT FRAUD’
The forum also points to weak oversight and rampant fraud within the scheme. An estimated N$900 million is lost to fraud and mismanagement annually, while ghost beneficiaries continue to drain resources.
Between 2020 and 2022, over N$1 billion was reportedly paid out to non-existent beneficiaries. An audit by the Ministry of Finance in 2024 flagged 32 000 non-contributing individuals still receiving benefits.
Despite repeated calls since 2013, no medical control board has been established to regulate the scheme or hold administrators accountable.
The forum is now calling for the urgent activation of the Financial Institutions and Markets Act, passed in 2021, which provides for penalties against fund administrators, paving the way for reform.
The NPPF is urging the government to replace the current paper-based claims system with a blockchain-based digital system backed by artificial intelligence-driven fraud detection tools.
“Namibia is falling behind. Other countries, like Botswana and South Africa, have taken proactive steps to protect their public health schemes. Government Employees Medical Scheme in South Africa pays market-related rates and maintains strong reserve ratios. In contrast, Psemas remains stuck in the past,” Hoffmann says.
The forum warns that unless a medical control board is created, outdated benefit structures removed, and systemic data anomalies addressed, efforts to restore Psemas will remain futile.
“These reforms are not optional, they are urgent. Without them, we will lose a system that, if fixed, could serve the nation well,” Hoffmann says.
