Big trouble for Mamoth

“Our financial situation is greatly strained having lost about 62% of our revenue to date and continue to lose membership which leads to a further deterioration of our top-line,” Motseko said in the letter.

“Having lost a significant amount of our revenue in the last financial year, we are not able to meet some of our financial obligations, your salaries included,” he said.

“Since the beginning of 2023 we had been tasked by our Board of Directors to source alternative sources of funding which unfortunately did not come in time, or at all for us to retain the business that we all love.”

He said they had hoped that by now their situation would be different “but to date there is no solid alternative that appears to yield positive results for us”.

He said they had indicated that they would try all in their power to ensure that they would keep the jobs “but this alternative seems far-fetched and not feasible”.

“As a result, we have contemplated a possible employee retrenchment or layoff until the business stabilises,” he said, adding that detailed and further consultations would be made with the staff “to arrive at a more positive amicable solution”.

He said the decision the company will take “is not made with bad intentions but to protect the interests of the business and ensure we secure those jobs that we can”.

Motseko also told the staff that there would be no salary adjustment this year.

But in an interview with thepost Motseko and board chairman, Retšelisitsoe Theko, refused to describe the precarious situation as “a financial crisis”.

They preferred to call it a “phase of challenges” instead.

Motseko and Theko blamed the company’s woes on the huge medical claims incurred during the Covid-19 pandemic.

Theko said as the pandemic gripped some service providers cut their payment period from 90 to 30 days, which created serious cashflow problems for the company.

“During Covid, our claims experience (was) out of this world,” Theko said.

“Our claims shot up.”

Theko was reluctant to say how much was claimed during the pandemic.

Theko and Motseko however denied that they had decided to retrench workers because of a financial crisis.

“We shall keep on saying we don’t have a financial crisis but we do have challenges,” Motseko said.

He said his letter to staff did not explicitly say the company had decided to retrench but “it is one of the possibilities as a last resort”.

“We are looking at all the options open to us.”

“This is an exercise that you do anyway at any point in time, where you are saying, okay, what is the health of my situation right now? And therefore, what are the options that are open to me?”

“When you look at cutting costs, you look at everything.”

“It’s a question of how you interpret the letter”.

“The message I wanted to put across was that, generally, an abnormal situation (is) here. And I did mention in the letter that this is a possibility if things don’t improve.”

Motseko said the “challenges don’t go away overnight!”.

“You work on them.”

He insisted that the company remains stable and able to meet its obligations.

To prove that all was still well, Motseko showed thepost a recent WhatsApp message from a client expressing her gratitude to Mamoth for paying for her surgery in South Africa.

“We have had these challenges before and are dealing with them,” Motseko said.

Regarding the exodus of clients, Theko said in the health industry it is normal for clients to change medical aid providers.

“As we speak now there are some who have expressed an intention to come back,” he said.

Theko said another thing that has affected medical aid schemes in the country is fraud perpetrated by medical doctors and their companies.

“This has caused serious cash erosion from the schemes,” he said.

Theko said the doctors deliberately avoid the usual online billing system that is used in the region by opting for manual records of their patients.

He said they make patients fill out forms and the doctors later add drugs and medical treatments they never provided to patients.

He said a patient would have consulted the doctor for a minor ailment requiring inexpensive pills but the claim will include expensive medication that was not prescribed.

He also said most of these doctors work in other surgeries in South Africa where medical treatments are quite expensive and they unnecessarily transfer patients to such ones so they can claim hefty amounts from the schemes.

Other doctors, he said, admit patients in their hospitals knowing well that they need specialised treatment and when they are about to die they transfer them to specialists, after milking the schemes a lot of money.

“Some hospitals in South Africa even said to us we should tell our Lesotho doctors to stop transferring already dead patients to them,” Theko said.

“They said, ours is just to confirm them dead, and then they are taken back to their country,” he said.

He however said medical aid companies need financial muscle to deal with such fraud.

Caswell Tlali