County public hospitals are fleecing insurance firms by overcharging insured patients for treatment, lab work and medicine, an anti-graft audit has revealed.
The Ethics and Anti-Corruption Commission report released on Friday about Health ministry systems discloses that patients with insurance cover pay more, sometimes far more, than patients paying in cash.
"I don't know why it is so much more expensive for insurance cover than cash. This is corruption and we should not be subjected to healthcare that is so expensive," EACC chairman Eliud Wabukala said during release of the report in Nairobi.
He called pricing of medical products "very mysterious" and called for transparency and comparative analysis countrywide before fixing prices for medicines and services.
"Panadol costing Sh10 for a headache in Nairobi should not be sold in Lodwar for Sh400,” EACC chief executive officer Halakhe Waqo said.
The 40-page report examined systems, policies, procedures and practices in pricing of pharmaceutical and non-pharmaceutical supplies in the public health sector.
The audit carried out in six counties, for instance, shows that patients with insurance cover, including NHIF, are paying Sh90,000 for caesarean sections. Those paying cash pay Sh20,000.
The audit was commissioned in March last year and it surveyed Nairobi, Nakuru, Kisumu, Nyeri, Embu and Mombasa counties.
The report shows that patients seeking nasal pack removal have been paying Sh700 in cash but National Health Insurance Fund card holders pay Sh35,000. Removal of stitches costs Sh100 in cash, but Sh500 when insurance pays.
A radical neck post-mortem costs Sh111,000 for insurance holders but Sh76,500 for cash payment. A cystectomy (surgery to remove all or some urinary bladder parts) costs Sh7,500 cash but Sh90,000 through insurance.
The report points out huge price differences in medicine prices at health facilities across counties, compared to payments made at the Kenya Medical Supplies Authority for medicines.
High costs for treatment and medicine violate the Health ministry’s price control standards.
“Large variances in prices occasioned by adoption of different means of payment for services may lead to perceived inequality in pricing medicine and medical supplies,” reads the report.
Wabukala and Wako were joined by Health Cabinet Secretary Sicily Kariuki, her PS Peter Tum, the ministry’s Chief Administrative Secretary Rashid Aman and the EACC's deputy secretary Michael Mubea.
Glaring variations in medicine prices, far beyond the purchase price at Kemsa, were cited at Coast County, Embu and Nakuru referral hospitals and Mama Lucy hospital.
For instance, 500mg ulcers tablet costing Sh840 at Kemsa are sold at Sh1,300 at Coast County Referral Hospital and Sh2,400 at Nakuru Referral Hospital. The 5ml anti-rabies vaccine bought at Sh966 costs Sh1,350 at Coast County Referral, while Embu Referral charges only Sh200.
Anti-venom for snakebites costs Sh4,500 at Kemsa, the same at Coast County Referral but only Sh1,000 at Embu Referral and Sh500 at Nakuru Referral hospital.
The 1mg/1ml adrenaline injection to prevent ulcers costs Sh7 at Kemsa but is sold for Sh18.62 at Coast County Referral, Sh30 at Embu Referral, Sh100 at Nakuru Referral and Sh50 at Mama Lucy hospital.
"The variances were attributed to health facilities applying different mark-ups ranging from 10-30 per cent on the purchase price of medicine and medical supplies," reads the report.
The EACC team that carried out the audit was told by one unnamed county health facility that the 30 per cent was arrived at after considering the amount of waivers granted to poor patients who could not pay hospital bills.
"The waivers in that facility amounted to an average of Sh10,000 per month. The variances in prices is a weakness that may lead to perceived inequality in pricing medicine and medicinal supplies, leading to patients' preference for some health facilities over others," warns the report.
The EACC chief executive officer said a robust system in the Health sector is required to curb overpricing of medicines and medical services in counties.
Wako said order in price controls for medical products and services can only be restored by establishing standards to provide guidelines in health systems at both the national and county levels.
“It is very unethical to overprice health services from Sh700 to Sh35,000. I don’t know what we can call this range because it is not profit. We should find a way of changing this,” Waqo said.
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Health CS Kariuki said, however, that the existing National Pharmaceutical Policy to ensure order in the sector recognises problems in pricing, such as high prices denying patients access.
Other problems include lack of systematic information on medicine prices, their components and trends, inappropriate use of trade policies and high cash spending on medical care, with medicine taking the lion's share of the budget.
"The government will monitor and negotiate prices of key essential medicines, rationalise the pricing system in all sectors and promote the use of generics in addressing the challenges of high prices and low affordability of medicines," Kariuki said.
The Cabinet Secretary called the EACC audit report "timely". She said she had already set up a team to inquire into numerous challenges in the ministry making medical services so expensive that they threaten President Uhuru Kenyatta's Big Four, which includes universal healthcare.
"Only two months ago, I put up a team of experts and the inquiry is now at the tail-end. It is completely unacceptable for Kenyans to be exposed to high costs and variations of pharmaceutical products and services. Kenyans deserve better. We cannot sit in our offices and come up with prices as we want," she said.
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The EACC audit puts the Health ministry on the spot for not maintaining a national list of registered non-pharmaceutical supplies and accredited suppliers, failure to undertake timely periodic reviews of lists of essential medicines and failure to constitute and operationalise Medicine and Therapeutic Committees.
"Lack of a list of of non-pharmaceutical supplies approved for sale in the market is a loophole that may lead to procuring items that are not safe and effective. This may led to increased cost due to restocking at the health facilities," EACC warns.
Kariuki said health governance systems in counties have collapsed, leading to variations in healthcare pricing and the audit report reinforces the need to review the systems.
She said her ministry, the Pharmacy and Poisons Board, the National Quality Control Laboratory and Kemsa will conduct a Rapid Results Initiative (RRI) "in the next 100 days" to determine the quality of health products and equipment Kenyans are using.
The RRI will target health products and technologies with high public health impact and those widely used in the public facilities.
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