UNSUSTAINABLE

Private hospitals driving NHIF to the grave, warn MPs

'The fund will collapse this year if it is not restructured'

In Summary

• The fund is already running deficits, having paid 80 per cent of the money it receives from contributors to private hospitals.

• Health Committee chair Sabina Chege said they will ensure the fund pays equal amounts to both private and public hospitals.

 

Health Cabinet Secretary Sicily Kariuki and National Assembly Health committee chairperson Sabina Chege when the CS briefed MPs and Senators on the new UHC package in Nairobi last year.
Health Cabinet Secretary Sicily Kariuki and National Assembly Health committee chairperson Sabina Chege when the CS briefed MPs and Senators on the new UHC package in Nairobi last year.

Private hospitals are likely to drive the National Hospital Insurance Fund to its death this year, the National Assembly Committee on Health has said.

The fund, members said, is already running deficits, having paid 80 per cent of the money it receives from contributors to private hospitals.

The MPs feared that the fund will collapse this year if it is not restructured. 

 

"Unless you come up with reforms, NHIF is collapsing," Tongaren MP David Eseli said, adding: "Some reforms can be painful. We need to bite the bullet."

Eseli spoke during a meeting with the NHIF management on Tuesday. 

Health Committee chair Sabina Chege said they will whittle down the influence of private facilities and ensure the fund pays equal amounts to both private and public hospitals.

"Maybe this increase (in payouts) is as a result of fraud by private facilities," Sabina said. 

The committee questioned the managers on the recent proposed punitive changes to the Sh500 minimum monthly contribution scheme, which were stopped by President Uhuru Kenyatta last month. 

The board, represented by lawyer Hannah Muriithi, acting CEO Nicodemus Odongo, and Health Principal Secretary Susan Mochache defended the proposals but said they were published by mistake. 

Mochache said NHIF as currently constituted is not sustainable. 

 

"NHIF premiums contributions have increased three-fold while benefits have increased five-fold, meaning that benefits payouts have outpaced growth in premiums," Mochache said. 

"This implies that all factors held constant, NHIF sustainability is very compromised and with the current trends of revenue and expenditures, NHIF is likely to start running deficits from the year 2020."

An NHIF reforms panel appointed by Health CS Sicily Kariuki last year also noted that private healthcare providers were milking the fund dry.

"Private providers are the main beneficiaries of NHIF payments, receiving over 80 per cent of all claims payouts," they said in their report last year. They explained that private providers had arm-twisted the fund to increase reimbursement rates. 

A separate analysis of the report by panel member Edwine Barasa noted that private providers have outsize influence in the NHIF management board.

"Their influence on the insurer with regard to reimbursement rates represents what we will call here purchaser capture, a situation in which the actions of a purchaser are influenced by, and in favour of, healthcare providers," he said.

Yesterday, Mochache said they contracted an independent actuary – Kenbright Actuarial and Financial Services –  to carry out an analysis of the fund. The actuary returned a similarly damning report.

Last year,  Gilbert Osoro, the manager in charge of benefits and contracting at NHIF, said they were investigating about 80 health facilities countrywide for claims fraud.

 The majority of the fraud cases involved overstating claims, manipulation of documents of non-existing hospitals and pharmacies, or a cover-up and non- disclosure of medical facts at the proposal stage.

In 2018,  the Ethics and Anti-Corruption Commission revealed that private providers bill patients with insurance cards up to 50 times more than those paying in cash for the same procedures.

Former EACC Chief Executive Officer Halakhe Waqo said an insurance cardholder can pay as much as Sh35,000 for removal of a nasal pack yet the same services typically cost a cash-paying patient Sh700.