NHIF board admits cash crisis, blames it on rip-off

New NHIF Board members distance themselves from the rot, say problems date back to as early as 2012.

In Summary

• Board vice chairman Roba Duba says they are fighting to clear the mess.

• They seek to cut the fund’s administrative expenses from the current 14 per cent to less than 10 per cent.

NHIF headquarters.
NHIF headquarters.
Image: FILE

The board of the National Hospital Insurance Fund has admitted the fund is already cash-strapped.

It blamed this on excessive payouts to private hospitals. The board, which was appointed last year, distanced itself from the rot, which it says dates back to as early as 2012.

Board vice chairman Roba Duba said they are fighting to clear the mess and will scrap unreasonable reimbursement rates to private hospitals and cut the fund’s administrative expenses from the current 14 per cent to less than 10 per cent.


"Previous benefit packages were not based on any actuarial estimates, but currently, all benefits are based on an actuarial determination," he said.

Duba said 1,700 rogue health facilities have been delisted by the fund in the latest revision of service providers.

"Subsequently, revised valid contracts for all providers in the 2018-21 contracting cycle have been issued to the healthcare providers," he said.

Duba, who did not give the amount the fund has lost to medical fraud, said it is so widespread that one facility in Nairobi West had claimed reimbursement for a patient who allegedly underwent 167 surgeries in one year. "Another facility made claims for Sh1.9 billion, but we found only Sh800 million was valid," he said.

Duba was accompanied by other board members, including the Kenya Medical Association president, Dr Jacqueline Kitulu.

They said they were fighting back because they were being accused of presiding over rot at the fund. Instead, Duba said they were part of the reforms panel appointed by Health CS Sicily Kariuki, which recommended drastic reforms.

“These are the reforms that we are now implementing, but the beneficiaries of past corruption are fighting back,” he said.

Duba accused some staff members of abetting misuse of funds and colluding with private doctors to rip off the fund. He did not name names.

He said they have cut down on administrative expenditure from Sh6.4 billion to Sh5.3 billion, a reduction of Sh1.1 billion. This includes cutting bank charges and commissions from Sh315 million in the 2007-18 financial year to Sh45 million in 2019-20.

“Some of the charges were incurred by moving money from one NHIF account to another within the same bank,” he said.

Advertising and publicity have also suffered budget cuts from Sh753 million in 2017-18 to Sh100 million in the current financial year 2019-20. Travel and accommodation expenses were cut from Sh312 million to Sh290 million in 2019-20.

The vice chairperson alleged that current staff members involved in corruption are connected to past managers sacked from the fund.

“The NHIF board of management has been working closely with the Directorate of Criminal Investigations to ensure the culprits are brought to book,” he said.

The health reforms panel presented its findings to Health Cabinet Secretary Sicily Kariuki in October last year. The CS said the fund should prepare for a radical reform ahead of the national rollout of the Universal Health Coverage.

The World Bank has given technical assistance of nearly Sh40 billion for the UHC but has demanded NHIF be restructured because it will lead the UHC process.