MAKODINGO: National Health Insurance Fund reforms are long overdue

For a very long time, the government has struggled with Universal Health Coverage

In Summary
  • Several attempts have been made by the government towards achieving universal health coverage.
  • The most serious of those attempts being the proposed reform to NHIF in 2005 which failed due to lack of funds.
Makodingo Washington
Makodingo Washington
Image: FILE

“The best of Kenya’s African social heritage and colonial economic legacy must be reorganized and mobilized for a concerted, carefully planned attack on poverty, disease and the lack of education to achieve social justice, human dignity and economic welfare for all.” – Sessional Paper No 10 of 1965 (Government of Kenya).

At independence, Kenya identified the three ‘enemies’ of Ujinga, Ugonjwa na Umaskini (illiteracy, disease and poverty) yet, 60 years after independence, a majority of Kenyans are still struggling with those three - poverty, poor health and ignorance.

Whereas we have made significant strides towards addressing ignorance (adult literacy rate is over 82 per cent with nearly 100 per cent literacy among those below 15), we have a long way to go to address both poverty and poor health.

For a very long time, the government has struggled with Universal Health Coverage with every administration making it an agenda given that the cost of healthcare is unaffordable to most Kenyans.

According to the Kenya National Health Accounts, public, private and donor expenditures accounted for about 37 per cent, 40 per cent and 23 per cent respectively of Total Health Expenditure which was Sh346 billion in the financial year (FY) 2015/16.

The Kenya Household Health Expenditure and Utilisation Survey (KHHEUS) of 2018 shows that out-of-pocket expenditure was at 32 per cent and the incidence of catastrophic health expenditure was estimated to be 4.9 per cent.

Several attempts have been made by the government towards achieving universal health coverage, with the most serious of those attempts being the proposed reform to NHIF in 2005 which failed due to lack of funds.

President Ruto’s administration is making its attempt at Universal Health Coverage with the proposed Health Sector Bills now undergoing debate in Parliament.

According to the Bills, Universal Health Coverage means that all individuals and communities receive the health services they need including the full spectrum of essential, quality health services from health promotion to prevention, treatment, rehabilitation, and palliative care without suffering financial hardship.

There are four important changes that the Social Health Insurance Fund Bill proposes.

First, the scheme will be mandatory for all Kenyan households (unlike NHIF which was only mandatory for salaried Kenyans with the rest joining voluntarily).

Secondly, the contribution is based on households and covers all dependents, spouses and their children below the age of 21 years and up to 25 years for those still in school.

It also covers unemployed persons with disabilities that depend on the contributor.

Thirdly, the Social Health Insurance Fund is required to not spend more than 5 per cent of its annual expenditure on administrative expenses. This was not in the previous Act.

NHIF has been routinely accused of spending too much money on administrative expenses.

For example, the Audited Accounts of NHIF for the Year ending June 2019 show that the Fund collected Sh58 billion and spent Sh7.5 billion on administrative costs, representing 13 per cent of the revenues of the fund.

For a scheme with slightly more than 9 million members, this trend is unsustainable especially when it becomes mandatory as those costs are probably going to double.

Finally, for the first time, there will be a fund dedicated to Emergency Treatment which is a Constitutional right under Article 43.

This is probably one of the most important proposals in this Bill. We have all heard stories of people known to us getting emergencies and not being able to afford care leading to death.

Despite being a right, most if not all private health facilities will turn away an emergency patient for lack of money for admission.

Private facilities on the other hand have a valid reason to turn patients away because they are not charitable organizations as the government has not had the resources to reimburse those costs.

This Bill solves that problem by creating the Emergency and Critical Illness Fund.

Today, most people with chronic illnesses either do not know they have them (health-seeking behaviour is still poor and is mostly driven by lack of resources), or they cannot afford the multiple drugs they need, often for a lifetime.

Even the middle class faces this problem. Getting a fund that caters for Chronic Illness once the normal cover is exhausted will go a long way in improving the quality of life of those with chronic illnesses like heart disease and cancer.

One of the major concerns Kenyans have expressed with the proposed changes to NHIF is the issue of costs with many believing the numerous funds proposed by the Bill will occasion an additional contribution to already overburdened Kenyans.

However, when one reads the Bills, there does not seem to be any additional contributions beyond those already being paid to NHIF.

The overhaul of NHIF will lead to the creation of three different funds to replace it.

The three are The Primary Healthcare Fund whose object shall be to purchase primary healthcare services from health facilities which will be funded by the exchequer; the Emergency, Chronic and Critical Illness Fund to defray the costs of management of chronic illnesses after depletion of the social health insurance cover and to cover the costs of emergency treatment.

It will be funded by the exchequer through our taxes. And lastly, the Social Health Insurance Fund is the fund to which contributions (already being covered by NHIF) will be made.

One interesting proposal in the Bill requires NHIF to be wound up with all its employees terminated by the end of one year.

The employees could then apply for the positions advertised by the new board and may be employed if found suitable.

Whereas a change in NHIF management is long overdue, the blanket termination of all employees cannot possibly go well with workers and human rights defenders.

In my opinion, provision should be made for vetting of the employees over six months within which suitability will either be established (and retained) or employees found unsuitable, released or redeployed.

There cannot be a justification for starting afresh for an institution that works every day with decades of institutional memory.

This is what we did when we needed to reform the Judiciary once we promulgated the new Constitution in 2010. Hopefully, Parliament will amend this clause.

Another clause Parliament should reconsider is Clause 5 of the Schedule on Transitional Provisions. It says that the Fund shall not provide enhanced benefits, schemes and packages (except those currently covered by NHIF).

However, the Bill is silent on when, if at all, contributors will start benefiting from these enhanced benefits given that the contribution is mandatory.

This is a laudable attempt to give Universal Health Coverage that Parliament should expedite.

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