KILONZO JR: Truth state conceals in leased medical equipment

Chief of Staff Nzioka Waita. / FILE
Chief of Staff Nzioka Waita. / FILE

My attention was drawn to an opinion piece by Chief of Staff Nzioka Waita that appeared on various dates in various publications headlined, ‘The ‘other truth’ about leased medical equipment’.

Waita seeks to address the ‘raging debate about the cost-effectiveness of the… modern equipment’.

While acknowledging the article and the debate are healthy, Waita nevertheless asserts the need to nourish with facts, and immunise from distortions and obfuscation of truth, discussion around the Managed Equipment Scheme. I have no quarrel with the intellectual discourse on the purpose of the equipment, but his belated explanation should raise eyebrows.

MES was initiated in 2014 and it refers to flexible, long-term contractual arrangements that involve outsourcing the provision of specialised, modern medical technology and equipment to the private sector. The term of the MES contract is seven years with a high likelihood of an extension.

Under the stewardship of the Ministry of Health five contracts worth S48 billion were signed with foreign firms on February 5, 2015. Further variations were signed on May 6, 2015 at Sh37.1 billion. Under the original contracts, 96 level 4 hospitals countrywide were earmarked to benefit from a range of modern specialised equipment, including theatre, central sterilisation services, renal and radiology equipment.

SCOPE OF SERVICES

The services were to include fitting out works, replacement of old infrastructure, furnishings and fittings; supply, installation, testing, commissioning and decommissioning of the equipment; training of staff and reporting.

Further, as per the original agreement, recurrent costs such as the supply of consumables and reagents and equipment maintenance were to be covered at no additional cost to the counties.

Despite several accountability and transparency issues raised, county governments were purportedly caused to sign MoUs in circumstances that are still shrouded in mystery. Only the former governor of Bomet held his ground. The Senate has not been spared either. The details of the project remain scarce

and all efforts to get information and records has been resisted for reasons best known to the key players.

In the memoranda, counties were required to pay Sh5 million per annum for the project, which was to be deducted directly from their sharable revenue allocation and paid to private suppliers by the National Treasury. This flat rate figure was applied across all the counties, despite the fact that they did not receive the same equipment. To make matters worse, the MoUs had a clause that provided for future unilateral variations to the MES contract at the expense of the counties!

In the 2018-19 financial year, an additional 21 hospitals were included in the MES programme following a further variation of the initial sum of Sh4.5 to Sh9.4 billion. This brings the number of hospitals slated to benefit to 115. The latest variation now compels counties to part with Sh200 million each, up from Sh95 million in previous financial years. The flat rate was applied across all counties leaving more queries.

The Senate approved a negotiated Sh314 billion as shareable revenue, which was backed by the Inter-Governmental Budget and Economic Council. In the current controversial amendment to the Finance Act, Sh9.4 billion reduced from the sharable revenue leaving a baseline of 304 billion or thereabouts. This deduction together with the new MES figures will directly affect the development budget to all counties.

ALLOCATION BY HEALTH MINISTRY

In support of this project, the budgetary allocation has progressively increased every year from Sh2.8 billion in 2014-15 to the current Sh9.4 billion. The ministry has attributed the bloating budgetary allocations to various reasons, none of which unfortunately, can stand the test of time. The explanations for the increased costs are at best vague at worst, an insult to the intelligence of Kenyans.

So what has the cumulative Sh32.1 billion, counties have paid so far under this project brought to them?

As reported by the Ministry of Health in a statement

submitted to the Senate in September last year — four years after the launch of the programme — MES equipment services remain unused in some facilities.

Notably, renal equipment are in use in 44 out of the 49 earmarked facilities. Counties in which this equipment are unused are Lamu, Mandera, Tana River, Wajir and West Pokot. This has been attributed to lack of requisite staff and inadequate water and electricity, among others.

Theatre equipment are unused in Busia, Elgeyo Marakwet, Samburu and West Pokot for the same reasons.

Radiology equipment has been installed in 97 out of the 98 facilities earmarked. However, of these,

20 counties cannot offer the services due to lack of requisite staff and insufficient water and electricity. These counties are Bomet, Busia, Elgeyo Marakwet, Isiolo, Kakamega, Vihiga, Kitui, Kwale, Makueni, Meru, Migori, Narok, Nyamira, Samburu, Siaya, Tana River, Tharaka Nithi, Trans Nzoia, Turkana and West Pokot.

With the exception of ICU and CSSD services, various equipment are not in use in at least half of the counties.

Of the actions the Ministry says it has taken, most involve discussions with the affected counties to employ the required staff, provide water and upgrade power. But even where equipment is in use, there is little justification for the huge expenditure for this project: A cursory glance at the MES Equipment Allocation schedule provided by the Ministry reveals the supply of such basic equipment as trolleys, stretchers, drip stands, spot lights, baby cots amongst others. Why are we leasing such items at such a high cost? This is what Waita fails to address.

More importantly, given the fact that various equipment installed under the project remain unused in at least half of the counties, were the affected counties still compelled to pay for it?

QUESTIONS AND CONCERNS

If indeed the MES

was a joint venture as Waita’s e claims, what existing inter-governmental structures were used for consultation, coordination and cooperation?

Moreover, the MoUs do not even contain details of the contract terms between the MoH and the private sector companies!

Was a needs assessment/feasibility study ever conducted prior to launching the project? If such assessment was undertaken, was it shared with and confirmed by counties which came into being in 2013? And does each equipment installed correspond to the actual and specific needs of the counties?

Is there a status report of deployment of these equipment to each county with documentation of receipt and inventory controls as required by law?

Was a schedule of all the equipment to be received shared with the counties?

These are not idle concerns.

For one, the article presents no facts that the MES addressed actual county needs. That is to say, he presents no quantifiable data on the utilisation of the equipment. The data he produces merely relates to input indicators eg 49 hospitals offering dialysis. Where is the data demonstrating utilisation and the links between the MES leased equipment and actual needs?

Which brings us to the question, has the MES scheme been cost-effective?

This requires consideration of the alternative uses of a particular set of resources to achieve a certain and specified goal. The comparisons of cost-effectiveness should not merely end on ‘buy versus lease’ arguments, but rather on whether the options chosen address other concerns such as equity of access and equity of outcomes.

On subsidised services under the MES, I dare say that the subsidised

costs are meaningless as they still impose a financial burden on the patients utilising

these services. Perhaps, it makes more sense for the funds deducted from counties to be invested in providing financial risk protection (e.g. through insurance subsidies) that would then support access to kidney transplant services.

On training and skills transfer,

Waita says over 750 health professionals have undergone extensive training under the programme. He asserts that the acquired expertise will outlive the MES to gift the country with a critical mass of professionals who can be relied on to apprentice others. Staff mobility such as transfers, in counties such as Tharaka Nithi, has affected use of equipment.

Well, evidence shows training is an insufficient guarantee to quality as knowledge decay often renders trainings meaningless when it comes to quality of care. While training and skills transfer are important and necessary, it should not merely end there. The ministry ought to develop clinical guidelines and design audit and supportive supervision tools against those guidelines.

As mentioned, these programme is likely to be extended. We are already in the fourth year. What is the possible outcome at the lapse of the seven year period in 2021? Will the extension clause for another three years be activated? Will the government acquire the equipment? At whose cost? Or will the contractors pack up and take away their equipment?

At an estimated conservative cost of Sh50 billion to counties by end of that period,

Kenya will be interested to know how the final Chapter of this controversy will be written.