NHIF board calls crisis meeting as members cry foul over directive

Health Cabinet Secretary Cleophas Mailu. (Photo: Jenipher Wachie/Standard)

NHIF’s board has called a crisis meeting tomorrow on the controversial decision on member benefits that some board members have disowned.

This comes amid a soaring public outcry about plans to cap outpatient visit to four in a whole year, even as it emerges that NHIF spends less than half of its collections to settle medical bills.

Latest estimates indicate the insurer’s annual collections stand at Sh36 billion, raising questions why the public insurer would cap the benefits while forcing members to pay from their pockets despite being covered.

Of concern is why NHIF came up with that controversial plan in the first place and why the government moved to suspend it that quickly. The Ministry of Health is represented at the NHIF board and it is unlikely the insurer can make such a huge decision without informing the State.

Public interest

Yesterday, Health Cabinet Secretary Cleophas Mailu told the Sunday Standard that the Government is addressing the matter. “I don’t think it is an issue of whether I sit on the board. If you have any other information pass it to me unless you want to say my cancellation was not of public interest,” he said.

Dr Mailu said the decision was arrived at following failure by NHIF management to consult with the board and other stakeholders including service providers.

“We have a responsibility to hear people’s complains. NHIF has to consult and explain to its members,” said Mailu.

“I am the custodian of government policy on matters health. The decision by NHIF is a matter of policy and which the ministry is in charge,” he added, promissing to issue a comprehensive statement later.

Kenya National Union of Teachers (Knut) Chair Mudzo Nzili who is also acting chair at NHIF confirmed to Sunday Standard that he will lead tomorrow’s meeting. He however declined to comment on the bizzare developments at the insurer.

“I am chairing the Monday meeting to look into the issue so I cannot state my position before then,” said Nzili.

Nzili, who is also the alternate representative to Knut Secretary General Wilson Sossion, appeared to be speaking from a different mouth from the nominated ODM legislator on the matter. Sossion expressed his shock that the medical insurer would rush to cap benefits soon after raising member contributions to as much as Sh1,700 a month.

“The purpose of raising the rates was to ensure there is unlimited access to patients,” said Sossion on behalf of the Trade Union Congress (TUC).

Cotu Secretary General Francis Atwoli and Federation of Kenya Employers CEO Jacqueline Mugo echoed Dr Mailu’s decision and pledged to hold further consultations before they make their stand.

“As workers we were not consulted on the decision to limit the number of outpatient’s visits to only four per year,” said Atwoli. His organisation represents workers on the NHIF board.

“The CEO is supposed to agree first with stakeholders. In fact, we are meeting next week to discuss the matter before any statement can be issued.”

Limited visits

The employers too complained they had not been consulted on the matter.

“This comes as news to us,” said Mrs Mugo who is currently out of the country.

On November 3, NHIF released new guidelines that have significantly reduced contributors’ benefits for outpatient treatment at authorised clinics.

The decision limited contributors to only four outpatient visits per year, leaving them to the pain of out-of-pocket spending whenever they fall sick.

Since the new policy was rolled out on Wednesday, thousands of Kenyans who felt cheated have been complaining on social media. This is because the inclusion of outpatient care was central in raising the monthly premiums paid by up to five-fold.

In the applicable schedule that took effect in April 2015, members now contribute between Sh150 and Sh1,700 on a graduated scale – from a flat rate of Sh320 previously.

“It is immoral to reduce benefits while raising premiums,” said Sossion.

Latest available financial reports indicate that NHIF spends about half of the collected premiums to settle hospital claims with the public insurer increasingly booking huge surpluses.

In 2015 for instance, the insurer collected Sh12.8 billion and paid out Sh5.9 billion. However, administrative expenses almost matched the medical bills paid with the insurer paying an average of Sh145,000 a month to its employees. At the same time surplus earnings topped nearly Sh2.7 billion, growing 38 per cent over the previous year. After the changes of April 2015 pegging members’ to contributions to their salaries, annual collections are estimated to have hit Sh36 billion – or Sh3 billion a month.

An audit of the 2016 financial year was submitted to Parliament last week where Auditor General gave a qualified opinion meaning there was insufficient explanation on at least one question.

A persistent question that has remained unanswered over the years is how the construction cost of a parking silo owned by NHIF had jumped four-fold to Sh3.4 billion. Further, the insurer has billions worth of deposits made in questionable transactions, made to banks that have since collapsed and might never be recovered.

 Outpatient care was unveiled in mid-2016 and proved to be an instant success, especially among the poorer households in the society. Visits were unlimited through the cost per visit was capped, and members would only access medical from a select list of facilities.

 Controversy is still brewing on why the government in 2016 removed its police and prison officers from the NHIF scheme to a private insurer only to return them back after just a year. A consortium of three insurers AAR, Jubilee and UAP was to jointly provide the teachers and police health cover in a three year deal.

 It was a complex deal in which AON was to act as an intermediary between the insurers and beneficiaries.  AON-Minet then contracted Bliss GVS Healthcare Limited which in turn entered into a contract with several health facilities across the country but after a year, the insurer pulled the plug.

 Why AON pulled out still remains an unanswered question but there were claims of fraud and fake claims. This is also suspected to be the same reason why NHIF decided to introduce limits.

 “Let members who are genuine use biometric identification that is the only way they can cut down costs,” said Sossion.

 For a long time NHIF has been dogged with claims of fraud and allegations of being used by successive regimes as a cash cow. Just last month the fund’s former CEO Richard Kerich was acquited of conspiracy and abuse of office charges in relation to a Sh96 million scandal involving Clinix Healthcare Limited.

 While Wednesday’s amends allowed beneficiaries to access any medical facility, the capping of visits caused national outrage.