Mess at fund: Let’s not feed the ogre any longer

National Hospital Insurance Fund card. [Elvis Ogina,Standard]
Last week, nominated Health Cabinet Secretary Mutahi Kagwe stood before the vetting committee in parliament, looking idea-and-combat ready.

“Those earning more ought to pay more towards (NHIF) insurance,” he told the panel, before adding niceties about health schemes such as the Universal Health Care (UHC) that is part of the Big Four Agenda meant to define the legacy of President Uhuru Kenyatta.

Yet like a perplexing puzzle, bewildering questions such as ‘if NHIF had over Sh7 billion in reserve for crises, why is it only just over Sh2 billion now, in 2020?’

If you carry this niggling jigsaw to Mr Nicodemus Odongo’s office, the fund’s acting chief executive, he will refer you to the Auditor General’s reports of past years to find the missing piece of the equation.

SEE ALSO: Kakamega private hospital enrols over 300 in free NHIF treatment

There, you will discover facts like 20 per cent, or almost Sh9 billion of the Sh37 billion collected from poor workers end up in the pockets of the board and staff as ‘administrative costs’.

There was also a multi-million-shilling tender for an e-system, alongside AfyaCare cards, but after gobbling up millions of shillings, it is yet to be implemented.

Worse still is the Sh3.2 billion that last year flowed through NHIF-accredited facilities, yet now, it has been unearthed that over 1,700 of these are fake facilities, phantoms of the NHIF ‘clinic’ cesspool that sinks the hard earned Sh500 to Sh1,700 of the hardworking Kenyan, who imagines he is paying it for that rainy day when he, or a member of his family, falls ill.

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Then the current NHIF board has the temerity to cry crocodile tears about cash deficits by end of this year, unless more money is squeezed out of the poor worker and into their coffers.

At a press conference, NHIF board vice chair Roba Duba did, however, admit that the insurer was facing challenges. “We will reduce our administrative costs from 14 per cent to 10 per cent. There will be staff rationalisation, which will be in line with UHC goal. The board will purpose to realign staff based on their skills,” he said.

SEE ALSO: Curtain falls on another year of mega graft, financial scandals

Even as NHIF’s internal report, leaked and publicised, revealing that the so-called national insurer is paying out quadruple the premiums as compared to what it has, Duba was quick to insist that the document was compiled following the board’s decision as part of its mega plan for a turnaround.

Voluntary subscribers

“NHIF has become a formal conduit of theft,” says Ken Gachanja, an economist familiar with the local economies of health care, “and, if say, county claims start outstripping its revenue, then NHIF will go into the red soon, become a hollowed out shell, leaving workers in the lurch.”

He gives 2026 as the longest time till termination of this NHIF patient. It is this report that contained partly the recommendations to have voluntary subscribers, majority whom are poor Kenyans, pay upfront Sh6,000 before they can access cover, instead of the monthly Sh500.

This move meant thousands of poor Kenyans would be left out, and after an uproar, President Uhuru Kenyatta directed the board to suspend the directive, that was to take effect January 2020. While a letter had already been circulated to all regional managers, Duba still insisted that the directive was still at proposal level and would not have been implemented without consultation with stakeholders.

SEE ALSO: Poor Kenyans suffer as NHIF makes changes

He, however, went ahead to defend the directive, as based on financial grounds to sustain the fund. The fund also extended the waiting period for new subscribers to 90 days, from 60.

“What we are trying to do is make the fund sustainable and we were going to consult on the same. We have people who pay Sh1,000 and wait for 60 days, get treatment worth Sh1.5 million and then vanish, and discontinue payments,” noted Duba.

As of 2017/18 financial year, NHIF had 7.7 million subscribers and a catalogue of 10,820 hospitals. That year, NHIF had increased payout to beneficiaries from Sh26.4 billion to Sh37.2 billion.

Outgoing Health CS Sicily Kariuki did constitute a committee last year to look into how NHIF can be restructured for it to be in line with UHC.

Accredited facilities

SEE ALSO: NHIF becoming luxury? Kenyans fume over new regulations

A major consequence of the committee that included actuarial experts was decapitating NHIF of the responsibility to accrediting hospitals to its catalogue, which was argued was one of the avenues the insurer has lost funds.

The task now lies with the Kenya Medical Practitioners and Dentists Council and the Kenya Health Professions Oversight Authority.

“As NHIF we just receive the list of the accredited facilities,” said Duba.

Unlike other insurers who are under the Insurance Regulatory Agency (IRA), NHIF is an unregulated ‘national’ insurer, hence both its monetary profligacy and accountability. Perhaps the only salvation is to take away its insurance role and let other health care players with national reach and proficiency and experience handle that side of business.

“I know there are some people who have reached out to IRA saying we should not insure public servants. But let me tell you, our premiums are way affordable, compared to private insurers who charge up to three times,” argued Duba. “The police tried it, and after a year, they were back.”

Duba has been speaking vigorously to TV cameras about ‘cartels,’ yet this is like attacking a mirror image of oneself, because NHIF is the health cartel.

He has mentioned doctors, private hospitals, private insurers, and some rogue NHIF workers as part of the cartel team. “There was also a case with a hospital in Nairobi where the facility submitted a claim of Sh1.1 billion, but after audit we found the actual amount should be Sh800 million,” he said.

He noted that the culture was rampant in private hospitals. In 2019, NHIF suspended 80 facilities for doctoring claims as it revealed fake surgeries as one of the major schemes used by hospitals to fraud the insurer.

It is suspected that NHIF might have lost up to Sh10 billion through these fake medical claims and deals. The incoming health CS, Mr Kagwe, should not bow to pressure by the NHIF board.

That is like listening to an ogre that suggests you increase birth rate, then fatten your children for it to eat.  

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