Why debate on NHIF rates isn’t addressing the real issues

The debate surrounding the new National Hospital Insurance Fund (NHIF) rates has pitted the State corporation against trade unions and private health providers.

The fund, established nearly 50 years ago, is one of the State entities, aside from the National Social Security Fund (NSSF), that has managed to ignite very strong emotions among workers.

However, the contentious issues in this latest debate over NHIF increasing monthly contributions have tended to be muddled by hardcore trade union politics and the fund’s opaqueness.

The issues are largely representational and operational. Trade union leaders only appear keen to be included in NHIF’s management, while for the fund, it seems ‘obscurity’ is its operational code and it is hard to figure out how it is administered.

In the absence of verified public audited accounts, people can only speculate on its financial history, which has stoked fires and rubbished otherwise sober ideas from the fund.

Yet, considering NHIF had been operating under the NHIF Act of 1998, which pegged workers’ contribution at Sh320 per month, it made sense to re-evaluate a 17-year-old law that no longer made economic sense.

Universal healthcare

Under the new rates, the least amount to be contributed is Sh150 for employees with gross earnings of up to Sh5,999, while the maximum contribution is Sh1,700 for those earning more than Sh100,000. The self-employed, who have been paying Sh160 per month, will start paying Sh500.

NHIF’s mandate is “to provide accessible, affordable, sustainable and quality social health insurance through effective-efficient utilisation of resources to the satisfaction of the contributor”.

But has this been the case? Have contributors been satisfied?

The NHIF website has a curious statement, “Since the NHIF is a partially-funded scheme, the member shall be required to pay excess costs beyond the set prices ... co-payment is set as a mechanism to control unnecessary over-utilisation of health services.”

Kenyans need to ask themselves what is stopping this important fund from attaining the objective of universal healthcare. We should also worry that the Abuja Declaration target of allocating 15 per cent of a government’s budget to the health sector may be a pipe dream.

But it would be reckless to criticise NHIF and close our eyes to the happenings in the private health insurance sector, where providers suffer two maladies: cream skimming and cost spiral, which negatively impact on their members.

Cream skimming occurs mainly because the private health insurance sector wants to increase profits by creating benefit packages that deliberately exclude those that have a high risk of falling ill.

The cost spiral results from the apparent inability to extend medical cover to the rest of the population because of the cost of health insurance. Cost drivers include specialists and non-health activities, such as administration, managed care and broker activities.

Private medical schemes also tend to operate in a weak regulatory context, which increases the cost burden. There is no clear and systematic official oversight of the quality and clinical care in this sector.

Changing trends

Since commercialisation of healthcare in Kenya has left a legacy of inequity the Government has struggled to bridge, it may need to do the following to redeem NHIF:

One, accurate audited accounts must be made public to slay the dragon of corruption.

Two, revamp NHIF to make it responsive to changing population trends, healthcare needs, and public service approaches, as well as manage public finances prudently.

Three, conduct detailed audits of both private and public facilities to establish their capacity and distribution, and to improve and expand them.

Four, exempt low-income earners and pensioners from paying contributions.

Five, address the shortage of doctors — statistics show that for every 100,000 people, there are only 21 doctors.

Six, enact laws to protect Kenyans from the greed of private and public health insurance providers.