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NHIF yet to strike deal with private hospitals

By Paul Wafula | June 21st 2016
Big private hospitals are yet to sign up to the NHIF outpatient cover.

The National Health Insurance Fund (NHIF) is still in talks with top private hospitals to allow contributors to list them as their preferred medical service providers more than a year after it launched its outpatient cover.

NHIF Chief Executive Officer Geoffrey Mwangi said negotiations were still ongoing and insurance companies have also been roped in with a view of helping to broker a deal. NHIF has been in a standoff with major private hospitals, which refused its initial proposal as too little to fund the healthcare needs of contributors.

“We are still in talks with the big hospitals. Our model is based on capitation and this is what has been an issue,” Mr Mwangi said in an interview with The Standard.

It is not yet clear when these negotiations will end. Despite increasing the rates from Sh320 to as high as Sh1,700 per month, patients are yet to start accessing some of the big hospitals such as Nairobi, Aga Khan, Mater, MP Shah and Gertrude’s due to the pay standoff.

The increment that took effect last year in July pushed up contributions for formal sector workers in a graduated structure that saw top earners’ deductions shoot up by 431 per cent. Workers earning Sh5,999 pay Sh150 while those paid Sh100,000 and above remit the highest amount of Sh1,700. The self-employed, who were paying Sh160 per month are now paying Sh500.

NHIF, which was mainly paying hospital bed charges for members, justified the new rates on grounds that it was to use the larger pool of funds to introduce comprehensive inpatient and outpatient medical covers.

But this has largely been reduced to a public hospital affair and low level private hospitals, some who have wanting service levels, after the established players rejected the NHIF rates. NHIF capped the annual benefits for out-patient services at between Sh1,200 and Sh1,400 depending on the hospitals, amounts major private hospitals rejected on grounds that they could not sustain their operations.

Most of these big hospitals charge more than Sh1,200 limit as consultation fees alone per visit. This means that there would be nothing left for diagnostic services and medicine. It is also feared that the big hospitals would run away with all the patients, chocking out the small and little known ones under the arrangement where patients are allowed free will to choose any facility of their choice.


Contributors who have an alternative medical cover from their employer or have procured one on their own have ended up receiving the short end of the stick. This is because they have been paying the high rates but would prefer to retain their private insurance company given that there is no restriction on the hospital they want to visit.

Mwangi also defended the need for patients to choose only one hospital they would be visiting when they fall sick. “By choosing a hospital, patients now have a chance to have a personal doctor who has all their medical history,” Mwangi said.

He added that in special circumstances such as an emergency, patients can visit any other facility as long as it is accredited by NHIF. “No facility should turn away a patient because it is not their hospital of choice in the case of an emergency,” he said.

Contributors want a bit of flexibility on the scheme especially when they travel so that they can still use their NHIF cards to pay for medical services in case they fall sick when they are far away from home. Mwangi also ruled out the possibility of reducing the monthly contributions down from the current Sh500 citing the high cost of medical services for self-employed contributors.

The unemployed and people in the informal sector who do not have a regular income were some of the most affected after the review.

Mwangi, however, said some legislators had approached the fund with a proposal on coming up with an arrangement that would be affordable to the poorest, orphans and people living with disability, using the Constituency Development Fund.

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