How NHIF plan may have been turned into cash cow


A scrutiny of the National Hospital Insurance Fund (NHIF) scheme reveals a curious decision where two private medical facilites received the bulk of the first quarter disbursment of the new civil servants’ out-patient medical cover rollout.

According to documents presented to Parliamentary Committee on Health, out of the total Sh634,749,376 payments released to hospitals and clinics in the country, Clinix Healthcare Ltd, which opened most of its chains five months after the scheme was rolled out, got Sh202 million, making it the highest paid private clinic in the country.

Out of a group of 25 services providers sampled, Gertrude’s Garden Children’s Hospital (Nairobi) was found to be the least costly hospital with total claims of Sh49,216.67.

Over Sh84 million of the money went to eight of Clinix’s ghost facilities. They include RVR building Clinix (Sh8.5 million), Likoni Coast Cinix (Sh4 million), Kiambu Town Clinix (Sh3.2 million), Kiserian Clinix (Sh3.2 million), Ongata Clinix (Sh4.2 million), Thika Clinix (Sh3.8 million), KCB building (Sh3.5 million), Imperial Bank Clinix (Sh4 million) Uganda Road Clinix (Sh4 million), while Embu town Clinix got Sh3.2 million. Kisumu-Webuye Road Clinix was allocated Sh3.2 million.

Clinix Medicare Limited had won a one-year contract to offer NHIF outpatient services to public servants and attended to 17,000 patients out of the total 164,000 — principals and dependants included.

Another questionable deal was between the provider and Meridian Medical Group amounting to Sh83 million, with its six service clinics that were not opened before the roll-out of the new medical scheme in January getting Sh30 million. An alleged fraud is supected to have been done in Nyali branch (Sh5.05 million), Nyeri (Sh7.4 million), Malindi (Sh5.6 million), Meru (Sh4.9 million) and Nakuru (Sh5.1 million).

Curiously though, the Kenyatta National Hospital (KNH) which is a national teaching and referral hospital with 26 departments and handling thousands of patients daily only received Sh1 million while Kisumu’s Meridian Centre, which handles an average 20 patients a day received Sh4.8 million.

Mbagathi District Hospital which provides care to hundreds of HIV-positive and TB patients daily was only allocated Sh61,875. Mama Lucy Kibaki Hospital which caters for over two million people who stay in Nairobi’s populous Eastlands got nothing. And so was Nairobi County’s busiest maternity, Pumwani, that got nothing despite being the most preferred delivery centre for most civil servants in the city.

The Embu town Clinix which received Sh3.2 million is said to be only a trailer container parked at the side of the road with neither furniture or personnel.

The Parliamentary Committee on Health, led by its chairman Nyaribari Chache MP Robert Monda, that has been investigating the NHIF scam has so far established the firm’s representative could be phony. They also questioned NHIF’s choice of service providers and whether those accredited could offer the services needed.

Also raising eyebrows was the NHIF’s decision to pay accredited hospitals and clinics in full even before they delivered their services, fearing that unscrupulous operators may take advantage of the pre-payments by diverting funds to other purposes or lodging fictitious claims.

Government hospitals

“The legislators feared that some service providers began ambitious expansion plans using the pre-payments instead of spending the funds on medical services for beneficiaries,” said Dr Monda.

For many, the rolling of the NHIF scheme was considered a positive step towards offering citizens a functioning health service that would have eliminated fraud by insurers and reduce the burden of meeting medical expenses by a majority of Kenyan employees who may ill afford the costs.

“This was rather curious and that is why some of us asked for a stop to the second disbursement of the funds for investigation to be done,” says former  NHIF Chairman Prof Richard Muga who was suspended together with the rest of the board.

It all came to effect on the January 1 when NHIF agreed to adopt capitation payment system where payments are made in advance to accredited health service providers on quarterly basis.

According to a former board member, the system was seen as best bet to help check fraud in claims payouts where insurers are billed after the patient’s treatment by the various health facilities and reduce payments for outpatient service.

Users were also required to choose the most suitable facility where they wanted to get their services.

But fraudsters took advantage of the capitation method to rip the fund off millions of shilling on its first quarter of disbursment. Prof Muga said the board and the management disagreed when it was discovered payment was being made to phony facilities with no capacity to provide medical services.

“While we all agreed capitation was a good thing, the board and the managment failed to agree on procedures,” said Muga. The bone of contention here was the curious choice by most users to prefer clinics rather than well known Government and mission facilities.

Essential services

A doctors union say the fact that the Medical Services Minister Anyang Nyong’o and the ministry’s Permanent Secretary Mary Ngare tried to protect the managers of the fund smelt scandalous.

“It is questionable how the managers of the fund and the board arrived at the two private facilities which do not have a national presence while leaving out public hospitals that attend to thousands of Kenyans,” said Dr Boniface Chitayi, the Secreatry General of Kenya Medical Practitioners Pharmacists and Dentists Union (KMPDU).

The medics are now calling for the restructuring of the fund to make it universal such that the members can access healthcare services anywhere in the country.

This can be achieved with the total implementation of the Musyimi taskforce report, which the medics believed addressed the many issues that bedevil the health care sector.

“We call upon all Kenyans to stand up for what is right. To reject this scheme in total will be detrimental to those who have already started remitting to the fund,” said Dr Victor Ng’ani, KMPDU Chairman.

The taskforce, chaired by the Secretary of Administration at the Ministry of Public Health Kioko Musyimi was set up to look into the issue of strengthening health services following the December strike by doctors, wants the Government to finance a three-year health stimulus package to improve the poor state of public health facilities.

It recommended that the Treasury should allocate a minimum of Sh217 billion over the next three years to revamp health infrastructure, human resources and  medicines and medical supplies.