Transforming NHIF to save Kenyan lives and money
DR PETER KAMUNYO
On December 12, 2017, President Uhuru Kenyatta unveiled his administration’s focus for his second term, christened, The Big Four Agenda. Among these is affordable healthcare for all.
At the core of this agenda are two-pronged aspirations: Actualise 100 per cent cost subsidy on essential health services and reduce medical out-of-pocket expenses by 54 per cent as a percentage of household expenditure.
In simpler terms, the aim is to reduce the economic burden of healthcare on the common mwananchi.
To do this, key institutions in public health are being reformed to make this a reality.
One key component is a nationalised medical insurance scheme that would allow anyone to join. For Kenya, this scheme is the National Health Insurance Fund (NHIF), which is at the centre of the Universal Health Coverage (UHC), as it receives financing from member contributions and government subsidies for vulnerable populations.
NHIF offers health insurance coverage for in and outpatient hospital visits, at over 8,000 private and public hospitals countrywide.
The rate for the informal sector on this cover is currently fixed at Sh500 a month and for those in formal employment, is at graduating scale between Sh150-1,700 monthly.
NHIF also caters for the disadvantaged through government-sponsored programmes such as Linda Mama programme, a cover for expectant mothers and newborn babies with no other form of insurance.
Secondly, there is Edu-Afya, the cover for students in public secondary schools.
The other is the Health Insurance Subsidy Programme, which covers poor, orphans and vulnerable children, the elderly and persons with severe disabilities.
NHIF’s membership has steadily grown to 9.5 million for principal members (and 12.49 million beneficiaries).
It has increased coverage of the informal sector from less than 200,000 in 2005 to over 3.2 million currently.
Total contribution revenue has also increased from Sh3.1 billion in 2006/07 to over Sh60.6 billion, while payout ratio has increased to 90 per cent in 2017/18 from 32 per cent in 2006.
In 2019/2020 NHIF paid for 4.44 million hospital visits; 1.43 million in-patient, and 3.01 million outpatient.
Unlike most private insurance companies, the NHIF cover has no upper age limit, no filtering for pre-existing illnesses on enrollment and is family-based rather than individual-based.
One big challenge NHIF has today is that most members select private hospitals over public health facilities despite the fact that in most rural and informal settlements, public facilities are better and accessible.
Informal settlements in Nairobi, for example, are often covered by dispensaries and with only three higher level facilities.
These are lower level public health facilities that often function only with the “cost-sharing” funds from donors such as DANIDA and limited support from county governments.
One core reform is universal enrolment of all public health facilities into the scheme to ensure wananchi can access services within a few kilometres of their homes.
As is currently structured, NHIF method of reimbursing healthcare facilities for the national scheme is based on list capitation, which involves giving a specific amount of money to each facility under the scheme per person.
Therefore, the amount a facility gets depends on the number of Kenyans who choose it.
A lot of providers, especially in rural Kenya, have decried this method as unfair as a lot of citizens choose higher-level facilities.
This leaves them with few patients at capitation cost, for them to adequately raise standards of care to a satisfactory level, and has led to low levels of health-seeking behaviour among rural communities and informal settlements.
As a result, other methods of capitation such as geographical and a risk-adjusted method have been proposed as supplemental to list of capitation.
The Ministry of Health is working with NHIF and other stakeholders to find an optimal method to overcome these concerns.
The next phase of UHC scale-up will focus on more sustainable output financing, through an insurance model whose beneficiaries will access UHC Benefits Package (Supa Cover Reloaded). In this new phase, the national and county governments will advise on vulnerable Kenyan households to be covered.
The goal is to ensure every Kenyan will never need to worry about facing financial ruin over illness. This is a goal we are pursuing: to save lives and people’s money. — The writer is the CEO of NHIF