Daily Nation Opinion

Overhaul NHIF, or just forget the universal health coverage dream


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What best captures the poverty of new ideas of Kenya’s political class? It is what to do with the National Health Insurance Fund (NHIF). 

Right now, some smart alec in the top management board has decided that the best way to improve the corruption-ridden body’s cash flow is to force poor voluntary contributors to pay full annual premiums in advance.

Why would you want to increase the cost of medicare to the unemployed and informal sector workers in a context where there are no alternatives? We are seeing yet another clear demonstration that systems and practices of NHIF have inbuilt biases against the poor and jobless and the entity does not have what it takes to champion our universal health coverage (UHC) dream.

The biases and prejudices were laid bare only recently, when the acting CEO, Mr Nic Odongo, appeared before the Public Investments Committee of Parliament. He tabled statistics before the committee that showed that high-end hospitals receive much more money from NHIF than government and mission hospitals, which provide services to the majority of the poor and unemployed.


For instance, in 2018, private hospitals received payments of Sh22 billion compared to Sh15 billion for both government and mission hospitals. In the same period, NHIF spent Sh17.7 billion on special treatment, which included flying some patients abroad for medical attention.

At the end of the deliberations, the committee’s chair, Ms Sabina Chege, ordered NHIF to, in the next sitting, produce a comprehensive list of all patients for whom it had paid medical expenses abroad, including a detailed breakdown of claims from high-end private hospitals.

The rules NHIF has come up with reflect an entrenched mindset in the top management and board. How else would you explain the blatantly unfair rules?

That as a voluntary member, you have to wait six months after registration to access maternity services at any hospital. That a voluntary member can only include one spouse and five children as dependents. That members who default for a year will start paying afresh and be eligible for claims only after 90 days from the day of resumption of payment, with a year’s payment upfront.

Callous, to say the least. When they tell you that the rules are about improving financial sustainability, it is a blatant lie. Any serious effort at improving financial sustainability of the fund must start with looking at the balance sheet.

NHIF collects Sh48 billion in revenues — more than half of the total budget of the Ministry of Health. Out of this, it spends a whopping Sh8 billion on administrative expenses. 

Private sector schemes do much better when you compare the expenses as a percentage of revenues.

But the elephant in the room is corruption. Indeed, NHIF is always in the news for the wrong reasons. Both its chief executive and CFO are in court facing corruption and fraud charges.

The areas of operation prone to fraud are all too familiar: payments of fictitious claims to corrupt hospitals and doctors, corruption in accrediting hospitals and fraudulent abuse of the system of capitation.

Which brings me to a story I like telling again and again.

Sometime in 2002, NHIF appointed an architectural firm to design a modern training school for its staff. The project did not take off. In 2006, the consultants slapped the parastatal with a Sh700 million bill for the design work they had done. 

At the end of it all, the parties ended up before an arbitrator, who made a ruling in favour of the architects but reduced the pending bill to Sh390 million.

The board and management moved to court to challenge the verdict. But the Office of the Attorney-General advised that the payment was valid.

The architects were paid Sh407 million. The engineers also lodged claims. They were paid Sh333.8 million in 2011.

Is it really fair to spend contributors’ money on a phantom project? Corporate governance is a big issue. We have too many government appointees on the board.

The institution is at a point where it should now be governed by a board of only people with specific skills. It needs strong board committees in areas such as finance, audit, quality assurance and investment.

Currently, NHIF operates as if it is only accountable to the government and Parliament. Accountability should be more directly to members and contributors.

Medical expenses are killing our people. I know of families that have been driven into poverty by medical bills. If we don’t implement major reforms at NHIF, the UHC project will never happen.

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