Title: Implementing The African Continental Free Trade Area (AfCFTA): Lessons from The EAC.
Date: February 17th 2021
Time: 10:00 AM - 11:30 AM
Venue: Microsoft Teams
|Post Date: 30 June 2020 | Category: General | Hits: 5189|
By: Darmi Jattani
The Constitution of Kenya, 2010 created a two-tier governance system with national and county government elements. Embedded within the constitution are interdependent government functions. Health sector responsibilities are shared between the two tiers of government. The National Government is charged with policy formulation, planning and budgeting, capacity building, health research and quality assurance. Health service delivery is left to the county government.
The government has made a commitment to achieve universal health coverage by the year 2022 and this is embodied in the Big Four Agenda which includes healthcare as one of its key development policies. The Big Four agenda is Kenya’s medium-term socio-economic development plan under the current national administration. Universal health coverage (UHC) is mainly about financing, where the government pays the premium for the insurance cover provided to the people by insurance companies/schemes. The National Health Insurance Fund (NHIF) is the primary implementation institution for UHC.
In efforts to enhance the NHIF’s capacity to deliver the promise of UHC to Kenyans, the national government has introduced several reforms in the last eight years. The reforms include: the introduction of the civil servants’ scheme, the health insurance subsidy for the poor, revision of monthly contribution rates and expansion of the benefit package and upward revision of provider reimbursement rates. The successful delivery of the NHIF reform will demonstrate Kenya’s ability to efficiently pool revenues to cover for a healthcare package with essential services for all Kenyans, at all ages. This again will enhance confidence to join and invest in NHIF and create opportunities within the health sector to develop new partnership models for the delivery of care which will help the Country to make rapid strides towards the realization of UHC.
Chart 1: Registered Members of the National Hospital Insurance Fund
Every year nearly one million Kenyans fall below the poverty line because of health coverage related expenditures. A study by the World Bank (2014) shows that only 20% of Kenyans have access to some sort of medical insurance hence most Kenyans (80%) pay out-of-pocket for health care services. Protecting people from the financial consequences of paying for health out of their own pockets reduces the risk that people will be pushed into poverty. As shown in chart 1, about 8.5 million users were registered members of the National Hospital Insurance Fund in 2019 against the target of 19 million registered members by the year 2022.
Furthermore, slowdown in economic growth from 6.3% in 2018 to 5.9% in 2019 coupled with economic shock from covid19 will put more pressure on the already constrained fiscal health of the government and thus slow down realization of UHC. This situation is exacerbated by tax relief measures taken to mitigate effects of COVID and in particular the exemption of persons earning below Ksh 24,000 per month from paying income tax to increase disposable income will cost the government Kshs 19.84 billion in forfeited tax revenue . This puts more pressure on a government that is already struggling to finance its budget and more so slow down the realization of UHC.
Health insurance coverage in Kenya closely mirrors the proportion of formal sector workers . Ideally, you would expect registered users from the informal sector to be bigger than the formal sector since they form 83% of total employed individuals in Kenya . But most informal jobs are seasonal and lack adequate security of tenure. As a result of the pandemic, most informal jobs have been affected and most tax exemptions favour formal jobs only. Contributions towards health insurance fund might not be a priority to most households during this pandemic. For Universal Health Coverage to be feasible, they should register more users as a share of population and both from the formal and informal sector given that the biggest revenue stream for the NHIF comes from members’ contributions.
Table 1: Contributions and claims to the National Health Insurance Fund
In 2019, contributions to the insurance fund were Ksh 58 billion and the claim paid out was worth Ksh 53 billion. The contributions grew by 22% from Ksh 47.6 billion to Ksh 58 billion whereas the amount of payouts increased by 36.8% from Ksh 39 billion to Ksh 53.4 billion . The proportion of claim to contribution increased by 82.1% in 2017/18 to 92% in 2018/19. The increase in claims is higher than the increase in contributions and is attributed to hospitals colluding with officials at the insurance fund to generate false medical bills or inflate medical bills. Such loopholes should be sealed to ensure the health insurance fund is financially sustainable and can cover all its core functions.
The UHC in Kenya is built on a platform of ensuring that Kenyans have access to unified progressive health benefit package, expansion of population under universal health insurance coverage, ensuring financial risk protection for Kenyans, especially the poor and the vulnerable groups and increasing the availability of quality essential interventions . The objective is to provide essential healthcare and essential public health interventions and reduce financial barriers to access. In its aim to ensure universal coverage the government rolled out NHIF for secondary students, Linda Mama Initiative that enables expectant mothers access maternal care and four counties were selected to be the first beneficiaries of the UHC and the framework used in these counties will be a guide towards the attainment of UHC in all the 47 counties by the year 2022.
The four counties selected are Kisumu, Nyeri, Isiolo and Machakos . The decision was evidence based on the disease burden in the significant areas. Kisumu was chosen because it leads in the high number of infectious disease like HIV/AIDS and tuberculosis and Nyeri county is leading in cases of non-communicable diseases particularly diabetes. Ideally Isiolo County is meant to assess how the UHC will work among the nomadic population whereas Machakos County was selected because most visits to the hospitals are as a result of accidents and injuries. Since the launch of UHC in December 2018, not much by way of updates on the progress has been made and this therefore begs the question if the 2022 target is attainable. Makueni County has already been implementing its form of UHC where households pay Ksh 500 per year for health coverage and the programme has received a wide backing from the county residents.
For UHC to be viable administration of NHIF must be efficient and capacity must be significantly strengthened by expanding the network of health care facilities contracted to provide services to its members. Since voluntary contributory mechanism does not mobilize sufficient resources, expanding national pools through public subsidy can ensure coverage in Kenya. Targeted expansion of the Coverage could be achieved through use of tax funds to provide full subsidies for the poor and providing partial subsidies for the rest of the informal sector with some ability to make contributions to the fund. All these might not be achieved this year as the COVID 19 pandemic is expected to significantly reduce growth in 2020 with the government diverting Ksh 1 billion from UHC budget through revision of 2019/20 budget to cope with the impact of COVID 19.
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