The National Hospital Insurance Fund (NHIF) will stop paying for treatment of chronic diseases such as cancer, diabetes, heart and kidney ailments in private hospitals if Parliament approves changes aimed at reducing payouts.
Fresh regulations published by the State-backed insurer require it to cover patients with chronic illnesses in government hospitals like the overburdened Kenyatta National Hospital in Nairobi.
“A beneficiary with chronic illness shall access treatment for chronic illness from public health care providers only,” says the new regulations that were published Wednesday for public review pending approval by MPs.
This sets up low-income patients and affected households for tough times given the majority of them rely on the NHIF for diagnosis, drugs and hospital expenses.
The radical move will also hurt private hospitals like Nairobi Hospital, Nairobi West and Mater that receive billions of shillings to provide care to patients with chronic illnesses.
Reduced budgetary allocations and mismanagement by county governments have seen public hospitals struggle to treat chronic ailments due to lack of equipment and doctors.
The NHIF does not describe a chronic disease, but it is expected to rely on the US public health agency, the Centres for Disease Control and Prevention (CDC), definition.
The CDC defines a chronic disease as a condition that lasts one year or more and requires ongoing medical attention or limits activities of daily living or both.
The shift towards rickety public hospitals comes at a time when renal dialysis, major surgeries and diagnostics tests such as MRI and CT-scans top the list of benefits that the NHIF aims to cut in a drive to reduce payouts.
The NHIF has raised the alarm over the significant number of patients with chronic illnesses from the informal sector who are joining with the aim of easing their medical bills.
The fund members pay Sh500 monthly or Sh6,000, with those with chronic diseases receiving benefits of nearly Sh1 million per year, underlining the burden to the fund.
The number of voluntary contributors has jumped in recent years on the back of a mass recruitment drive.
It is expected to grow further with the enforcement of a new law that made it compulsory for all adult Kenyans to contribute to the NHIF.
The mandatory NHIF membership is an upgrade of the previous scheme where only workers in the formal sector were compelled to join.
Official data shows that the NHIF had 8.898 million members at end of June 2020, with 4.452 million drawn from the formal sector and 4.546 million from the informal segment, up from 2.4 million in 2015.
Increasing cases of lifestyle diseases such as hypertension and diabetes among young working-class Kenyans has led to the rise of medical insurance costs.
Unhealthy eating
The ailments are linked to the adoption of unhealthy eating habits and sedentary urban lifestyles with no regular body workouts.
Middle-class Kenyans are expected to spend heavily on healthcare over the next five years as they live with complications from lifestyle diseases.
Health insurers are warning that policyholders will soon face higher medical premiums.
They are also asking companies for additional money to meet rising medical bills in what looks set to hurt corporate Kenya at a time when it is keen to cut employee costs.
Lifestyle diseases such as hypertension are quietly becoming the lead killer just like malaria and HIV/Aids are.
Health policy experts are worried by the fact that the diseases are no longer a rich man’s problem.
They are spreading fast among the poor who have little capacity and financial muscle to manage them, forcing a majority of the patients to rely on the NHIF.
With Kenya facing rapid urbanisation and the economy expected to maintain recovery, lifestyle diseases are expected to be more entrenched in the population.
This will emerge as a money-spinner for the pharmaceutical industry that is increasing the level of investment to cope with the demand for drugs to cure these diseases.
But it will leave households poorer as the NHIF, which in 2015 introduced outpatient cover for contributors and enhanced benefits for specialised treatment such as cancer and kidney dialysis, retreats from covering lifestyle diseases in private hospitals.
Screening, diagnosis and treatment of chronic diseases have piled pressure on the NHIF’s cash flows given that the costs at private hospitals are more than double the rates at public hospitals.
The State-backed insurer paid Sh3.844 billion for 295,563 claims for patients who sought renal dialysis in the year to June last year.
This represented a 208 percent jump from Sh1.247 billion the NHIF paid for dialysis in the year to June 2017.
NHIF members are entitled to two weekly sessions of dialysis that each costs Sh9,500, pushing total annual payment per patient to an average of Sh960,000.
The fund had accredited 1,619 private health facilities in the year to last June, which represents 21 percent of the total health facilities.
The move to drop private hospitals comes when the fund is seeking public support to have workers earning more than Sh100,000 per month pay more in monthly contributions, indicating deeper financial strain on them and employers.
The regulations seek to have workers earning more than Sh100, 000 pay 1.7 percent of their gross salary to the fund.
This is a shift from the present model where employees earning over Sh100,000 pay a fixed monthly contribution of Sh1,700 to the fund.
It is seeking additional resources to cater for the expected jump in new members, especially from the informal sector who pay Sh500 monthly.
This will hinge on its model where the rich are expected to take care of the poor.
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