Health insurers turn to cost-sharing as medical bills soar

The Kenya Medical Practitioners & Dentists Board, the regulator, says it has no powers to enforce the price guidelines.

Medical costs have nearly doubled over the past three years, growing at the fastest pace last year on rising ward charges, medicine and medical equipment cost and doctors fees.

The rise in the cost of medicine and medical equipment is however being attributed to a recent weakening of the shilling which has lost nearly 20 per cent of its value against the dollar since mid 2008.

This comes at a time when the top end hospitals have gone overdrive in revamping their equipment egged by the rising cases of lifestyle diseases and cancer.

Kenya imports 60 per cent of its medicines and 90 per cent of medical equipment.

The surge in medical costs has been steepest among top-end hospitals in Nairobi such as Nairobi Hospital, Aga Khan, Mater and Gertrude’s Children Hospital — which together take about half of the entire claims paid out by the insurance firms.

At Nairobi Hospital for instance, the consultation fee for general practitioners has risen to Sh2, 000 from Sh900 last year, while the Aga Khan University Hospital now charges Sh1,200 from Sh900 last year.

Specialists such as gynaecologists, dentists and oncologists in the two hospitals have however increased their consultation fees by even larger margins to between Sh2, 000 and Sh3, 000 from a range of between Sh1, 500 and Sh1, 800 last year.

Because of this increase, clients— largely the corporate schemes— are offering renegotiations with insurers to make the cost of the premiums remain the same or gain a moderate increase.

Some insurance companies have stopped offering outpatient services for new clients, saying the rising claims were eroding profit margins

Private medical insurance providers reckon that outpatient services account for between 65 and 80 per cent of their members’ hospital bills.

“We have put on hold the inpatient services since we are reviewing our business,” said Dr Ambrose Nyangawo, the manager for health services at UAP insurance.

Others such as Resolution Health have stopped offering outpatient cover for patients attending top-end hospitals.

“We were even forced last year to make a board resolution that now prohibits our members from seeking medical services at some hospitals in the country after they sharply adjusted their rates upwards,” said Mr Peter Nduati, the Resolution Health CEO.