LETTERS: How to reform NHIF for better services

NHIF should borrow a leaf from local insurance technology (insurtech) startups that have developed products with premiums as low as Sh500 per year. FILE PHOTO | NMG
NHIF should borrow a leaf from local insurance technology (insurtech) startups that have developed products with premiums as low as Sh500 per year. FILE PHOTO | NMG 

The government’s move to implement the Universal Health Coverage (UHC) initiative is noble and long overdue. Yet, unless a more sober approach is adopted to finance its risk, the attempt will prove futile.

To realise the full benefits of UHC, which includes enabling every Kenyan to obtain essential health services, the government should review how the National Hospital Insurance Fund (NHIF) operates.

This is because the social insurer is the optimal platform to fund financial risks against illness and accident, especially for the poor. If well harnessed, and if its entire operation matrix is revamped, NHIF will provide the best gateway to actualise this goal.

For the fiscal year 2016/17 Kenya dedicated Sh60.3 billion, about four per cent of its national budget, for healthcare compared to the 15 per cent recommended during the 2001 Abuja Declaration. About 10 per cent of the health budget went to NHIF.

The fund improved services and rebates in the last year, even offering coverage against health complications such as diabetes and cancer.


Presently, it has 6.5 million beneficiaries and the government seeks to double the figure in four years under the UHC programme. The coverage is expected to net about 40 million Kenyans.

For NHIF, salaried employees remit mandatory premiums of up to Sh1.700 monthly each while there is a Sh500 voluntary scheme for the self-employed.

This is discriminatory to the poor who cannot afford the monthly premiums. It is not lost that this premium collection model is basic and unsustainable. An actuarial evaluation should be undertaken and a more viable model developed.

For example, a recent study by Kenbright Actuaries and Financial Services found that Sh86.3 billion was needed if NHIF was to include HIV treatment in its portfolio. This presents an opportunity for the management to seek smarter ways to pool more money.

NHIF should borrow a leaf from local insurance technology (insurtech) startups that have developed products with premiums as low as Sh500 per year.

With the right actuarial input, I am sure it can roll out micro-insurance covers that can hasten coverage across the country. In fact, NHIF can be at the forefront of championing insurance coverage acceleration in the country that still stands at three per cent of the country’s GDP.

Apart from a well managed and a crisis-free NHIF, Kenya needs to put in place a health system that is efficient and strong. This includes an acceptable mix of responsibilities between the national and county governments when it comes to health matters.

The national government cannot continue ignoring its healthcare responsibilities despite the roles having been relegated to counties. This has caused considerable confusion among the stakeholders, especially in the better part of 2017 when the industry was grounded due to doctors and nurses strike.

For UHC to be fruitful, the government should also consider adopting bolder policy and leadership changes. This includes genuine political commitment and a serious approach to addressing human resources gaps.

According to sector officials, the country will need 2,400 doctors and 55,200 nurses to plug this deficit. Also, 94 referral hospitals are needed.

Lastly, the government should rope in the private sector. Some of the remarkable public private partnerships in the past include a seven-year Managed Equipment Services Partnership with General Electric to provide Kenyans access to teleradiology services across 98 hospitals in all counties, and the initiative with Philips and the United Nations to improve access to primary healthcare.

Through UHC, every Kenyan is expected to access health services. Presently, in some parts of the country, some of basic health care services such as family planning and infant immunisation are available. Still, because four out five Kenyans do not have any form of medical insurance, most of them have to pay for these services.

To accelerate UHC, increase the rate of financial protection and realise a drop in poverty due to affordable healthcare, the government should take a new approach on how NHIF runs its operations, and strengthen its capability in long-term financial risks management.

John Njiru, Nairobi