Out-of-pocket spending on healthcare above Sh150bn


The National Hospital Insurance Fund building in Nairobi. PHOTO | JEFF ANGOTE | NMG 

Confinement of patients by hospitals due to unsettled bills continues to be a disturbing trend in Kenya, especially in the top facilities, a situation that has caused many families grief after their recovery.

A number of hospitals have been put on the spot over detaining of patients due to accrued medical bills, depicting the effects of the escalating cost of medical services coupled with the lack of employment to facilitate the services.

A spot check by the Business Daily identified a number of patients at a top hospital in Nairobi where among others, a 45-year-old Esther Jebii, says she is still stuck, weeks after recovering from a disease that almost claimed her life.

“This is my third week since I recovered. The hospital has totally refused to let me go because I have not paid my bills. I don’t know when I will get out of this place because my bill has hit Sh73,000 and still counting. I don’t have anyone to look after me. I separated from my husband and so I am not his responsibility and the bill continues to pile,” Jebii, who requested anonymity to avoid running foul with the hospital, said.

She discloses that her situation is even better compared to her ward-mate whom she says her bill is almost clocking Sh200,000.

She however admits that she does not have medical insurance since she cannot afford to pay the monthly contributions.

Kenyans from the informal sector are supposed to voluntarily pay Sh500 a month to the National Health Insurance Fund (NHIF) while those from the formal sector channel up to Sh1,700 monthly, depending on the salary scale.

Reports show that Kenyans are shunning health covers, which could help deal with costs associated with illness, treatment, and care further raising the amount spent on health services from the pockets.

The Kenya Demographic Health Survey (KDHS) 2022 shows that just one in four Kenyans has some form of health insurance, with the country’s health insurance coverage at 20 percent, according to the Ministry of Health.

The government targets to hit 80 percent of the population enrolled in health insurance coverage by 2030.

With 15.4 million members, the latest data shows that the NHIF has a total of 8.8 million dormant members which further compels them to cater for medical services directly from their pockets.

Dr Tonny Ochieng, a medical doctor at Kisumu County Referral says the situation is partly because NHIF is limited to salaried people on the payroll in the public and private sectors, leaving the jobless with huge prices to pay for medical care.

“NHIF is limited in coverage. The comprehensive cover, which has more services is benefiting the rich, but still has disadvantages such as not catering for laboratory tests. Similarly, the poor are left with the option of the regular cover which is limited to public hospitals where they are forced to buy drugs from their pockets,” says Dr Ochieng.

The government is yet to change the contribution structure from an individual contributory scheme to a household contribution model which will include all Kenyans regardless of their employment status.

Meanwhile, Kenyan families are still spending billions from their pockets on health services raised through harambees, WhatsApp groups, M-Pesa, loans, the sale of land, and other assets.

This is even with the availability of medical insurance covers such as the NHIF.

It is estimated that Kenyans spend Sh150 billion in out-of-pocket expenditures on health services a year driving nearly a million into poverty despite the State’s efforts on ensuring financial protection.

Available data shows that health expenditure per capita for Kenya was $83.41 in 2019, an increase from $20.52 in 2000.

This figure is expected to have shot up to date due to socioeconomic factors such as the high cost of treatment and drugs, the income, age, and education level of households which is worse experienced by those living below $1 dollar a day.

The situation continues to raise concerns about the government’s ability to attain universal health coverage by 2030.

In 2020, out-of-pocket expenditure on health jumped to 26.6 percent up from 24.3 percent in 2019 falling short of the World Health Organisation’s (WHO) recommendation of 10 percent.

This is partially due to the low government expenditure on health, which is still at 11 percent, below the “Abuja Declaration” target that requires African member states to set aside 15 percent of the government’s budget for the health sector.

WHO says more than 50 percent of the healthcare spending should be allocated to primary care, particularly to human resources, infrastructure, and equipment, in order to attain Universal Health Coverage (UHC) in low and middle-income countries by 2030,

In FY 2022/2023, Kenya’s treasury allocated the healthcare sector Sh146.8 billion out of which Sh62.3 billion was to cover UHC.

In the draft budget policy statement for the year 2023, the health allocation is projected to increase to Sh148.29 billion from Sh122.52 billion as the government hopes to scale up the universal health coverage programme.

“To further reduce out-of-pocket expenditures in Kenya, it is critical to address the role of the private sector, such as through the inclusion of more health facilities under the National Hospital Insurance Fund arrangement and coverage of pharmaceuticals,” read the World Bank report.

Health Cabinet Secretary Dr Susan Nakhumicha in an interview acknowledged out-of-pocket expenditure as one of the top challenges ailing the health sector and committed to putting in place long-term intervention to solve the issue.

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