The companies paid out a total of Sh3.7 billion in medical costs last year, a Sh400 million rise from the previous year’s Sh3.3 billion.
KCB incurred the highest costs having paid out Sh782 million.
Kenya’s employers have been battling increased medical costs burden that industry experts have attributed to collusion by healthcare providers and insurance companies.
A steep increase in claims pushed up medical costs for 14 Nairobi Securities Exchange-listed companies 11.23 per cent last year, industry statistics show.
The companies paid out a total of Sh3.7 billion in medical costs last year, a Sh400 million rise from the previous year’s Sh3.3 billion.
Out of the 14 firms, KCB #ticker:KCB incurred the highest costs having paid out Sh782 million or a four per cent jump from Sh750 million a year earlier.
Standard Chartered’s #ticker:SCBK medical costs were the second highest despite declining 7.56 per cent to Sh754.6 million last year from Sh816.3 million the previous year while Barclays Bank of Kenya’s (BBK) #ticker:BBK costs rose 19 per cent to Sh550 million in the period under review.
National Bank of Kenya (NBK) #ticker:NBK closed the year at position four, its costs having risen 16.25 per cent to Sh411.5 million while I&M Holdings' #ticker:I&M medical costs jumped 19.6 per cent to Sh370.8 million.
More than half of Kenya’s 32 medical insurance firms posted a Sh621.64 million loss in 2016 as healthcare costs rose to a new high and sector competition intensified, leading to price undercutting.
The Insurance Regulatory Authority (IRA) said 20 out of 32 medical insurance companies succumbed to underwriting losses in the financial year ending December 31, 2016.
Medical insurance claims rose 10.2 per cent to Sh54.8 billion in 2016, as the cost of healthcare rose with increment in fees and cost of drugs. A number of hospitals increased fees on services such as outpatient consultation and bed charges during the year, according to the IRA data.
Kenya’s employers have been battling increased medical costs burden that industry experts have attributed to collusion by healthcare providers and insurance companies to make fraudulent claims.
Inflated claims from healthcare providers and over-prescription of branded drugs have been blamed for persistent losses among medical insurers, according to Sanlam chief executive Patrick Tumbo.
Mr Tumbo earlier this year said that the fraud had become so deeply rooted that some health service providers were openly using a two tier pricing for their services – charging those with medical cards more than those paying in cash for the same service.
“In some cases, patients are subjected to unnecessary tests that have nothing to do with treatment of what they are ailing from so that the health provider can bill the insurer,” Mr Tumbo said in a newspaper commentary.
“The effect of this has been the exhaustion of medical cover benefits before the duration, leaving the insured customer exposed for the remaining period of cover.” The Association of Kenya Insurers (AKI) executive director, Tom Gichuhi, however said taming rogue medical providers has proved difficult because hospitals have varying charges.
“Patients, who pay cash are usually more alert and often ask why the tests need to be done. And in such cases, you find some doctors will order only the specific test,” argued Mr Tumbo.
