Kenya’s National Hospital Insurance Fund (NHIF) posted a Ksh2.3 billion ($23 million) profit in the year ended June, further underlining the argument that the fund can broaden its services.
The fund is currently on the spot following its attempt to cap the number of outpatient medical visits it covers.
The scheme collected Ksh29.8 billion ($298 million) in the first full year of the graduated rates that see the highest contributors pay Ksh1,700 ($17) per month while those in the informal sector pay Ksh500 ($5).
The fund paid Ksh21.9 billion ($219 million) in benefits after widening its offerings to include chemotherapy for cancer patients, outpatient services, kidney transplants and MRI scans.
That the scheme posted profits defies the overall performance of the medical insurance industry where private service providers posted a combined loss of Ksh850 million ($8.5 million) last year. This has been the trend for the past three years, with private insurers posting underwriting losses from the medical sector.
Medical claims paid by NHIF last year were higher than those settled by private medical insurers, which stood at Ksh18 billion ($180 million). Health covers have been hit hard by fraud and undercutting due to competition.
NHIF’s success has continued into the financial year starting June with the fund reporting a net surplus of Ksh1.5 billion ($15 million) for the three months to September.
Over these three months, the fund has collected Ksh8.6 billion ($86 million) and settled Ksh5.9 billion ($59 million) in claims.
It is the decision by the fund to cap outpatient cover to four visits in a year for low contributors that has seen NHIF’s management disowned by its board, the plan suspended and a spotlight cast on the finances of the insurer.
Health Cabinet Secretary Cleopa Mailu suspended the decision by NHIF a day after it made the announcement until further consultations are carried out. However, the repeal was suspect given that the minister is represented on the NHIF board and would not have been kept in the dark on such a matter.
The public outcry was based on the argument that the poor are the most vulnerable to disease and are bound to make more visits to hospitals. The cap would force them to pay from their pockets over and above their contribution to the insurer.
Doctors also argued that such a move would see those who had exceeded the four visit limit fail to take immediate action on their illnesses, which would result in a spike in serious diseases and raise inpatient costs.
NHIF, on its part, is said to have been looking at ways to free up more cash to fund more costly inpatient services such as chemotherapy.
The fund also argued that it is most exposed to fraud for outpatient services and so the cap was meant to reduce these losses.
NHIF beneficiaries are allowed access to medical services from designated healthcare facilities countrywide.
Cases of chronic diseases have been on the rise and have seen families forced to ask for cash donations and sell their assets to take care of their loved ones.
Out of the Ksh5.9 billion ($5.9 million) claims settled by NHIF in the quarter to September, more than half were for surgeries with Ksh3.1 billion ($31 million) paying for specialised, major and minor surgeries.
Chemotherapy and radiotherapy accounted for Ksh769 million ($7.69 million) while magnetic resonance imaging (MRI), computed tomography (CT) scans and dialysis cost Ksh264 million ($2.64 million).
NHIF has also had to deal with fraudulent claims, which are said to be up to Ksh500 million ($5 million) forcing the fund to request detectives from the Directorate of Criminal Investigations to help with the matter.
“We have about 24 facilities being scrutinised to see whether their bills are genuine. A few service providers have already been prosecuted,” said NHIF chief executive Geoffrey Mwangi.
He also said the fund has opened a care centre to pre-authorise certain services such as MRI scans. Patients will be required to disclose details of the doctor carrying out the procedures in order for the centre to vet whether they are of good standing with the fund and can offer the required services.
NHIF is being urged to start using a biometric system to curb fraud as photo-cards are easy to forge. There have been cases of fraudsters using forged photo-cards to buy expensive drugs. The drugs are then sold to pharmacy outlets.
NHIF has started working with comprehensive medical providers who offer all types of services such as laboratory tests, pharmacy and scans under one roof, making it easier for the fund to manage its claims.
“It is easy for the contracted comprehensive providers to bill us and we can verify the claims. It also provides our members with one-stop shops for their medical care,” said Mr Mwangi.
NHIF started covering surgical treatment of up to Ksh500,000 ($5,000) per procedure last October after signing contracts with more than 2,000 hospitals, including high-end private ones such as Aga Khan, MP Shah, Nairobi and Mater.
Between October 2016 and June 2017, the state-owned insurer spent Ksh200 million ($2 million) on heart surgeries alone, highlighting a rise in lifestyle diseases among Kenyans.
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