UHC and the concept of social health insurance

It is important to note that there is no Free Health Care (FHC) in the universe. If one accesses health services free, someone else somewhere is paying for it, or must pay for it in the future. The government has been providing funding in-kind for free services offered or supplemented through conditional grants, user fee foregone, output based financing as well as providing funding in-kind through supplies of medicines, vaccines, and medical equipment. The Government often provides policy directions through a policy paper that eliminates formal user fees at the point of service; this can be for all services, for primary health care, for selected population groups, for selected services for everyone or for selected services for specific population groups, usually characterised by medical or economic vulnerability.

Examples of services that are provided under free healthcare policy include antenatal care, skilled deliveries in Government health facilities, health services for children below a defined age (often below five years), services for elderly people above a certain age (often 65 years), services for persons living with severe disabilities and health services for orphans. These services are chosen to protect population groups deemed to be poor and vulnerable.

Easy-to-observe criteria such as age, pregnancy or defined geographical areas are used to determine whether a person is eligible for free health services at the point of use. This is in contrast to relying on income or other means of assessment to determine whether an individual is entitled to exemption from paying user fees.

By introducing access to FHC, the government is explicitly showing its intention to make progress towards UHC by:

  • Increasing service utilisation for specific services, in line with people’s health needs.
  • Improving financial risk protection.

Implicitly, FHC also aims to enhance the quality of health services guaranteed through this policy. Transparency and accountability are key aspects as eligible people need to know they are entitled to FHC. With few budget resources to fund FHC as a way to make progress towards UHC, there are inevitable trade-offs, which lead to decisions about prioritising particular services or population groups. This requires decisions about who should receive financial protection at a particular time.

In Africa, Kenya stands high as one of the few nations that have sustained a national hospital insurance scheme for over 50 years, and to which every employed Kenyan is required by law to join, but is open to voluntary contributions from citizens in the informal sector.

Upon attaining independence in 1963, the Government of Kenya (GoK) recognised the pivotal role of health towards socio-economic development, and embarked on wider policy reforms aimed at enhancing access to quality care.

These policy documents and various development plans led to the formation of the National Hospital Insurance Fund (NHIF).

NHIF was established based on the recommendation of Sessional Paper No. 10 of 1965, titled, “African Socialism and its Application to Planning in Kenya” that operationalised a centralised health system.

The Fund was originally set up under the NHIF Act of 1966 as a department under the Ministry of Health. Its core mandate was to provide medical insurance cover (hospitalisation cover) to all its members and their declared dependents (spouse and children).

As the main type of health insurance at that time, NHIF’s monthly contributions were Ksh5 per month.

In 1988, the government introduced guidelines for Primary Healthcare (PHC) implementation and user fees (cost sharing) in an endeavour to raise funds, meet the cost of maintaining healthcare facilities and increase community participation in PHC.  This was implemented from 1989.

The policy of cost sharing was mainly to bridge the gap between actual budgets and the level of resources needed to fund public health sector activities.

In 2003/4, cost sharing contributed over 8 percent of the recurrent budget of the MOH. The government introduced 10/20 policy for PHC facilities by removing user fees of Ksh10 and Ksh20 in primary care facilities (dispensaries and health centres) to reduce the barriers of access to health services in 2004.

Despite the increase in funding from cost sharing, the MOH expenditure as a share of the total budget, which stood at 8 percent, was far below the Abuja Declaration target of 15 percent. User fees were temporarily suspended by an Executive Order in 1990, but reintroduced in 1992.  It’s important to note that in 1994, for the first time since independence, the first health policy framework 1994–2010 was developed to provide direction for the sector.

This was delivered through various five-year strategic plans. Evaluation of the first strategic plan 1994- 1999 demonstrated a worsening trend in health indices. This informed the Second Health Sector Strategic Plan 2005-2010 with the theme: “Reversing the National Trend”. In this strategy, a critical focus on use of community health workers in service delivery was introduced, with a community strategy implemented across the country, which is the current focus of UHC.

The year 2010 is remembered for inauguration of Kenya’s Constitution with devolved functions. Indeed, a significant number of health functions were devolved to the 47 newly-formed counties.  As part of reducing financial barriers to access to health services, the Government removed user fees in all primary care facilities in 2013.

Also waived were user fees in government health facilities for delivery services, famously called Free Maternity Services (FMS), in the same year. FMS has since transformed to the “Linda Mama” programme, with reimbursements from NHIF for antenatal services, delivery and postnatal services across all government health facilities.

The Constitution of Kenya, under the Bill of Rights, gives citizens the right to the highest attainable standards of health in line with the WHO Constitution, which declares health a fundamental human right, thereby committing to ensuring the highest attainable level of health for all.

This includes provision of essential, quality health services, from health promotion to prevention, treatment, rehabilitation, and palliative care. Progress towards UHC will ensure advancement towards other health related targets, and towards equity and social inclusion.

The Global Burden of Disease ranks Kenya at an approximate UHC index of 55 percent and predicts that by 2030, the UHC index will be at 60 percent.

Several strategic initiatives have to be put in place to progressively enable everyone to access the services that address the most important causes of disease and death, and ensure that the quality of these services is good enough to improve the health of Kenyans for the country to achieve close to 100 percent UHC.

Numerous efforts have been made to ensure a steady progression towards UHC by designing and implementing healthcare policy reforms. To increase access and demand for services, initiatives like the provision of free PHC services for all; free maternity services at all public health facilities; health insurance subsidies for the poor, vulnerable and the old; development of a health financing strategy that will ensure that the entire population is covered with some form of insurance; increase in staff and equipment through the managed equipment service at all levels; and expansion of maternity wings have been done.

This has resulted in an increase in the number of health facilities providing KEPH services from 41 percent to 55 percent and to 57 percent in 2013, 2016 and 2018, respectively (SARAM, 2013, SARA, 2016 and KHFA, 2018). However, with this increase in demand for services, the quality of services is still a major challenge.

Access to healthcare services in Kenya is improving, but there are still substantial differences within the country, with an increased per capita outpatient utilisation rate from 1.8 in 2012/2013 to 2.2 in 2018. The number of admissions per year also indicates a decline, from 38 per 1,000 population in 2013 to 35 per 1,000 population in 2018, with an average length of stay (ALOS) of 7.8 days (KHHEUS, 2018).

There has been an increase in facilities that provide high level, specialised care in the counties. To ensure national wide hospital access, the national community health strategy has been revised and updated. The country has also developed a national referral strategy that provides clear guidelines on referral processes.

NHIF ushers in voluntary contributions

Currently, the Fund derives its mandate from the NHIF Act (Act No.9 of 1998). Amendment of the National Hospital Insurance Fund Act in 1998 introduced profound changes on health insurance. For instance, the Act allowed the scheme to introduce cost-related payments instead of the hitherto daily bed rate only while maintaining the principle of mandatory insurance for the wage-earning workforce.

The changes allowed the extension of the health package to include outpatient health costs, doctor’s fees and laboratory investigations. Additionally, they allowed the extension of health insurance to health centres and other lower facilities, leading to better access and higher standards of healthcare services.

Despite criticism of the Fund, largely due to perceived weak governance, dependence on tax funding and lack of quality healthcare in many of its accredited hospitals, NHIF remains the largest social health insurer (18 percent out of 20 percent)  with about 4 million principal members and  7.5 million estimated beneficiaries.

This is primarily because of the high cost of privately funded healthcare. There had been efforts to lower the cost of healthcare, but it remained prohibitive for the majority poor in Kenya. Failure to lower the cost of healthcare was largely because the policy tended to flip-flop.

In 2013, after the election of a new government, user fees were abolished in public health centres and dispensaries.

Despite this, out-of-pocket payments continue to be a problem, with 31.5 percent share of total health expenditure.

A couple of factors could explain this. First, services at public hospitals (which still operate under the cost-sharing policy) as well as all levels of private healthcare facilities, are still paid out-of-pocket. Secondly, health insurance coverage in Kenya remains low, although it has increased from 10 to 18 percent between 2007 and 2018 [17], (KHHEUS, 2018).

Of the citizens covered by health insurance, 89 percent are under NHIF, the State entity with the mandate to provide social health insurance. An additional 5 percent are covered by private insurances while a further 4 percent are covered by employer institutions. Some 1 percent are covered by county schemes and 1 percent by community-based health insurance (KHHEUS, 2018).

However, health insurance mobilises only 5 percent of the current health expenditure in Kenya, implying that the depth of cover is low, hence necessitating out-of-pocket payments.

These concerns have necessitated the proposal that financing of healthcare gradually shift from predominantly out-of-pocket and tax funding to more sustainable pre-payment schemes in which the government will increase its attention to the most vulnerable.

Membership to NHIF is mandatory to those working in the formal sector (both public and private) and voluntary for those in the informal sector.

Contribution to the Fund for those in the informal sector ranges from Ksh30 for the lowest income groups to Ksh300 for individuals earning above Ksh15,000 per month.

Voluntary contributions to NHIF are monthly and average Ksh160 per month.

Among the key changes that laid the ground for UHC was the 2003 amendment by Parliament of the National Hospital Insurance Fund Act 1998. The changes to the NHIF (voluntary contributions) Regulations opened the door for membership to all Kenyans who wanted to contribute but were not employed or earning a salary.

A subsequent amendment to the same regulations in 2010 removed limitations to voluntary membership based on health and proof of financial capacity to maintain contributions, but retained the minimum contribution at Ksh300.

High cost of healthcare

Financial barriers are the biggest obstacles to quality healthcare. A mix of public, private, and donor resources support Kenya’s health sector. Between 2009 and 2013, donor financing fell from 34.5 percent to 25.6 percent, while financing from public sources rose from 28.8 to 33.5 percent.

Conversely, private financing for health increased from 36.7 percent to 39.8 percent over the same period. This is worrying because a huge part of private funding is in the form of out-of-pocket payment, which rose as a proportion of total health spending from 25 percent in 2009 to 29 percent in 2013 and 32 percent in 2018 (KHHEUS, 2018).

The MOH had identified several factors contributing to the declining health status. They were:

  1. Lack of access to basic, quality healthcare, primarily due to poverty;
  2. Long distance to public health facilities providers;
  3. Fear of medical diagnoses;
  4. Cultural and religious reasons;
  5. Low funding, forcing public health facilities to operate without essential commodities such as drugs and basic equipment.

The 2003 Kenya Demographic Health Survey showed that 23 percent of sick people don’t seek medical care, with financial barriers holding back over 40 percent of this number. The 2018 Kenya Household Health Expenditure Survey (KHHEUS) suggests that 28 percent of the households (males, 30 percent and females, 26.4 percent) were sick and never sought healthcare. The three major reasons mentioned for not seeking care were “self-medication”, “illness not considered serious enough” and “high cost of care” at 45 percent, 25 percent and 19 percent, respectively. At the time, only 9 percent of the central government’s expenditure was allocated to the public health sector.

Today, households remain a major financier of health, contributing 51 percent of the total healthcare expenditure.

The high out-of-pocket expenditure denies the vulnerable access to healthcare, while many are forced to sell their valuable assets to offset hospital bills, thereby impoverishing them further. It is estimated that healthcare puts 1.5 percent of households in Kenya below the poverty line every year.

Interestingly, when user fees (cost sharing) were reduced to affordable levels in rural health facilities and slums, utilisation of health services increased by 50 percent.

The National Social Health Insurance Fund (NSHIF) Bill

Public healthcare financing is currently influenced by two main legal and regulatory frameworks: the NHIF Act of 1998, from which NHIF’s mandate and functions derive, and the Insurance Regulatory Agency (IRA) Act (2006) which looks after the private sector in insurance matters.

The need to ensure that every citizen has access to healthcare services without getting into financial difficulties led Kenya to prioritise UHC.

Established as a State corporation in 1966, NHIF’s mandate is to provide affordable access to health services, and currently covers 18 percent of Kenya’s total population.

WHO had in December 2004 urged all member countries to consider mechanisms for pooling financing for healthcare, including Social Health Insurance (SHI) in order to achieve UHC.

The principle of SHI is solidarity and risk pooling, whereby members make contributions to the scheme and access benefits according to need, or at the time illness occurs.

Although SHI has not been implemented on a large scale globally, the fact that WHO has asked all member states to consider it in order to achieve universal coverage shows its importance as a healthcare financing mechanism..

Indeed, even as WHO came up with SHI, it was not possible to roll it out in Kenya due to the Structural Adjustment Programmes. The Structural Adjustment Programmes advocated capping ceilings on health and freezing employment in the public sector. It was imposed on Kenya by the World Bank and the International Monetary Fund, and had a negative impact on healthcare.

This implied that no additional funds would be used to expand the health facility network or to employ more health workers to manage increased workload due to HIV/Aids, TB and malaria. In some cases, one nurse would take care of more than 60 people.

In 2003, the Government’s five-year blueprint for social and economic growth, known as the Economic Recovery Strategy (ERS) for Wealth and Employment Creation 2003-2007, set out measures to improve affordability and access to better healthcare, particularly for the most vulnerable.

Among these measures was the proposed enactment of legislation converting the NHIF into a National Social Health Insurance Fund (NSHIF) that would cover both inpatient and outpatient medical needs.

This was to be carried out through reallocation of resources towards preventive and basic health services. The ERS envisaged an increase in Government funding of the health sector from the 2003 level of 5.6 percent of total expenditure to 12 percent by the end of the ERS period (2007).

When Mr Mwai Kibaki was elected president in 2002, the manifesto of his NARC party promised the introduction of a National Social Health Insurance Scheme.

The Aga Khan Hospital in Dar es Salaam, Tanzania.

In May 2002, Mrs Charity Ngilu, then Minister for Health, established a sector-wide task force to prepare a national strategy paper and legislation that envisioned total transformation of NHIF into the National Social Health Insurance Fund (NSHIF).

The 2003 Kenya Demographic Health Survey revealed that health indicators were on the decline and that drastic action was necessary for the country to achieve the UN Millennium Development Goals. Mrs Ngilu argued that if the Government’s interventions and policies were to be pro-poor, then they must be geared to reducing the household burden caused by expensive healthcare.

Health involves more than medical care. Major influences come from social, political and economic factors. These include unemployment, poor living conditions, shortcomings in safeguarding early child development, gender discrimination and social exclusion.

In Kenya, famine and poverty are key examples of social determinants of health. Arguably, action on the social determinants of health is the fairest and most effective way to improve health for all people and reduce health inequities.

Unless the social causes that undermine people’s health are addressed, the goal of public wellbeing will be hard to achieve.

It was against this background that Kenya decided to propose a Bill for the introduction of a National Social Health Insurance Fund. The primary focus of the Bill was to increase access to health by the poor while at the same time mobilising resources for curative health.

The Social Paper No.2 of 2004 on NSHIS was tabled in Parliament for debate on 13th May 2004, and was unanimously approved and adopted on 19th May 2004. The National Social Health Insurance Fund Bill 2004 was then published on May 28, 2004.

It provided for payment of benefits out of the Fund contributions and set up the organs of the Fund. It was agreed that the NSHIF would be the successor of the NHIF, established under the NHIF Act, which would be repealed. The Act would apply to all Kenyans, including beneficiaries of private health insurance schemes.

The private sector, through the Kenya Private Sector Alliance (KEPSA), opposed the Bill on grounds that it would push private insurance companies out of business.

Despite this, the NSHIF Bill was passed by Parliament in November 2004 and thereafter presented to President Kibaki for assent. But the President declined to assent to the Bill and instead submitted a memorandum to the Speaker indicating specific provisions to be considered by Parliament.

In March 2005, the Bill was tabled in Parliament for reconsideration but, to date, it is still pending before the National Assembly.

This led to shelving of the proposed Act and return to the status quo with regard to the challenges and shortfalls that the health sector experiences in financing.

Thus, access to healthcare, particularly for the poor, has remained an unattainable goal unless the Government introduces new strategies on cost containment vis-à-vis the tax wage bill.

Change of strategy

After efforts to push the Bill through Parliament using another committee failed, a change of tack was necessary because the issue had polarised relations between various stakeholders. The government chose to tackle the problem by embedding social health insurance in the Vision 2030 development blueprint that anchors the national development agenda. This was boosted by the fact that in 2005, during the World Health Assembly, member-states passed a resolution on financing UHC.

Since then, Kenya has committed to allocating a minimum 15 percent of its national budget to health spending as stated in the Abuja Declaration, and has made good progress towards achieving Millennium Development Goals (MDGs).

In 2009, the World Bank Group (WBG) began working with NHIF on an independent review of the Fund through Deloitte Consulting and the drafting of a health financing strategy to guide the country towards UHC.

Importantly, the 2010 Constitution obligates the Government to undertake certain policies to ensure social security and the right to emergency healthcare.

Development of a Public Health Financing Strategy

By the year 2000, there were 4,355 health institutions that had NHIF services. The number increased to 4,557 in 2003. However, only 25 percent of the population had access to health facilities within an eight-kilometre radius from their homes.

Both distance to health facilities and general poverty contributed to low uptake of healthcare services in the country. Kenya’s Poverty Reduction Strategy Paper (PRSP) 2001-2004 states that high cost of healthcare is one of the leading causes of poverty. Almost 60 percent of Kenyans live below the poverty line. There was, thus, a need to reduce the healthcare expenditure of households.

However, since 2003, following significant public sector reforms, particularly those aimed at ensuring that State corporations actively execute their mandates, NHIF has recorded tremendous growth in corporate governance, medical insurance market access and increased benefit payout ratio.

Strategic review of NHIF commissioned

Development of a broad strategy on sustainable financing of healthcare in Kenya has been of concern because of the high cost of health services.

Direct payment for health services accounts for roughly 40 percent of total health spending in the country.

To position the NHIF for its enhanced role, it became necessary to carry out a strategic review of the Fund and a market assessment of its prepaid schemes to develop alternatives that would expand social health insurance.

In August 2010, the Ministry of Medical Services (MOMS), the International Finance Corporation (IFC) and NHIF commissioned Deloitte Consulting Limited (Deloitte) to carry out a comprehensive strategic review of NHIF and conduct a market assessment of prepaid health schemes/health maintenance organisations.

The focus of the review was the adequacy, or otherwise, of the Fund and its systems, including identification of gaps that could be addressed to meet the larger expectations of the people.

The market assessment of prepaid schemes focused on reviewing all previous work commissioned by the Government, donor groups and others, as well as relevant data that could allow for recommendations that could be implemented to strengthen the role of private health insurance players.

The outputs of this assignment were summarised in two reports:

  • Strategic review of NHIF and options for the revised future mandate of the Fund.
  • Market assessment of pre-paid schemes.

When the Government first introduced the graduated scale contributor rates in 1990, NHIF contributions were capped at salaries of Ksh15,000, with monthly contributions ranging from Ksh30 to Ksh1,000. Unchanged rates since 1990 have impacted on the Fund’s ability to expand the depth of cover to meet the growing population.

Since June 2010, NHIF has been able to reach 7.5 million beneficiaries, with 3.8 million principal members.

The Fund’s membership has grown during the five-year review period (from FY2006 to FY2010). Additionally, NHIF has increased coverage of the informal sector from less than 200,000 in 2005 to 531,388 as at June 2010.

The Fund has also increased the level of benefit payout to members and their beneficiaries. The payout ratio (proportion of contributions received paid out for provision of benefits) has increased to 54 percent in FY2010 from 32 percent in FY2006. This growth in the payout ratio is driven by rapid increase in claims, which have grown from Ksh1.1 billion in FY2005 to Ksh3.1 billion in FY2010.

Over the past five years, the Fund has increasingly invested in information technology to reach members and support the delivery of its mandate.

This includes introduction of tools such as electronic funds transfer (e.g. M-Pesa and Airtel Money), swipe cards, point of sales systems and other innovations that have increased the efficiency of the Fund.

Additionally, NHIF has improved its payment periods for undisputed claims, comparing favourably with private insurers. On average, the Fund pays claims between 14 to 21 days, compared with the best paying private insurers who pay at least within 30 days.

Over the years, NHIF has progressively been increasing the rebates on its in-patient package and increasing the number of hospitals in its network.

The Fund has contracts with 645 hospitals, accounting for 44,299 beds in Kenya against a total of 49,000 beds. It covers close to 100 percent of all hospitals in Kenya among the various categories from public hospitals to faith-based and private hospitals. This is by far the largest coverage of all insurers in the country.

To add to the existing in-patient services, the imminent full-scale implementation of out-patient services will be a major improvement on the level of service offered to members.

Importantly, the NHIF, covers approximately 18 percent of Kenyans. This is the largest number of members of any health insurer in the country as the private sector health insurers cover 700,000 people.

Countries with a long history of social health insurance, such as Germany (127 years), took decades to achieve universal coverage. However, countries such as Thailand and South Korea, which started SHI more recently, have taken a shorter time: 10 years and 35 years, respectively. In Africa, countries with relatively impressive coverage rates include Ghana (56 percent) and Rwanda (70 percent). These have been achieved. In all cases, strong government stewardship and contribution have been necessary to achieve high coverage.

The Strategic Review of NHIF Report came up with the following recommendations:

  1. NHIF should expand membership through targeting existing groups of informal sector members to ensure risk pooling and reduce adverse selection. This will involve partnerships with existing institutions, e.g informal sector Saccos. The Fund’s management could also consider incentives to attract contributors. Some incentives include making NHIF contributions tax deductible for members and possible discounts for prepayments.
  2. Target strategies that reduce inactive members and ensure consistent flow of collections. These include partnerships with other government agencies such as Kenya Revenue Authority (KRA) to target compliance.
  3. NHIF’s Board to restructure the Fund’s balance sheet by disposing fixed assets based on a solid business case, including sale of silo car parks at NHIF Building and Contract House, among other noncore assets.
    Optimise investment portfolio to rates above the current return of 3.7 percent using the short-term Treasury (90-day) Bill rate as a guide.
  4. NHIF to improve return on investments by divesting from large fixed asset portfolio and develop and implement an appropriate investment policy that ensures appropriate returns and supports liquidity and solvency of the Fund. The focus should be on safety, better yields and liquidity, with a minimum return equal to or higher than the Treasury Bill rate.
  5. Target a two to three-month surplus to boost its benefits payout ratio. This target should be based on a detailed actuarial and financial study and be invested based on more efficiency and pursuit of strategies to increase membership. NHIF has been paying out most of its contribution revenue towards benefits and minimising the accumulated profits of prior years.
  6. Targeting the excluded section of the informal sector via aggregate groups such as matatu drivers to reduce adverse selection, and partnerships to increase membership with financial service intermediaries such as savings and credit cooperative societies (Saccos).
  7. Reform the NHIF 1998 Act and develop an operational strategy to cover indigents. Indigent cover will require additional funding from the Government.
  8. Increase the depth of cover by reviewing the current benefits package and expand into outpatient coverage.
    Raise the number of providers under Contract A and B to expand the availability of comprehensive cover to more facilities.
  9. Strategic purchase of healthcare: move away from rebates to more innovative and cost-effective payment modalities for providers (fixed reimbursement, capitation, etc).
  10. Review payment modalities for each category of contract. Drive incentive programmes with facilities to partner in attracting and retaining members.
  11. Publish ratings of facilities to encourage high quality treatment of NHIF members.
  12. Utilise costing data to inform purchasing decisions and negotiations.
  13. NHIF’s Board and management to increase efficiency, and target to reduce the proportion of administrative costs to at least 22 percent (current internal target) and ultimately to 7 to 10 percent, in line with other SHIs. This can be achieved through implementation of financial management activity-based costing framework based on SHI functions. In turn, this will allow NHIF to track and manage costs related to registration, collections, payment, and customer service.
  14. The Fund should be in a position to know the cost of acquiring each member/beneficiary, and the cost of serving members/beneficiaries.
  15. Optimal use of office space by consolidating allocation at the head office from an average of 438 square meters per staff to 90 square meters per staff, and leasing out excess space to raise revenues of between Ksh80 million and Ksh102 million per annum from the rent.
  16. Align business processes to technology and human resource capacity. NHIF’s personnel expenses account for 71 percent of total administrative costs. To reduce the proportion of administrative expenses, a thorough review of HR expenditure/staffing numbers will be required. This will need review of all business processes to eliminate redundant manual processing where possible. For example, the claims payment process could potentially be paper-less, based on NHIF’s current technology capabilities. This would result in reduction of staffing. The affected staff could be redeployed to other areas, as necessary.
  17. NHIF should also determine areas in which outsourcing can be utilised. This will require the development of business cases to support the economic case for outsourcing. The Fund should look at some of its transactional processing areas and determine which ones make economic and strategic sense, to outsource. These include claims processing and membership registration.
  18. Performance management and monitoring of efficiency in the organisation as a core priority of the senior management and the Board, by embedding efficiency targets in senior management contracts, ensuring efficiency targets are part of NHIF’s performance contracts, and cascading and harmonising efficiency strategies across all functions.

In a 2018 paper titled “Domestic Resource Mobilisation for Health: National Health Financing Dialogue for Implementation of the Health Sector Domestic Financing Sustainability Plan” the National Aids Control Council (NACC) identified the following as key to delivery of UHC:

  1. Ensuring that all 47 counties prioritise health spending, because healthcare is now a devolved service under the Constitution. Counties to bottle corruption and tailor their healthcare services to tackle primary health challenges in their jurisdiction.
  2. The government to invest more in basic or essential health services rather than on specialised facilities so that more funds are available for preventive programmes and treatment.  Investments in new facilities and services have longer-term recurrent cost implications that put a strain on future capacity to sustain improved performance in health.
  3. Health professionals to change the perception of the general public that with the rebasing of the Kenyan economy to a low middle-income country, primary care or basic services are for low-income countries.
  4. Management of HIV and TB conditions must be included in a National Hospital Insurance Scheme, mainly because the main source of funding for the same is off-budget donor support despite the high annual and lifetime cost liability of antiretroviral therapy. For example, leaving HIV interventions outside the essential benefits package will leave 1.5 million people living with HIV outside Universal Health Coverage, challenging the universality principle and affecting the government’s ability to reach its UHC coverage targets.
  5. For UHC to succeed, both National and County governments must address the issue of wages in conjunction with productivity, absenteeism and doctors on public sector salaries operating their own clinics. For instance, in 2015-2016, salaries alone constituted 70 percent of public spending on the health sector and could now be closer to 80 percent.
  6. There is an urgent need to change the role and operating philosophy of the NHIF. NHIF continues to operate with a market–oriented approach similar to a private insurer. It offers differentiated packages that reflect an approach based on segmentation. In addition, there are many administrative barriers that insured persons have to navigate, casting doubt as to whether NHIF is ready, willing and able to play the role that it needs to in the context of UHC.
    Coverage with private voluntary health insurance is only about one percent, but it accounts for 10 percent of total health spending. This means that a lot of money is serving a small number of people. The Kenya health-financing model needs to carve space for the private sector in a way that limits this potentially harmful impact.
  7. Initiate development of longer-term institutional arrangements for package refinement over time, including the function of health technology assessment, budget impact analysis and citizen participation.
  8. Include health indicators in the new formula for the Commission for Revenue Allocation (CRA) that is being developed for implementation in 2019-2020, as well as use the processes of CRA to incentivise efficiency and monitor performance in the health sector at county level, including working on PFM issues.
  9. Develop ‘matching conditional grants’ for counties to invest in prevention, promotion and ‘health enabling’ interventions. Funding from the central government would be triggered to ‘match’ and reinforce these investments. This approach will be complimented with a strong monitoring framework to minimise gaming and ensure that the intent of the UHC policy is realised in practice.
  10. Have a single pooled grant in place, rather than various programmes such as sanitation, nutrition and immunisation, to encourage inter-sectoral dialogue at county level, while enabling counties to develop tailored solutions to their particular UHC implementation challenges.
  11. There is a need for institutional setup at county level (a county platform) that is resourced and staffed to analyse and tailor service delivery arrangements that adapt to local needs while ensuring adherence to national standards and performance criteria.
  12. Production of a multi-year ‘county health access plan’ with annual adjustments and with technical assistance support from the MOH as needed. This is a valuable instrument for strengthening the reach of health services in the country.
    Create an improved and unified universal data platform on patient activity and beyond, while ensuring that the MOH has full access to the database. A unified national provider payment database can allow analyses to inform policy and not just purchasing decisions.
  13. Harmonise the plans for a patient activity database with other ongoing developments in information systems, notably DHIS-2. Getting the data platforms ‘right’ and developing the skills to ask policy relevant questions of the data and feed this back into decision making, can be the make-or-break element in delivery of UHC.
  14. Recognising that NHIF has been in existence for more than 50 years, a conceptual approach is needed that divides the package rather than the population. A universal, budget-funded entitlement for the entire county population and a complimentary benefit based on contributory entitlement. The space for private financing to be mainly outside of this publicly defined service package, apart from possible co-payments for complimentary benefits for those who do not have complimentary insurance coverage.

UHC Pilot and the Big Four Agenda

When he unveiled the Big Four Agenda on December 12, 2017, President Uhuru Kenyatta declared UHC as the third pillar of the five-year social and economic development strategy under part of the Vision 2030.

Earlier in the year, on June 21, 2017, President Kenyatta had signed the Health Bill (2015) into law, providing legal backing for the health sector and the rollout of the UHC Pilot.

The Act made possible the establishment of a unified health system to oversee the complex relationship between the National and County government health systems, with the goal being seamless coordination between the two.

It also prioritised investment in public health infrastructure through provision of equipment, improvement of health service delivery, adoption of risk pooling financing systems and making aid more effective.

The target of UHC is to reduce medical out-of-pocket expenses by 54 percent as a percentage of household expenditure, and ensure that essential medical services in public health institutions are 100 percent subsidised.

The focus of UHC is on primary healthcare and the pilot phase in four counties of Kisumu, Nyeri, Machakos and Isiolo, dubbed “Afya Care – Wema wa Mkenya”, was launched on 13th December 2018 by President Kenyatta.

In his address, the President said: “We are embarking on this journey in a phased manner, starting with a pilot phase in the counties of Kisumu, Nyeri, Isiolo and Machakos, and we expect to learn critical lessons that shall inform the rapid scale-up to the rest of the country”. He said this at the launch of the project in Kisumu County – one of the four counties chosen to pilot the programme.”

Governors of all four counties in the Afya Care programme (Kisumu, Isiolo, Machakos and Nyeri) signed the UHC Service Charter at the launch ceremony.

The counties were selected based on the unique health challenges prevalent in each, ranging from a high incidence of communicable and non-communicable diseases, maternal mortality to road traffic injuries.

The total budget allocated to healthcare under the national budget still averages below five percent, but at the launch, the government promised to allocate additional funds to be paid via new taxation measures in the 2019-2020 budget as well as redistributing funds from other ministries, departments and agencies, and external donors.

Importantly, the remaining 43 counties not in the pilot phase were earmarked for strengthening of their health systems. Some Ksh3.1 billion was allocated to delivery of primary public healthcare in government hospitals and dispensaries.

In addition to restructuring NHIF, the Kenya Medical Supplies Authority (KEMSA) will also be reformed to end the persistent shortage of essential medicine and other critical supplies.

“To boost efficiency, all publicly-financed insurance pools should be collapsed into a single pool,” said the President.

The four counties in the pilot phase have already seen a boost in public healthcare prevention and monitoring, including drainage of stagnant water to reduce breeding sites for malaria-carrying mosquitoes, provision of mosquito nets, and more regular inspection of markets, abattoirs and eating places to reduce disease outbreaks.

Other activities include community health education in partnership with community-based organisations, screening for non-communicable diseases like diabetes, hypertension, mental illnesses and various forms of cancer to allow early diagnosis and treatment, as well as immunisation and antenatal services.

Also provided are rehabilitation and pain relief (palliative) services. Key to the pilot programme is registration of households and provision of a UHC card to each member, including children below 18 years, as well as access to essential medical services.

Documents needed for UHC registration are a national identity card, children’s birth certificates and/or a letter from the local chief.

“Universal health coverage is essential in addressing our national challenges and will go a long way in achieving the core principle of the Vision 2030 Agenda; that is, the realisation of a society where “no one is left behind,” then Cabinet Secretary for Health Sicily Kariuki noted at the launch ceremony for UHC in Kisumu.

The launch of Afya Care was the culmination of several years of focused planning and collaboration with various partners. Milestones included the Health Financing Strategy of 2010 and the 2010 Constitution, where the government provided the necessary legal framework for comprehensive and people-driven healthcare delivery.

The Constitution introduced a devolved system of governance with two-tier government systems, namely the County and National governments, with the goal of enhancing utilisation and geographical access to quality care by all Kenyans.

Quality care as the key to UHC delivery

As important as a reformed NHIF and KEMSA are to achieving UHC, the quality of care being provided cannot be overlooked.

In order to ensure that quality services are offered, Kenya has adopted a national quality assurance framework – the Kenya Quality Model for Health (KQMH) – which provides a pathway to optimal levels of patient safety, and introduction of joint health inspection checklists that emphasise on risk-based ranking of facilities, and enforcement of appropriate follow-up action.

This will lead to a locally driven quality assurance framework on which a regulation and accreditation system can be developed to incentivise facilities towards accreditation and total quality management. This will create a level playing field for competition and attainment of quality care as stipulated in the Constitution.

The Ministry of Health has identified the following modalities for quality assurance:

  1. Accreditation of public health facilities by the National Hospital Insurance Fund in relation to awarding of rebates to health facilities. This applies – on a voluntary basis – to facilities from the sub‐county level upwards but excludes health centres and dispensaries.
  2. Activities of the Kenya National Accreditation Service (KENAS) in relation to accreditation of certifiers and laboratories, are also voluntary processes.
  3. Other private standards such as ISO and Safe Care are also used in certification/accreditation of mainly private health facilities.
  4. Regulation by professional bodies and government agencies who have traditionally played their role in enforcing compliance to minimum statutory requirements. However, comprehensive coverage and capacity to implement enforcement remains a big challenge.
  5. Enhanced citizen accountability through community involvement in planning, budgeting and accountability, regular inspections by the boards and councils using the joint inspection checklist.
  6. Most facilities display their Service Charter at the entrance for purposes of accountability.

Amref Health Africa, a key partner in the government’s UHC journey, notes that while financial protection for Kenyans seeking access to essential health services is important, so is the need to ensure that the services being offered are:

  • Safe – avoiding injuries to people for whom the care is intended;
  • Effective – providing evidence-based healthcare services to those who need them;
  • People-centred – providing care that responds to individual preferences, needs and values;
  • Timely – reducing waiting time or harmful delays.

Amref in partnership with the German Government, is helping Kenya roll out KQMH across 39 facilities in the four counties under the UHC Pilot scheme.

A baseline survey of 12 facilities in Kisumu County by the non-government organisation in 2018 saw up to 30 county and health facility staff trained as Quality Improvement Master Trainers. Amref Health Africa noted: “100 healthcare workers in different cadres drawn from all departments at the facility have been trained on quality improvement through a cascade process.”

Under UHC, NHIF has been tasked with rolling out the Linda Mama, Boresha Jamii programme offering a package of basic health services based on need and not on ability to pay. Linda Mama is a public-funded health scheme that will ensure that pregnant women and infants have access to quality and affordable health services.

The goal of Linda Mama, Boresha Jamii is to “achieve universal access to maternal and child health services and contribute to the country’s progress towards UHC.”

Under it, all pregnant women who are Kenyan citizens are eligible to be members of free maternal services. Benefits include:

  1. Antenatal care package;
  2. Delivery;
  3. Neo-natal care;
  4. Post-natal care;
  5. Diagnosis and treatment of conditions and complications during pregnancy via outpatient and inpatient services.
    Care for infants.


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