Sunday, May 20, 2012



By Prof. Anyang' Nyong'o
Minister for Medical Services
Government of Kenya
May 20 2012

Over the last two weeks, the National Hospital Insurance Fund (NHIF) has dominated the news headlines. Along with it has been the parent Ministry of Medical Services which I head.

At the center of this controversy has been the insurance cover for civil servants, the disciplined forces and the police which the Ministry of Public Service contracted the Fund to implement from the beginning of this year. It has been alleged that this scheme has been mismanaged and possibilities of fraud may exist.

Some time last year, the Cabinet approved a program whereby this insurance cover was to be implemented by private sector insurance firms. When the Ministry of Public Service floated the tender, however, the private insurance firms declined to offer services, stating that the amount of money offered for a cover of a family of four was too low for them.

The government's offer was 2850 shillings while private sector players wanted between 6000 to 15000 shillings. The government was therefore left with NHIF as the only other alternative. Discussions then ensued between the Ministry of Public Service and the Fund on how best this scheme could be rolled out. These discussions started in December last year.

About Christmas time last year, the Ministry of Public Service informed the Fund that the scheme had to begin by the first of January since time was of the essence. Doing all it's best the Fund complied. The scheme was hence implemented under great hurry, and it was bound to run into administrative and managerial problems just like the cost-sharing scheme, initiated in our health facilities in 1989, went through such teething problems of implementation until 1991.

In the contract between the Ministry of Public Service and the Fund, it was agreed that the Fund would contract health care service providers to provide out-patient treatment to the government personnel at the rate of 2850 shillings as mentioned above. This would be done on a capitation basis.

The word "capitation" has led to a lot of misunderstanding in the media and among the public in general. It is actually very simple. It simply means that a health provision firm, like Meridian, is given money ahead of time for a fixed period of time to provide out-patient care for a fixed number of the NHIF clients, i.e. the civil servants. Most people undercover their medical expenses with insurance firms in this way.

For example, when you go to buy milk in a super market, you pay for the milk first before you drink it. When you go to buy shoes at a Bata shop, you pay for the shoes first before you wear them. When you travel to London, you pay for the ticket first before you arrive in London a day or so later.

There are, however, a few exceptions: when you eat in a restaurant, you get the service first and then you pay for it; when you go for a hair cut in a saloon, a similar experience occurs. God, likewise, is very generous: he gives you life and then you answer for your deeds on earth after you have enjoyed the life.

But health insurance, like many other insurance arrangements, is very interesting. If you pay 2850 shillings to cover your family for a year and your family does not fall sick during that year, do you claim your money back? Of course you don't! The insurance company simply asks you to pay again the next year if you want to continue to be covered.

There is a risk therefore that both parties to this insurance contract take. The company runs the risk of paying more money than the amount you paid should you fall sick and be covered for more than the premium you paid. You also run the risk of not getting any service if you don't fall sick.

The controversy at the center of this particular civil servants insurance scheme is because an impression has been created that the service providers were supposed to be reimbursed on a case by case basis. Not at all. The contract did not say that. We need therefore to ask ourselves whether NHIF has implemented the contract as was envisaged.

Another misunderstanding is that the service providers were supposed to offer services to civil servants at all their facilities, whether already existing or still under construction. This is also not the case. The civil servants were supposed to choose where they preferred to be treated. The service providers were to give NHIF a list of all their licensed facilities where services were available. Was this really done and are the beneficiaries happy with the arrangement?

Again a lot of misunderstanding arose from the very beginning regarding whether civil servants could or could not change the out-patient facilities from time to time in accordance with their convenience. Both the Fund and the service providers sought to clarify this to the clients and this information has been availed to the media so that the public can be enlightened from facts rather than from fiction.

What needs to be made quite clear is that each service provider was to be given a lump sum of money to cover a lump number of clients agreed ahead of time between the Fund and the service providers.

Any over payment by the NHIF or any false claims by the service providers would, of course, constitute offense. These are the issues that the Caretaker Board will have to look into and clarify to Kenyans.

As the minister in charge of policy guidelines to all state corporations under me, I have sought during the short period of implementing the scheme to ensure that it succeeds since our goal is to give all Kenyans comprehensive social health cover. The Fund has sought to address these issues of implementation as they arose.

Both my Permanent Secretary and the Director of Medical Services sit on the Board of the NHIF, and both have been diligent in attending Board meetings. Since the DMS is the Registrar of the Medical Practitioners and Dentists Board which licenses health practitioners and facilities, I believe he has done his best to guide the Board in terms of quality assurance among the service providers for this scheme.

I have been extremely disturbed by allegations that I influenced the choice of service providers. This could not have happened since I was not at the Ministry at that time. In any case, procurement procedures in government are now very clear and there are competent government institutions that should oversee these procedures in every ministry.

Let it be noted that at the time the Ministry of Public Service brought in the NHIF to implement this scheme, I was away in the US for my health review. By the time I came back on 6th of January, 2012, the scheme had already been rolled out. My colleague Hon. Dalmas Otieno, Minister for Public Service was then acting as Minister for Medical Services and did a good job running both dockets at that time. I supported his initiative and took over where he left on my return.

In William Shakespeare's play "Julius Caesar", the ordinary citizens of Rome got very angry when their ruler, Julius Caesar, was assassinated by some conspirators. They therefore organized to move around in town looking for the assassins so as to deal with them. When they met a man called Cina, they asked him whether he had any notion who the assassins were. He denied but the mob insisted that he had to be in the know otherwise he had no reason to be walking about in town at that hour of the night. On protesting that he was only a poet he could not be associated with assassins, the mob decided to lynch him for his bad verses anyway.

in like manner, I have seen sections of the press calling for my resignation because I must have aided and abetted wrong doings at the Fund over this scheme whatever the facts show. Some have even gone as far as saying that time has come "to deal with me anyway" due to other positions I hold in public life. I would not like to face the fate of Cina the poet; it is neither just nor fair.

Finally I would like to appeal to Kenyans to understand that this civil servants scheme is different from the normal health insurance cover that NHIF has been giving since 1966 for in-patient care for all contributors. That scheme continues separately from this particular one. Its membership, according to the current Economic Survey, has increased tremendously over the last two years. Meaning that Kenyans are becoming more aware of its advantages. Makurueini Constituency leads all constituencies in the number of residents rolled as contributors to the NHIF.

Over the last three years, we have been working on giving contributors both in- patient and out- patient health cover. This requires increasing the rates which were last revised 20 years ago. As soon as we can end the controversy over these revisions, the rest of Kenyans will get the kind of cover the civil servants are now getting.

Members of Parliament know how urgently we need a universal health care coverage in this country. We have carried out A Strategic Management Audit by the International Finance Corporation (IFC) and Delloitte which has shown that NHIF can role out such a service while undertaking certain management reforms to-day.

The feed back that we get is that civil servants are very happy with this scheme. They would like all problems sorted out so that Kenyans can all move together towards universal health coverage. END