Expanding coverage to the formal and informal sectors in Kenya
An interview with Mr. Richard Kerich, CEO of Kenya's National Health Insurance Fund
News of Kenya’s exciting and aggressive plans to expand universal health coverage (UHC) began making headlines in early 2012. The National Health Insurance Fund (NHIF) announced a new partnership with the Kenya National Union of Teachers – one of the largest unions in Kenya – whereby NHIF will provide an affordable and comprehensive package of in and out-patient benefits to more than 1,300,000 teachers and their family members.
In addition, NHIF is offering unlimited out and in-patient benefits for approximately 1,100,000 civil servants and their family members beginning on January 1, 2012. The NHIF is also seeking to extend the unlimited in and out-patient care benefits to the informal sector in a phased out manner. The first phase will start at the end of March and will cover some parts of the country.
To gain a better understanding of the reforms that are currently taking place in Kenya, we recently sat down with Mr. Richard Kerich, CEO of the National Health Insurance Fund (NHIF), to learn more about NHIF. Below, Mr. Kerich provides an overview of the history of NHIF and the expansion efforts that are currently underway.
The evolution of UHC in Kenya
The concept of national health insurance was formally introduced in 1966 to provide health care to the formal sector. In 1972, the informal sector was incorporated and that was the first time, according to the ILO, that the term “informal sector” came into existence. Free healthcare for the formal sector continued until 1988 but had to be abandoned due to the escalating costs. The government tried unsuccessfully to introduce user fees however the political implication was far too explosive.
In 2004, the National Social Health Insurance Fund Bill– which effectively laid the ground work for NHIF – was introduced and subsequently passed through Parliament. However, the drafters of the Bill were unable to convince implementers, or even the President, that the scheme could be financed.
Since that time, we have been working with development partners to identify appropriate funding mechanisms. We have a standing health financing committee comprised of representatives from the government and our development partners.
When I became CEO in 2006, NHIF covered close to 60,000 families. We embarked on an aggressive recruitment campaign and today we cover close to 600,000 informal sector families and 96 percent of the formal sector.
Action plan for achieving UHC
Generally speaking, there are two issues that we must overcome to achieve UHC. The first is to make sure that the coverage – as far as benefits and costs – are competitive. We emphasize that our inpatient benefits package and services are comprehensive and now we are introducing out-patient benefits to the two biggest formal sectors: all civil servants and teachers. Combined, these two unions account for nearly forty percent of the working population, 600,000 individual beneficiaries, 2.5-3 million Kenyans if you include their families. We want to give them comprehensive out-patient services that cover everything excluding elective surgeries. Otherwise we will cover everything including pre-existing conditions.
Integrating unions into NHIF
We began integrating the Kenya National Union of Teachers as well as several smaller unions into the NHIF on January 1st. To date, we have fully integrated all the teachers and we hope to integrate the smaller unions by March 1st. As a result of the comprehensive package we are offering for the formal sector workers, we are now seeing an increase in demand from the informal sector for similar services. We need to find the right balance between cost and providing a basic package that people actually want.
Challenges to expanding coverage
There are a number of obstacles to expanding coverage in Kenya. Number one, our policies are not very strong especially if you look at the policy framework. We are still operating under a framework that was established in 1994 and expired in 2010. We now have an official mandate through 2013, but the sector specific policy is lacking which I suspect will cause an issue now or in the very near future.
Operationally, there are a number of areas where we have challenges. First, the ratio of health workers to the population is still very low. Our second problem is the equipment being used in most of the facilities. Either the workers are not trained to operate the newer equipment or the facility does not have access to modern equipment.
For implementation, at times we have problems with political interference. At the end of the day, the politicians “blue print” NHIF activities. While our strategic plans are very clear we still have to get approval every time we want to make hard or far reaching decisions. For example, we would like to change our contribution rate, which has been capped at $3 US dollars for the past 25 years. Naturally this cap presents a problem when everyone is screaming for expanded benefits. This cap needs to be changed and we have tried, but we also know that it will take a long time. To get around it, we negotiated directly with the unions to determine pricing and contribution rates based on the benefits that they wanted. If you are interested in achieving UHC you cannot avoid using the law to compel contributions and membership.
Advice for other countries interested in pursuing UHC
To achieve UHC there must be strong governing documents and the population must be compelled in some way to contribute.
All of your systems must be made to support the introduction of UHC: facilities, human resources, and other infrastructure which includes information technology. Even seemingly unrelated things like roads need to be made properly to facilitate access and delivery of care. Lastly, of course, would be political will. Even if you have all of the other things it won’t matter unless you have political will.
The Kenyan citizens are demanding universal health coverage. But the ones that are demanding it don’t have access to the tools to make it happen. They rely on the policymakers to help them and unfortunately sometimes those policymakers are not acting in their best interest.