By STEVE MBOGO
Posted Wednesday, October 6 2010 at 00:00
Since the government announced the new rates for the National Hospital Insurance Fund (NHIF), the insurer has never known peace while critics have never been sick of finding fault with higher contributions.
While contributors, led by the workers’ umbrella body Central Organisation of Trade Unions (Cotu), have said they were not consulted, health experts are now warning that new NHIF plan will squeeze the already resource-thin health institutions to limit, translating into poor care for the insured.
Pressure to make profits by the hospitals that partner with the NHIF under the new outpatient scheme could force them to offer sub-standard services, raising queries about how the funds will be audited.
“The problem [with this financing model] is that the only way the hospital can make money is to hope that no one covered falls sick and if they do, they don’t spend much. So they tend to give very poor services to save costs,” said Mr Peter Nduati, the CEO of Resolution Health East Africa.
The proposed scheme will be rolled out under an arrangement where NHIF pays monthly rates to a hospital to treat a specific number of insured.
The hospital is required to manage the funds while keeping the surplus as profits; institutions that exhaust the payments will thus make a loss.
This, the experts say, will be open to abuse in weak audit, pointing out that there will be temptation to spend less with eyes on profits, leading to poor services.
Attempts to get comments from NHIF on tightening the audit were not successful.
The experts said while the method NHIF proposes to adopt is the best for large-scale healthcare financing, the Fund must develop treatment standards that must be followed by all its service providers.
“We don’t believe that capitation will work as the service levels will be compromised,” he said.
Under capitation, a system that NHIF will use under the controversial new rates, a fixed payment is remitted regularly to a medical provider for an enrolled patient.
This model is used across the world and Kenya is among the first countries in Africa to use it in national healthcare plan.
Development finance group International Finance Corporation advocates for this system of health insurance to benefit the masses with diverse income levels.
Dr Edward Rukwaro, the general manager of the AAR Healthcare Ltd, is one of the consultants who advised the NHIF to adopt this model of financing based on the pilot project carried out in Mumias and Nairobi.He said the model is suitable for the inpatient services because the insurer, in this case NHIF, transfers risks like fraud to the hospitals.
“But it requires NHIF to have an audit team to check on quality of services being offered. It must invest in the design of a quality treatment model and train doctors, nurses and laboratory technicians on the same,” he said.
He said under poor observation, hospitals would look for cheaper options when faced with decisions on procedures like imaging.
“NHIF should have treatment procedures for every ailment, similar to the one used by the private health service providers to manage outpatient services,” he said.
There are concerns that some hospitals will look for low-priced medicines whose quality may not be assured in rush to beat the capped average spend allocated to every member.
In the new arrangement, NHIF has a right to automatically cancel a partnership with a hospital that offers poor services.
The allocation for each member will be based on the results of a pilot that had 180,000 participants in Nairobi and 20,000 in Mumias over a period of nine months.
Each participant was allocated Sh2,000 to pay for medical services.
However, half of the patients were to pay for services on demand while the other was financed through monthly contributions.
From the study, 73 per cent of those in out-of-pocket system exhausted their allocation after the first visit, said NHIF.
Those who placed the money in a pool were able to access medical care at the same fee per patient and made several visits.
“This is why we have chosen this as a method of rolling out the proposed changes,” said Mr Richard Kerich, the CEO of NHIF. “It is easier to administer and protect the service providers and the patient from the financial disaster.”
The new method of financing will mean that doctors, clinical officers and nurses that have first contact with the patient have the skills of managing the treatment costs.
Although not all NHIF members will get sick within one month, those managing the service will work on the assumption that every contributor will get sick during the month.
It was not clear if this cost would be pegged to the Sh2,000 that was used during the pilot.Private insurance companies estimate that it costs a maximum of Sh2,500 per outpatient visit in middle level hospitals, particularly those that use the utilisation management in treatment procedures.
The task for hospital managers will, therefore, be to ensure that there is no over-utilisation of the outpatient services and fraud through the sharing of NHIF cards with non-members.
“Some hospitals are already working on this model of managing costs but others will surely require such skills,” said Ms Lydia Kibaara-Nzioki, head of medical business at the Jubilee Insurance.
She said enlisting hospitals to manage such funds was the right decision as it would help in developing healthcare financing, quality and access because it will help build skills.
Private insurance companies have also hailed the plan, particularly considering they have been victims of fraud under the outpatient cover.
“It will remove the opportunity for fraud completely,” said Ms Kibaara-Nzioki.
Mr James Osoo, the head of Patient Care at the Mater Hospital in Nairobi, said the recent directive by the Government to stop training of specialist doctors through scholarships will work to the disadvantage of building healthcare management skills in Kenya.
“The private sector is training its specialist doctors frequently; so, what happens when the Government stops yet most people will seek services from public hospitals?”
Mr Osoo said NHIF should invest in building service utilisation management skills within its structures and in hospitals.
It must develop a framework for managing costs that can be used by hospitals in the meantime.
“There should be an audit of services offered by partnering hospitals in relation to the amount of money NHIF is paying for one member, otherwise we may end up with people setting up clinics for purpose of milking the fund.”
A model that uses information technology has been suggested by some experts.
It will require hospitals to invest in commercial software or what is known as Open Source software.
Mr Kizito Makatiani, the managing director of Turnkey Africa, which develops software for insurance companies, said a utilisation management software for a middle level hospital will cost a minimum of Sh10 million and the costs can shoot to more than Sh100 million depending on the solutions required by the user.He, however, said there is also opportunity for hospitals to use open source software, which may be cheaper but still requires the hospital to hire a technical team to tailor it to the required solutions.
NHIF increased rates from a maximum of Sh320 per month to Sh2,000 per month for people earning monthly gross salary of Sh100,000 and above.
Those earning more than Sh50,000 gross salary are supposed to pay Sh1,500 per month, up from Sh320.
Workers earning less than Sh5,999 per month will pay Sh150 per month while the self employed will pay Sh500 per month.
Through Cotu, workers have rejected the proposed rates, saying it was not their responsibility to ensure the poor masses were getting treatment.