Health > It is hard to remember which one of the fund’s many scandals is the most memorable

On Thursday, May 3, 2012, the National Hospital Insurance Fund (NHIF) chairman, Prof Richard Muga, called a press conference to address a grave issue.

Held at the NHIF headquarters, he wanted the board to suspend the CEO, Mr Richard Kerich, who had served since 2006. But half the board walked out and his vice-chairman, the Kenya National Union of Teachers secretary-general Wilson Sossion, would interrupt his address moments later.

“I have called you here this afternoon to announce the suspension of the CEO and five other officials, in view of the latest development and the complaints we have received on the payments to non-inspected clinics and other issues,” Prof Muga said.

Shorlty, Mr Sossion interjected: “He has no authority to make such a decision without proper consultations with the members. Therefore, what he has told you is his position, which is not binding.”

A parliamentary committee had investigated the civil servants’ health scheme, where NHIF’s top managers had paid a private company running a chain of clinics the insurer had not seen or inspected.

In the next four years, Mr Kerich would face charges of conspiracy and abuse of office.

He was acquitted in October 2017, but the events surrounding his dismissal underscore the structural problems facing the fund.

In the press conference, what was playing out before journalists was a broken board, but NHIF’s true problems were, and have always been, endemic.

Dysfunctional board

Within minutes of the press conference, the then-Medical Services Minister Prof Anyang’ Nyong’o reinstated Mr Kerich and suspended Prof Muga.

A couple of days later, the acting Head of Public Service Francis Kimemia suspended the entire board, including Prof Muga and Mr Kerich. But 24 hours later, Prof Nyong’o reinstated the board and accused Mr Kimemia of trying to micromanage the health sector.

The following Monday, then- Prime Minister Raila Odinga suspended the board and appointed a caretaker committee.

Established in 1966 as a department in the Ministry of Health, the fund was supposed to be a central social safety net for Kenyans. At the time, most of the country’s healthcare system was under the government.

Contributions were statutory until 1972, when NHIF began taking in voluntary contributions.

The idea behind it was to provide health insurance to as many as Kenyans as possible. “Funds per person for health provision remained stable and the number of hospital beds nearly doubled between 1970 and 1978,” Charles Hornsby writes in Kenya: A History Since Independence.

“Statistics for doctors per 1,000 people were good, though 90 per cent of these doctors practised in the urban areas,” he adds.

But in its first three decades, NHIF spent time navigating not just the political changes and interests, but also its own survival, especially in the 1980s and 1990s.

From 1965, as part of the first President’s ‘poverty, disease, and ignorance’ tripartite of goals, health fees were removed so that anyone who needed healthcare could afford it by the basic right of being Kenyan.

But this was not sustainable without a commensurate growth in the taxpayer base — the population was just 9.6 million, with a minute taxpaying population picking the tab, with the help of donors.

The fund was meant to help bridge this gap. Like many of Kenya’s parastatals and government institutions started in the 1960s, it was also led by a white man, R. W. Midcalf. Mr Midcalf served as CEO for three years, followed by eight men who served an average of four years each until the end of the millennium.

But only Mr Midcalf’s successor, D.E. O Asiko, served anything longer than six years.

The CEOs’ list now has 14 men, only one of whom had a medical background, ending with Mr Geoffrey Mwangi’s tenure, which started in 2016 and ended in 2018.

Mr Mwangi, a former altar boy from Nakuru, ended up like Mr Kerich — being dismissed and prosecuted. Since then, the critical public safety net has been without a CEO, as the board looks for a replacement.

When Mr Mwangi first moved from Nakuru to Githurai, in 1998, NHIF was also transforming from a department in the Ministry of Health into a parastatal, a quasi-public body structure that has the skin of the private sector, but is in all important aspects run by the government. The post-1998 structure unravelled because of the same safeguards it was built on — the board chair is appointed by the President, the CEO by the Minister for Health.

That structure explains the tug-of-war between Prof Nyong’o and Mr Kimemia in May 2012, as each tried to use their constitutional powers to determine who sat at the high table of the board. Their differences were primarily political, Prof Nyong’o was an ODM minister while Mr Kimemia was in President Kibaki’s court.

The board itself is structured, with representatives from the teachers, workers and farmers’ unions, the employers’ federation, medics, Christian health providers and the association of insurers.

At the social level, these duels not only translated to a house in disorder but a lack of empathy by the political class to and for the thousands of civil servants who were suffering amid the boardroom fights. The scandals of the last two decades have been hard to keep up with, and increasingly seem and sound the same.

It is difficult to remember which one of NHIF’s many scandals was the most memorable.

Whether it was the ambulance scandal of the early 2000s, or the loss of money in bank collapses, or the billions lost in the 2000s and 2010s in different schemes.

Or the story of Frederick Sagwe Onyancha, who frequently flew in a chopper from one of his eight town houses in Athi River to Wilson Airport, to beat traffic. The details have become increasingly hazy, as the billions involved have increased, and the ways money meant to insure the health of millions of Kenyans has found its way into other wallets.

While NHIF is still a critical social safety net, it has not evolved to meet the needs of Kenya’s ageing boomer and independence population, or its younger populations. The main issue for the first three decades, for Kenyans outside the boardrooms, was whether they would need to pay to access healthcare.

‘User’ fees disappeared in 1965, reappeared after the first structural adjustment programmes of the early ‘80s, disappeared again in 1990, and reappeared a year later. The history in the 30 years since has pretty much been the same: With each government tweaking the health coverage model in its own image.

For example, the first Kibaki government, riding on a wave of social safety net programmes, abolished fees for the bottom of the socioeconomic pyramid, argued about a new programme — which passed in Parliament but Mr Kibaki did not assent to — and allowed, again, voluntary contributions.

None of these solved the basic problems, which were primarily about who would pay for healthcare services and drugs needed by millions of Kenyans who could not afford to pay out of pocket.

The second Kibaki government’s lasting manifesto, the Vision 2030, envisioned a future where we would now be affordably getting healthcare services from private providers primarily, but with enough government protection.

It was the basis for the widespread privatisation of the health sector in the last decade, where the Ministry of Health has progressively pulled back from providing services and left the responsibility to private equity-owned healthcare facilities.

NHIF’s many weaknesses stem from these structural weaknesses.

It is a highly political parastatal, with many interests, policies and plans pulling from different ends.

The national insurer now pays more than a quarter of its bills to 10 hospitals, only two of which are public, and one a mission facility. While the Kenyatta National Hospital leads the list, the government has been reducing its footprint in the country’s big facilities and left services to the private sector.

The story of Nairobi Women’s Hospital, which involved unnecessary admissions, tests, and other measures to increase revenue from insurers — who collectively account for more than 70 per cent of this particular hospital chain’s revenues — is a case in point of where Kenya’s line of ghost clinics, system and social safety net programmes are.

The duels in early May 2012 were part of multiple warnings that without a proper structure, rooted in our common desire to be treated properly, and without having to sell assets for a common cold, the private sector would go ahead and game the health insurance system.

Unlike other sectors of society, it didn’t matter who did it, because any such story would mean a Kenyan in need of healthcare had been taken advantage of.

2 years

Tenure of Mr Geoffrey Mwangi, who was hired in 2016 before being hounded out on allegations of corruption

1966 Year

National Hospital Insurance Fund was founded.

It has had 14 chief executives since, and only one of them had a medical background