NHIF’s new offer fairly attractive, but can it really manage the fund?

 

By JAINDI KISERO

Truth be told, what the National Hospital Insurance Fund (NHIF) is offering under the new plan is very attractive from the standpoint of a sick person looking for a competitive health insurance plan.

Where else do you get the benefits package the new plan is offering for the new NHIF premiums?

On offer is an out-patient deal giving you unlimited general consultation, unlimited diagnosis and treatment of common ailments, unlimited prescribed drugs, unlimited laboratory tests, and much more.

Mark you, the maximum premium under the new scheme is Sh24,000 a year.

The fact of the matter is the following: If you allow wananchi to enjoy this deal for six months, you will not be able to roll it back.

We must remember that we have a new constitutional dispensation that is going to imbue the ordinary citizen with a bloated sense of entitlement and rights over services, especially what is stipulated as basic rights.

Under the new dispensation, health is a basic human right. But I still think that the new plan is being implemented poorly by the management of the NHIF.

In the first place, the salary brackets on the basis of which the premiums have been set are based on an outdated actuarial study. The rates have been set by a study conducted way back in 2007.

I don’t claim to be an authority on health insurance or actuarial sciences, but in terms of proportionate increases, it is clear that the contribution rates at both the top and bottom ends of the salary brackets as spelt out by the NHIF are just too high.

Clearly, these contribution rates were not arrived at scientifically. Why is the management of the fund in a hurry to implement the new contribution rates without conducting thorough and scientific studies?.

Mark you, the Ministry of Medical Services, with the support of the International Finance Corporation of the World Bank, has just commissioned Deloitte and Touche to conduct a comprehensive diagnostic study on the NHIF.

This is a study involving multiple consultants, finance specialists, actuarial scientists, health management professionals, insurance specialists and economists.

Why can’t the NHIF wait for the results of the study so that it reach contribution rates based on scientific findings?

The case for reviewing NHIF’s contribution rates cannot be gainsaid. It does not make sense to keep contribution rates at artificially low rates in a context where medical costs are rising by the day.

The case for expanding the benefits regime is even stronger. We are not the first to introduce out-patient cover in this region.

Tanzania’s NHIF provides cover for out-patient services.

In addition it pays for you a proportion of your total medical expenses contrary to our situation where the NHIF only pays for you a fraction of your bill for the hospital bed.

But let us not put the cart before the horse. The NHIF must undergo a total overhaul in its management and governance before it can be allowed to handle the type of money it wants to collect from the people.

I have just looked at NHIF’s latest accounts and what is revealed is a thoroughly mismanaged fund.

According to the accounts, reserves accumulated over the years have now reached Sh13 billion. Was this fund created to accumulate surpluses or to pay hospital bills for members?

NHIF collected Sh5 billion in contributions. Out of this, a colossal Sh1.4 billion went into paying salaries with another Sh925 million going towards administrative expenses.

Then there is the issue of corporate governance.

Why does the government persist in treating the NHIF as if it owns this private members club?

All those political appointees on the board of the NHIF should be chucked out and the fund be put under a corporate governance regime similar to occupational pension funds, where the party who collects and keeps the funds is separate from the person who manages and invests the money.

The NHIF is made to play multiple roles – collecting the money, deciding on which hospitals to accredit, verifying and paying. Ideally, the NHIF should be run by trustees.