Experts warn SHIF deductions do not tally with expected benefits

National Hospital Insurance Fund building, Nairobi.  [File, Standard]

Tariff benefits versus deductions under the new health scheme continue to spark debate.

Questions have been raised regarding the scheme’s effectiveness in delivering quality healthcare as the Kenya Kwanza administration moves towards the realisation of Universal Health Coverage (UHC).

Many Kenyans and experts believe that the deductions may not correspond to the services provided under the Social Health Authority (SHA). This concern could affect registration for the SHA, which is set to officially roll out on October 1, 2024.

Mr James Kamau, a health economist, claims there has been no proper evaluation of market rates. He questions the allocation for dental services and deliveries, saying the amounts are insufficient.

Under the scheme, dental services are capped at Sh2,000 per household. Specific allocations include Sh650 for tooth extractions, Sh750 for dry socket debridement, and Sh1,000 for atraumatic restrictive treatment. Other allocations include Sh1,000 for suturing, Sh300 for screening and consultation, and Sh1,200 for treating gingivitis and periodontitis through scaling and polishing.

For deliveries, the scheme allocates Sh11,200 for normal deliveries and Sh32,600 for Caesarean sections (C-sections).

“Allocating Sh2,000 per household and the rates for deliveries are insufficient,” says Mr Kamau. He notes that the market rates for hospital deliveries start at around Sh80,000, making the scheme’s provision seem minimal.

The Sh32,600 rate, Kamau adds, would only cover a medical officer with one or two years of post-internship experience. At Kenyatta National Hospital (KNH), C-sections range from Sh100,000 to Sh150,000 in the private wing, and up to Sh50,000 in the general wing. Currently, NHIF remits Sh30,000 for C-section deliveries.

Additionally, sources note that pricing for primary healthcare services at Level 2, 3, and some Level 4 facilities is too low for general outpatient, optical, and dental services.

“In the absence of co-pay options for primary care, it will be challenging for non-state healthcare providers to offer these services,” says one source.

Prof XN Iraki, an economist at the University of Nairobi, questions whether the government conducted market research, urging the release of stakeholder consultation results.

“The charges do not seem to align with the benefits, especially when benchmarked against local and global best practices,” Prof Iraki told The Standard. Mr John Juma, another health economist, stresses that there must be a correlation between contributions and the services provided under SHA. He highlights that the 2.75 per cent contributions seem higher than what is being offered.

“Were these figures informed by market rates? No. People may need to pay additional costs once their cover is exhausted or if the cost exceeds the limits set by SHA,” Juma warns. He adds that the Ministry of Health should have used data and evidence when designing the benefit package.

“How did they determine Sh300 for low-income earners? How did they arrive at Sh11,000 for normal deliveries? Kenyans have not been informed,” Juma asserts.

However, SHA Chairman Abdi Mohammed insists market research was conducted before setting the tariff benefits. The benefits, he says, were based on projected collections versus risks, sustainability, and prioritised needs.

Dr Mohammed points out that the benefits suit public hospitals, where most Kenyans seek care. Even with criticisms of the dental and optical allocations, he emphasises that these services were not previously covered by NHIF.

“NHIF allocated Sh60,000 annually for dental services, but only government employees benefited. The rest of the contributors had no access to dental or optical care. This is a start,” says Dr Mohammed.

He further explains that SHA is a universal and social health insurance scheme that pools risks and funds from the entire population to prevent catastrophic health expenditures.

“This is the essence of social health insurance,” he notes. He explains that under SHA, someone paying Sh300 monthly contributes Sh6,000 annually, while those deducted Sh5,000 monthly pay Sh60,000 per year. The money is pooled to create an equitable benefit package.

“The principle is to pool funds together, and the government steps in to assist the poor. The focus is on catastrophic health risks, and we prioritise those,” he says.

Under SHA, a person contributing Sh300 monthly is guaranteed three dialysis sessions per week at Sh10,650 per session. Without this equity, the individual might not receive care, he explains.

“The poor will benefit the most from SHA. Currently, those earning Sh40,000 and below pay more to NHIF. Under SHA, their deductions will be lower—this is equity. A lower earner pays less, while a higher earner pays more,” Dr Mohammed stresses.

SHA has also standardised services across all hospitals.

Prof Iraki adds that SHA has the potential to transform healthcare, calling it a “game changer” for the nation’s health system. However, he cautions that it is still a work in progress.

 “No one will receive extra benefits over others. Under NHIF, government employees had superior benefits and could access more services. That will no longer be the case under SHA,” says the SHA chairman.

Regarding deliveries, he notes that NHIF previously allocated Sh2,500 for normal deliveries and Sh5,000 for C-sections under the Linda Mama programme. These amounts have been increased under SHA.

He further clarifies that NHIF only covered bed costs, but under SHA, even those in private hospitals will receive Sh32,000 in benefits.

“All mission hospitals, and the majority of private hospitals, are content with the tariffs. Around 70 to 80% of rural hospitals are satisfied. Those unhappy are mainly urban dwellers seeking luxury care,” notes Mohammed.

Dr Brian Lishenga, National Chairperson of the Rural Private Hospitals Association of Kenya (RUPHA), says the association has allowed the Ministry of Health to implement SHA.

“Our current approach is to let the Ministry implement SHA and then assess the results,” says Dr Lishenga.

He adds, “Ultimately, Kenyans will determine whether SHA is working for them or not.”

A private hospital owner, who requested anonymity, questioned the lack of budget allocation for primary healthcare, raising doubts about the payment of services in the package.

“So even the services included in the package might not be guaranteed payment,” says the source.

Amid increasing healthcare demands, forcing Kenyans to spend more, Prof Iraki argues that SHA’s funding model will be particularly helpful for low-income earners.

“The top earners will subsidise the poor. Ultimately, it comes down to how well the programme is managed. The rich subsidise the poor, giving them access to better and timely medical services,” he says.