Public money, private profit, the trouble with privatisation of healthcare

Kenyans hardly seek healthcare in private hospitals not because its posh, but due to limited access to some drugs, treatment, medical expertise and resources, according to a report released in December 2021.

Despite high demand for healthcare, the report revealed that private hospitals largely concentrate on the most profitable areas like surgeries and high-cost curative services, but neglect less commercially viable ones like family planning, routine child immunisations, key vaccinations and adolescent health services.

Though the National Hospital Insurance Fund (NHIF) is a public insurer, it favours the private sector for which it may not have been established to benefit: Out of Sh14 billion the NHIF spends annually on claims in Nairobi, Sh11 billion goes to private hospitals according the report, Wrong Prescription- The impact of Privatizing Health Care in Kenya.

The report by the Economic and Social Rights Centre-Hakijamii, Centre for Human Rights and Global Justice at New York University School of Law (CHRGJ) also indicates that privatisation of healthcare in Kenya negatively impacted on the roll-out of Universal Health Coverage (UHC) across 47 counties.

Indeed, privatization of healthcare is shown to have reduced public health priorities, in turn reducing access to healthcare and pushing more Kenyans into poverty.

The report notes that chronic under-investment in public facilities including lack of sufficient infrastructure, staff and medicine is also buttressed by the government whose “policymakers have explicitly embraced the private sector, providing it with public resources and undertaking favourable policy reforms.”

Though the government has not formally sold off existing public healthcare system, policies favour privatization and sweep across large-scale contracts ranging from public-private partnerships, tax incentives, and expanded national health programs like Linda Mama, which include private health providers-effectively subsidizing private care.

In December 2017, President Uhuru Kenyatta announced improved healthcare through UHC, which was aimed at ensuring equitable access to healthcare, without risk of financial hardship.

To finance UHC, the government was to mobilize finances by increasing enrollment in NHIF.

Piloting was done in Isiolo, Nyeri, Kisumu and Machakos counties with complete roll out across 47 counties by this year, but “the planned expansion of private-sector friendly social insurance through UHC risks exacerbating these problems,” adds the report.

The much-hyped UHC program has been facing bottlenecks, leaving majority of Kenyans struggling to access basic healthcare at a high cost over lack of proper financing mechanism.

Out of 10 million households enrolled under NHIF, those active by May 2021 were only 5.6 million, according to NHIF CEO, Dr Peter Kamunyo, who termed the model of bankrolling UHC as ‘input financing.’

In input financing, commodities are provided for healthcare facilities as well as human resource, and registered members have access to treatment for free with depleted commodities replaced.  

In a previous interview, Dr Kamunyo argued that “the only sustainable model to UHC is to have members who can pay their premiums annually do so, and those who cannot pay, like vulnerable groups, be identified and supported.”

But the report notes that relying on a combination of social insurance and private healthcare providers will see Kenyans continuing to experience problems associated with privatized care, high impoverishing costs, inequality in access and unmet health needs.

The report warns that “expanding coverage through the NHIF instead of investing in a strong public health system is not a small step in the right direction - it’s a step backwards” and NHIF “now pays out far more to private providers than to the public system.”

 According to the report, public health system is best positioned to deliver on public goals, including UHC but “choosing to pursue  UHC  through the  NHIF - rather than  through  the  public health system - will have far-reaching consequences.  It  will  entrench private  actors  and  almost  certainly  result  in  more  public  money  going  to  private  profit.”

The report recommends need for prioritizing on health policies and expenditure, increasing public spending, besides significant improvement on existing public health system to guarantee accessible, affordable, quality care for all Kenyans. 

 Private facilities also charge more for both outpatient and inpatient services: Breast cancer screening was more than four times as expensive as in public facilities while diagnostic procedures were thrice as costly.   

Comparing treatment for four common Non-Communicable Diseases, the report found that private facilities charge more for screening, diagnosing, and treating them than public hospitals.

Other studies and surveys have found that private providers charge higher fees for family planning services, with 77 imposing high fees for hypertension treatment while 78 were far less likely to have information on user fees posted in patients’ view.

Also, private health providers shun critical forms of care with low returns like post-abortion care, care for child malnutrition, tuberculosis diagnosis and treatment,  HIV care and support  and  services  for survivors of violence and sexual abuse, according to a 2018 survey.

 Despite the mushrooming numbers of private hospitals, public facilities serve higher population and in 2018 accounted for 58 percent of outpatient visits, more than half of inpatient admissions, 260 more than for-profit, non-profit, and  faith-based providers combined. 

The report notes that with  adequate  resources  and  oversight, public health system, despite many challenges, “offers far more potential for expanding access to quality healthcare than privatization has shown.”