The Sh7 billion medical scheme for civil servants is in jeopardy after private and faith-based hospitals said they will not treat the close to 231,000 members and their families in an emerging dispute over new contracts.
Documents acquired by the Sunday Nation show that the National Hospital Insurance Fund (NHIF), which covers civil servants and employees of the disciplined forces under the scheme, altered their contracts, thereby exposing unsuspecting members.
A letter from the Union of Kenya Civil Servants to Devolution Secretary Anne Waiguru and Principal Secretary Juster Nkoroi explains the extent of the problem afflicting government workers, whose medical allowances are paid to NHIF to cover the insurance.
“Since September last year, a number of private facilities have withdrawn their services, blaming NHIF for changing the contents of the contract without involving the service providers. We drew the attention of the ministry and that of NHIF on November 7. The Association of Private Hospitals, through their lawyers, have threatened legal action against NHIF,” said the union’s secretary-general Tom Odege in the letter dated January 14, 2014.
According to documents from some health facilities the NHIF, through its latest contract, allegedly whittled down the insurance cover from Sh2,850 to Sh750 annually for each member, which the institutions claim is too little.
Mr Odege called on the government to end the deal with NHIF to salvage the situation. “NHIF has failed and will never transform no matter what. The contract should be terminated. We will not watch as NHIF plunders our members’ money while they languish in disservice.”
The documents further reveal that the medical scheme has technically ground to a halt despite the government paying NHIF Sh7 billion to cover its employees in the 2013/2014 financial year.
“A spot check in some facilities revealed that out-patient services to the members have failed while in-patient cases are being subjected to the social scheme where the insurer pays for bed only,” said Mr Odege.
“This contradicts the contract, and we are wondering why the government continues to pay billions for the cover,” says Mr Odege.
NHIF runs two unrelated schemes the social scheme and the civil servants and disciplined services medical cover.
Under the social scheme, every worker in Kenya is by law required to contribute money to NHIF towards admission in hospitals.
The civil servants and disciplined services medical scheme is a separate cover, introduced in 2012 between the union and the government, to cover civil servants and members of the disciplined forces instead of paying them medical allowances of between Sh375 and Sh2,400.
The government settled on NHIF to provide the cover, and the first contract was signed between the government and NHIF in 2012.
However, the scheme immediately ran into trouble following claims of corruption. The government is currently engaged in a court battle against Meridian and Clinix hospitals.
Despite the cases, the government signed a new contract with NHIF in July 2013. Subsequently, the latter signed fresh contracts with health providers.
Apart from Sh4.2 billion paid to NHIF in 2012, the government went ahead to pay NHIF Sh7 billion. The contract sum went up by Sh2.5 billion after air rescue was introduced to cover members of the disciplined services.
“There was a lot of politics in 2012 when the scheme started. With the appointment of the new CEO last year, we thought things would change. We know that there are managers who are working against the scheme,” union deputy secretary Jerry ole Kina said.
“We want the scheme to work, but if NHIF cannot execute it we will look for an alternative cover. We have information the police service is searching for an alternative provider,” said Mr Kina.
Contacted, NHIF chief Samuel ole Kirgotty said the Fund is determined to make the scheme work. “There are challenges. However, we are determined to address them and make it succeed. I have been here for a year and I am impressed with what the Fund has done. As for those officers who would wish to frustrate the scheme, they have been put on notice. If we get a complaint, we will investigate it to its logical conclusion,” said Mr Kirgotty.
Mr Kirgotty said the biggest challenge facing the scheme are the low premiums.
“I have advertised for fresh actuarial tenders. Six firms have already made bids. We want to study the scheme and the premiums. We also have done our own studies and realised that the premiums are very low,” he said.
Mr Kirgotty also said the scheme was hurriedly implemented. “There was little preparation and consultation between fund stakeholders and providers.”