Eyes on troubled NHIF as new boss takes office

All eyes are on the recently appointed National Hospital Insurance Fund (NHIF) chief executive officer, Dr Peter Kamunyo Gathege, as he takes up his new job in which he is expected to lift the cash-stricken health insurer.

The NHIF top position, much like a similar position at the National Social Security Fund (NSSF), has been one of the most insecure assignments for those who dare to desire it, as conflicting interests continuously oil the revolving door of the CEO’s office.

The new CEO is expected to assume office on Tuesday this week.

But his appointment is already raising questions regarding transparency and the competitiveness of the process, as Dr Gathege was neither interviewed nor shortlisted by NHIF board.

A petition is currently pending in court to invalidate his appointment. Activist Okiya Omtatah has filed a lawsuit, accusing the board of “handpicking” Dr Gathege.

In a case filed at the Labour Court under a certificate of urgency, Mr Omtatah accuses the NHIF board of abdicating its responsibility by appointing Dr Gathege without subjecting him to a “fair, open, competitive, merit-based process that is open to public participation”.

NO INTERVIEW

Mr Omtatah argues that there is no record that Dr Gathege ever attended the interview held by the board and that he is not among the top three successful candidates, whose names were sent to Health Cabinet Secretary Mutahi Kagwe after the first interview whose results were abandoned without explanation.

“Without cancelling the initial recruitment process, which was responsive, the board re-advertised the position on February 24 and changed some of eligibility requirements by deleting the expression ‘any other relevant business field’ and replacing it with the word ‘medicine’.

"The board then abandoned the second recruitment process and proceeded to handpick and appoint — Dr Peter Kamunyo Gathege — as the new CEO for the NHIF,” Mr Omtatah states in his petition.

Mr Omtatah is also questioning the NHIF board’s decision to forward the names of the shortlisted candidates in the abandoned interviews to the Health Cabinet secretary.

“The NHIF Act was amended by the Statute Law (Miscellaneous Amendments) Act, No. 18 of 2014 to remove the power of the Health minister to appoint the CEO.

“Hence, the petitioner posits that the board deliberately used the old, unamended 1998 Act to delay the appointment of the CEO by referring the three names to the minister for appointment,” he says in the petition currently in court.

Dr Gathege, a healthcare executive, takes over from Nicodemus Odongo, who has worked in acting capacity since 2018 after his predecessor Geoffrey Mwangi was arrested and charged with conspiracy to defeat justice, disobedience of a lawful order and loss of Sh500 million at NHIF.

GRAFT CASE

The board has had to advertise the position twice, having abandoned the first advertisement though it had told the Parliament’s Health Committee that the recruitment process, which started with advertising the vacancy in July 2019, was responsive.

Dr Gathege was appointed after the second advertisement in February, though investigations by the Sunday Nation reveal that the appointee was not one of the candidates interviewed and that he was not shortlisted for the job.

“Dr Gathege brings to the Fund a wealth of professional experience with an extensive background in senior leadership position at pioneering innovative global market leaders in the field of insurance brokering and medical scheme administration and fund management,” states the appointment notice in the dailies.

Mr Odongo, having acted as CEO for two years, applied for the job but was not considered by the board, chaired by Ms Hannah Muriithi.

Mr Odongo continues as the director for strategy, planning and marketing at the insurer, as he never relinquished the position while he was acting as the CEO.

“When acting you don’t relinquish your substantive position. I will go back to my position,” Mr Odongo told the Sunday Nation.

Former CEO Mwangi was arrested in ongoing corruption investigations in which NHIF is reported to have lost Sh93 million after it emerged that a 23-acre parcel of land it claimed to have bought in 2002 actually belongs to a Maasai group.

CASH CRISIS

Dr Gathege takes up his appointment already burdened with questions about the process leading to his appointment.

But what awaits him is a heavy load: NHIF lost Sh6 billion in reserve funds and is facing a looming cash crisis as civil servants seek alternative medical insurance providers.

An NHIF insider at the top level of management estimated that more than Sh5 billion of the reserve funds could have been used on printing the AfyaCare cards used in the four counties where the Universal Health Care (UHC) project was piloted.

The Health ministry is also said to have defied counsel not to create a parallel system to NHIF, as UHC was sold as a “health system strengthening initiative”. But the insurers’s executives have denied these allegations.

A project of that magnitude, financially, needed policy backing and Cabinet approval, but neither took place.

The insurer already has systems to register and print members’ cards, but the ministry introduced AfyaCare cards that were to be printed for the UHC package.

Interestingly, the four counties are yet to get the cards. At Nyeri Referral Hospital, clinicians did not get the cards on time and have to log into the M-Tiba system to see whether a patient is registered.

In Kisumu, some of the money did not reach the hospitals that have been implementing the programme.

EXPERIENCE

A report by the Health Financing Reforms Expert Panel, set up by former Health Cabinet Secretary Sicily Kariuki in 2019 to transform NHIF, returned a grim finding that the insurer risks collapsing in two years unless the proposed new statutory rates President Uhuru Kenyatta halted are implemented.

The panel stated that the insurer may start running deficits from as early as this year.

The report NHIF’s administrative costs remain way too high, which also reflects inefficiencies in the system, with the main expenditure being staff costs, comprising 54 per cent in 2017/18.

Dr Gathege is a healthcare executive with 21 years’ experience, ranging from medical insurance, healthcare supply chain and strategic purchasing.

Until his appointment as NHIF CEO, he was the CEO at MedSource Group Ltd a company that procures medical supplies on behalf of pharmacies, hospitals institutions and in-house clinics, dispensaries, clinical laboratories, and health networks.

He has been a non-executive board member at the Kenya Healthcare Federation and the East Africa Healthcare Federation.