KENYA—The Kenya Healthcare Federation (KHF), a Health Sector Board of the Kenya Private Sector Alliance (KEPSA), has expressed concern about the present issues facing hospital providers in the NHIF ecosystem.
In a statement, Dr. Tim Theuri, Chief Executive Officer of KHF pointed out that discussions with the National Health Insurance Fund (NHIF) over the last year have revealed a poorly capitalized organization, and that the current state of low payouts implies their members are facing the impending collapse of healthcare.
NHIF contributes significantly to Universal Health Coverage (UHC) in Kenya and ensures access to high-quality health services.
The federation, which represents private healthcare providers that account for 54% of the country’s current hospital bed capacity of 94,125, uses a variety of financing models for healthcare services, including Social Health Insurance Funds (SHIFs) such as NHIF, membership programs, and contributory funds.
KHF also stressed the critical importance of a steady flow of financing from contributors to healthcare providers, noting that NHIF payment rates have fallen below the real cost of service delivery, posing an existential threat to the healthcare system.
Furthermore, the statement adds that many healthcare professionals, particularly those located outside large urban areas, rely primarily on NHIF reimbursements.
Approximately 57.7% of providers have yet to receive capitation for managed schemes, leaving the industry owing more than Ksh 20 billion (US$145,424 million).
This deliberate delay in payments on approved claims constitutes an illegality and breaches contractual terms, leading to widespread defaults on supplier credit, payroll, rent, and other essential obligations, pushing many providers to the brink of insolvency.
Moreover, emerging tax policies have proven ineffective because unrealized revenue is taxed before payment is received, further straining cash flows. Additionally, the proposed deployment of e-TIMS will require providers to pay tax on claims before they are even received.
The situation has been worsened by the significant depreciation of the Kenyan Shilling since the current NHIF contracts were signed, which dramatically increases the cost-of-service delivery due to reliance on imported medical supplies as NHIF reimbursement rates have remained fixed, putting a strain on providers.
Current NHIF reimbursement rates are also insufficient to cover fixed overheads such as rent and staff salaries, jeopardizing service quality as providers struggle to acquire necessary supplies and equipment.
Furthermore, the current insurance mechanism, in which the onus is completely on NHIF in the event of nonpayment, creates an unsustainable position.
The federation is particularly concerned about NHIF’s present performance and reimbursement rates, which discourage new investments in healthcare facilities and human resources, a significant bottleneck in reaching UHC.
Moving forward, the federation stated that its members were considering requiring Kenyans to agree to be financially responsible when signing informed consent. They also propose adopting an indemnity model in which Kenyans pay and providers fill out standard claims’ reimbursement forms, allowing our countrymen to follow up on claims with NHIF/SHA.
They will also require a cash deposit guarantee, in which services will be used against the deposit amount. They are also exploring a cash-only model, which would be a zero-sum game in terms of financial safety for citizens.
To ensure a sustainable UHC path, the Federation has recommended for a review and adjustment of NHIF reimbursement rates in accordance with contract terms, amounts, and timetables to minimize further debt accumulation for providers.
KHF has also encouraged the National treasury to disburse cash immediately so that NHIF may fully pay their providers.
The federation is also concerned with ensuring that all state and non-state agencies pay NHIF deductions on time.
KHF has also called for a commitment to collect existing debt with a defined frequency and quantity of payment to allow for planning for quality health services, with the goal of restoring provider network confidence in SHA’s new policy orientation.
Established in 2004, the Kenya Healthcare Federation (KHF) serves as a commercial health sector membership organization, representing healthcare value chain players and fostering collaborations between the public and private sectors in Kenya.
It actively participates in policy formulation, thought leadership, and donor project implementation, establishing ties and relationships with the government and all non-state players to advance healthcare in the country.
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