Kenya moves to boost health coverage for its citizens

The current administration has placed an increased emphasis on Kenya’s health care sector. Given that the country has one of the youngest populations in the world by average age, Kenya is aware that investment in social services will be a key component of supporting the Kenya Vision 2030 goals of transforming into a middle-income country. The new Health Act, 2017 further codifies constitutional protections and mandates the provision of minimum basic services. Yet while the domestic health industry performs solidly in comparison to its regional peers, there are substantial obstacles standing in the way of progress.

Sector Oversight

The National Hospital Insurance Fund (NHIF) was established under the Ministry of Health (MoH) in 1965 to help finance health care for those with formal employment. Since its founding, operations of the NHIF have been reviewed to accommodate the changing health care needs of the population, and in 1998 the fund became a parastatal organisation outside the remit of the MoH. Today, the NHIF is the largest and the oldest operating social health insurance institution in Africa, offering services to all Kenyans 18 years and older with a monthly income of at least KSh1000 ($9.80). In April 2018 the government announced the NHIF was launching cover for students at secondary public schools as well, under which the government would pay a premium of KSh1350 ($13.23) per student.

In 2010 the new constitution devolved primary and secondary health care provision to the country’s 47 counties, leaving the national government to focus on policy and research. Policy-making remains under the authorities in Nairobi, but delivery is now handled at the county level. The constitution also guaranteed certain health-related protections. Notably, these include the right to emergency room treatment; the right to housing, sanitation and clean drinking water; and the implementation of basic consumer protection, which extends to health care provision.

Over time, more resources have been committed to provision, and health indicators have improved dramatically. The infant mortality rate dropped from 117.4 per 1000 births in 1960 to 33.6 in 2017, according to the World Bank, while life expectancy has increased from 46.3 years in 1960 to 67 in 2016. The country is also on track to eradicate malaria by 2030 as a result of adopting international best practices in fighting the disease, including investment in diagnostic kits, case management, public education and the mass distribution of treated nets.

Funding Challenges

Despite the country’s efforts, some important challenges remain to be addressed. Funding shortfalls continue to result in difficulties in reaching performance objectives. In absolute terms, spending on health care has risen every year since the signing of the Abuja Declaration in 2001, which set out health care expenditure goals of 15% of the national budget by 2015.

However, including national and county budgets, total allocations to health as a portion of GDP have remained relatively stable since FY 2013/14, averaging 7.1%, according to figures released by the Office of the Controller of Budget. The total health budget in FY 2016/17 came to KSh152bn ($1.5bn) representing 7.6% of total state spending, according to a report issued by the MoH. This could be one factor explaining why some targets have been missed. According to a study released by Council for the Development of Social Science Research in Africa, in 2015 only 63% of Kenyans lived within an hour of a hospital. In some cases, people had to travel over two days to get to a hospital. More than 80% of Kenyans lacked protection from health care costs, and an estimated 1.5m people in the country were not able to pay for their health-related expenses.

While health care is guaranteed under the constitution, many people in the country are unable to afford it. A report issued by insurance brokerage firm Minet Kenya found that due to the growing prevalence of lifestyle illnesses, such as heart disease and type-2 diabetes, medical inflation stood at 12% in 2017. This is compared with the general inflation rate of just over 8%. Exacerbating the situation, local media reports that the number of uninsured Kenyans stands at around 75%. Of the population with medical needs, 40% resort to selling possessions or taking out loans to cover hospital costs, while 16% refuse medical treatment due to financial constraints.

International Donors

The problems faced by the sector could increase over time. According to Michael Corlin, advisor on funding and financing at UNICEF, Kenya received about one-third of its health funding from international donors in 2017. The concern is that this support will end over the next few years due to Kenya’s rising economic status vis-a-vis its regional neighbours. UN estimates suggest that $1bn could be lost as that financing is redirected to assist low-income countries in East and Southern Africa. “Kenya needs to reduce its reliance on foreign funding. The sources are likely to dry up in the next five to six years due to the country’s status as a low-middle-income nation [achieved in 2015],” Corlin told media in December 2017. The decline in funding will make it more difficult for Kenya to maintain what infrastructure it has in place and achieve its future goals, particularly universal health care. According to Corlin, Kenya will need to commit an additional $1.4bn to achieve the levels of care already on offer in other low-middle-income countries in Africa.

In High Demand

Another challenge involves the availability of doctors. According to the latest “Kenya Health Workforce Report”, at the outset of 2016 there were 5660 medical doctors and 31,896 nurses practising in Kenya, representing 1.5 doctors and 8.3 nurses for every 10,000 people. This falls short of World Health Organisation (WHO) recommendations of 36 doctors and 25 nurses for every 10,000 people.

Kenya is particularly lacking in specialists. There were only 71 psychiatrists serving over 2m people with mental problems, and while cancer remains a leading cause of death, killing 15,714 people in 2015, there were just nine oncologists. To help ease this shortage, 100 doctors from Cuba specialising in cardiology, nephrology and neurosurgery were flown to Kenya under a bilateral agreement in June 2018.

Universal Coverage

The government acknowledges that improved health is a critical component of efforts to accelerate economic growth and become a middle-income country by 2030. Through the Big Four agenda, announced by President Uhuru Kenyatta in December 2017, Kenya hopes to address growing out-of-pocket costs by implementing universal health coverage by 2022, while also addressing food security and nutrition, providing affordable housing and growing manufacturing to create jobs.

Key to universal access will be ensuring that every person lives within reasonable distance of a health facility – the WHO-recommended standard is no more than 5 km – and that those facilities can provide basic medical care. According to a report by the Kenya Institute for Public Policy Research and Analysis (KIPPRA), Kenya had 11,324 health facilities in 2017, of which 80% offered primary care and 86% were equipped to provide general services. The NHIF is also central to the efforts to provide coverage to the whole country, serving as the vehicle through which the government hopes to increase the number of insured Kenyans from 6m in 2017 to 13m. To achieve this, the fund has been working through schools, religious institutions and county hospitals to help increase enrolment.

Additionally, greater emphasis is being placed on primary and preventative care. “The MoH has for a long time been focused on curative health care, which has failed to tackle the issues that are facing us,” Sicily Kariuki, the health Cabinet secretary, told local media in August 2018. “My focus is different. I want to start from scratch... because most of the problems in this sector will be solved once we set our eyes on primary health care.” Indeed, research shows that one-in-three deaths are caused by are treatable and/or preventable illnesses.

Alongside government efforts to expand access, international donors are also supporting initiatives to bring services to underserved areas. In February 2018 retail pharmacy chain Goodlife Pharmacy received KSh2.2bn ($21.6m) in investment from the International Finance Corporation (IFC), the private sector investment wing of the World Bank, to expand its line of pharmacies to over 100 by 2023. A majority of the new branches will be built in underserved and low socioeconomic areas in an effort to phase out unregulated and informal drug stores. This comes on top of KSh450m ($4.4m) loan from the IFC in 2015 that saw Goodlife Pharmacy expand from a small chain with just four locations. Kenya was also the first country to sign onto the Novartis Access programme in 2015, which gave the country access to a portfolio of affordable medicines, supplementing state efforts to manage non-communicable diseases.

New Law, Next Steps

Recent legislation also takes decisive aim at sector goals by promoting earlier government initiatives. Kenya’s Health Act, signed into law in June 2017, ensures important constitutional provisions for health services are put into practice. In support of continued devolution aims, the law formalises the Health Sector Inter-governmental Consultative Forum, which provides an official platform for county and national governments to meet and plan accordingly. The care of vulnerable groups is specifically spelled out, including for the elderly, the young, women, the disabled and members of marginalised groups. The law also mandates free maternity care, vaccinations for children under the age of five and workplace breastfeeding facilities.

To ensure it is able to meet its access objectives, the law outlines plans to build a reference hospital in each county so patients can receive specialised care. This should help relieve overcrowding at some of Kenya’s largest hospitals. The Health Act will also establish a KSh4.7bn ($46m) electronic medical framework connecting all large hospitals to a centralised data centre at Kenyatta National Hospital (KNH). By 2020 the system is expected to be set up for data exchange and the maintenance of personal medical information. “With the devolution of health care, a centralised system for monitoring health services and supporting accuracy of diagnosis is necessary,” Eldah Onsomu, principal policy analyst at KIPPRA, told OBG. However, execution of Kenya’s bold IT plans has been delayed. Initially expected to be finished in 90 days, the system was not yet functional 10 months after local IT firm Seven Seas Technology was awarded the contract.

Innovation

Alongside efforts to increase the efficiency of administrative processes through technical innovations, high-tech equipment is also being introduced to enhance front-line services. Given the funding constraints, however, the capital necessary to acquire such equipment is not available. Instead, Kenya is employing a managed equipment services (MES) model, in which the private sector supplies equipment to hospitals for an agreed monthly price. Using the MES system will allow Kenya to benefit from the latest medical technology without needing a large upfront capital outlay. As part of the system, US firm General Electric (GE) will provide training to technicians on how to handle the equipment, providing additional capacity building for human resources.

This is not the first time GE has invested in helping the country bridge its skills gap. In 2016 the government inaugurated the $13m GE Healthcare Skills and Training Institute to provide clinical applications and technical training courses for sector professionals. The school is set to expand operations to include leadership, biomedical and clinical education courses, with GE hoping to train 10,000 health care professionals in Kenya and East Africa by 2020.

Outlook

While there are challenges facing the sector, with them comes the potential for significant opportunity. Foreign participants in the market are hoping to build on a number of trends, including health tourism and mass-market provision. Local firms also see the possibility of serving customers in regional countries. “We are deeply involved in regional integration. Why serve 45m people in one country, when you can serve a customer base of 300m? Foreign investors find this attractive, and Kenya is leading the pack in this regard,” Amit Thakkar, chairman of the Kenya Healthcare Federation, told OBG.

International investment, technology and expertise will be needed, especially as Kenya works towards 100% total coverage. Innovative solutions in terms of structuring and delivery will be in great demand. Over time, health care could become a growth sector that meets the needs of all Kenyans. But for this process to be successful, the government will have to properly design the necessary public-private partnerships so that the right incentives are created for corporations to provide care at reasonable and sustainable prices.