Statement by hon. peter anyang’ nyongo, minister for medical services during the launch of the study on the Strategic review of NHIF & Assessment of the Private health Insurance providers on 19^th july 2010 at afya house, 11.00 am

Ladies and Gentlemen,

This Ministry has been leading the process to develop a strategy on affordable, accessible and quality healthcare services to Kenyans as part of the wider reforms in the health sector. This is a process that has been ongoing for a long time. All of you are aware that a bill on Social Health Insurance was tabled and passed by Parliament in 2004 and could come into law due to issues that were considered not to have been addressed.

Since 2006/07, there have been concerted efforts by Government and stakeholders to ensure to ensure that the process moves forward. As a result, we have had a number of studies undertaken to provide evidence for the development of strategy that could that will provide for affordable, accessible and quality healthcare services in the country. There have been further studies since early last year, including visits to other countries to learn some of the best practices. Arising from these consultations, a draft strategy on affordable, accessible and quality healthcare services has been developed and formed the basis of the some of the activities that are currently ongoing.

Ladies and Gentlemen,

What has emerged is that most people and especially the poor pay directly for their services. As a result, the out of pocket health expenditure on health currently stands at about 40 per cent. This is the highest contribution by any group given that Government contribution is about 29 per cent while the development partners contribute almost 31 per cent. There are many people who do not seek care when they are sick because of cost. The population that has some form of health insurance is only about 20 per cent, most of them under the National Hospital Insurance Fund (NHIF). This situation is not sustainable given the high levels of poverty in the country.

There are other factors hampering access to health services that include the shortages of skilled health workers, inadequate and poor health infrastructure as well as the weak management systems – all these that are being addressed by Government and other stakeholders.

Ladies and Gentlemen,

The studies that we are launching today should therefore be seen within this wider context of the overall reforms in the health sector. The NHIF is considered a major player in the process of increasing cover and access to health services. The private health insurance providers have also to be enabled to provide products that attract more people at affordable rates of contribution. In this regard therefore, the success of achieving the objectives of the any strategy is hinged on a number of factors, including a greater role for NHIF to increase coverage and benefits to its members as well as the poor and the role that the private health insurance providers will play in reaching the lower segments of the society.

It is for this reason that the Ministry approached the International Finance Cooperation (IFC) of the World Bank to support a strategic review of NHIF. At the same time a market assessment of the private health insurance providers will be undertake in order to have a holistic view of the health insurance sub-sector.

The focus of the Strategic Review of NHIF will include a review of the adequacy of the mandate for the NHIF and working with NHIF to develop a revised mandate for the institution – including the NHIF Act; conducting a “Gap Analysis” of NHIF’s capacity and potential with regard to: i) its current mandate and capacities; and ii) the “revised” mandate. This analysis will also consider all aspects of the NHIF including but not limited to: roles and responsibilities of staff, appropriate skill matching, policies and procedures, governance, management, IT and Management Information Systems, as well as all financial considerations relating to receiving, disbursing, investing, risk management and controls. There will also be need to benchmark NHIF’s efficiencies against other similar organizations among others.

The Market Assessment of prepaid health schemes will focus on reviewing of all relevant previous work commissioned by the Government of Kenya, donor groups or others, and distill the recommendations of these reports and assess their relevance to this project; conducting a supply and demand analysis on the current private health insurance providers and their client. There will be need to identify and review any policy, regulatory or other government institutional activity that is relevant to the operations of private health insurers and make recommendations.

Ladies and Gentlemen,

In order to have an independent view of these institutions and their operational reach, the work will be undertaken through an independent consultant – Deloitte East Africa who won the work through a competitive bidding process. In this regard therefore, we believe that thorough the support of a technical committee of the Ministry, NHIF and IFC, the results from this study will be able to give recommendations that will enrich the process of deepening the health financing reforms in the sector.

At the same time, measures have been put in place to ensure that the study is as consultative as possible so that inputs from all concerned parties are included.

This work is expected to be completed by December 2010. However, the Ministry will take on board any urgent recommendations that will be emerging from the process which may be considered to have impact on coverage or that may need fast tracking.

Ladies and Gentlemen,

The launch of this work today is testimony to the commitment by the Government to transform the health sector and meet the objectives of Vision 2030. There are many other reforms that are ongoing that the work will complement, including the NHIF out-patient cover that is being piloted, the implementation of the Health sector Services Fund and Hospital Management Services Fund; the strengthening of leadership and management and health facility level as well as well the strengthening of our procurement systems and supply chain for health commodities.

Ladies and Gentlemen,

As I conclude, I would like to thank our development partners for the tremendous support in the development and implementation of various reforms and the IFC for the support to this study. The World Bank and GTZ have been particularly supportive to ensure that the strategy on affordable, accessible quality healthcare services is concluded.

I would also like to congratulate Deloitte East Africa for winning this job and believe that we will get the best results.

With these few remarks, I declare the Strategic review of NHIF & Assessment of the Private health Insurance providers study officially launched.

Thank You.