A Critical Analysis of Purchasing Arrangements in Kenya: The Case of the National Hospital Insurance Fund

Document Type : Original Article

Authors

1 Health Economics Research Unit, KEMRI Wellcome Trust Research Programme, Nairobi, Kenya

2 Kenya Country Office, The World Bank, Nairobi, Kenya

Abstract

Background
Purchasing refers to the process by which pooled funds are paid to providers in order to deliver a set of health care interventions. Very little is known about purchasing arrangements in low- and middle-income countries (LMICs), and certainly not in Kenya. This study aimed to critically analyse purchasing arrangements in Kenya, using the National Hospital Insurance Fund (NHIF) as a case study.
 
Methods
We applied a principal-agent relationship framework, which identifies three pairs of principal-agent relationships (government-purchaser, purchaser-provider, and citizen-purchaser) and specific actions required within them to achieve strategic purchasing. A qualitative case study approach was applied. Data were collected through document reviews (statutes, policy and regulatory documents) and in-depth interviews (n = 62) with key informants including NHIF officials, Ministry of Health (MoH) officials, insurance industry actors, and health service providers. Documents were summarised using standardised forms. Interviews were recorded, transcribed verbatim, and analysed using a thematic framework approach.
 
Results
The regulatory and policy framework for strategic purchasing in Kenya was weak and there was no clear accountability mechanism between the NHIF and the MoH. Accountability mechanisms within the NHIF have developed over time, but these emphasized financial performance over other aspects of purchasing. The processes for contracting, monitoring, and paying providers do not promote equity, quality, and efficiency. This was partly due to geographical distribution of providers, but also due to limited capacity within the NHIF. There are some mechanisms for assessing needs, preferences, and values to inform design of the benefit package, and while channels to engage beneficiaries exist, they do not always function appropriately and awareness of these channels to the beneficiaries is limited.
 
Conclusion
Addressing the gaps in the NHIF’s purchasing performance requires a number of approaches. Critically, there is a need for the government through the MoH to embrace its stewardship role in health, while recognizing the multiplicity of actors given Kenya’s devolved context. Relatively recent decentralisation reforms present an opportunity that should be grasped to rewrite the contract between the government, the NHIF and Kenyans in the pursuit of universal health coverage (UHC).

Keywords

Main Subjects


"Watch the Video Summary"

  1. World Health Organization. The World Health Report 2010 Health Systems Financing: The path to universal coverage. Geneva: World Health Organization; 2010.
  2. Kutzin J. Health financing for universal coverage and health system performance: concepts and implications for policy. Bull World Health Organ. 2013;91(8):602-611.
  3. Kutzin J, Sparkes SP. Health systems strengthening, universal health coverage, health security and resilience. Bull World Heal Organ. 2016;94(9980):165050.
  4. Tangcharoensathien V, Patcharanarumol W, Ir P, et al. Health in Southeast Asia 6 Health-financing reforms in southeast Asia: challenges in achieving universal coverage. Lancet. 2011;377(9768):863-873. doi:10.1016/s0140-6736(10)61890-9
  5. Lagomarsino G, Garabrant A, Adyas A, Muga R, Otoo N. Moving towards universal health coverage: health insurance reforms in nine developing countries in Africa and Asia. Lancet. 2012;380(9845):933-943. doi:10.1016/S0140-6736(12)61147-7
  6. Giedion U, Alfonso EA, Díaz Y. The impact of universal coverage schemes in the developing world: a review of the existing evidence. http://documents.worldbank.org/curated/en/349621468158382497/pdf/753260NWP0Box30ewofExistingEvidence.pdfPublished2013.
  7. RESYST. What is Strategic Purchasing for Health. RESYST; October 2014.
  8. Preker AS, Liu X, Velenyi EV, Baris E. Public Ends, Private Means: Strategic Purchasing of Health Services. Washington, DC: World Bank; 2007.
  9. Figueras J, Robinson R, Jakubowski E. Purchasing to improve health systems performance. In: Figueras J, McKee M, Mossialos E, Saltman RB, eds. European Observatory on Health Systems and Policies Series. Maidenhead: Open University Press; 2007.
  10. World Health Organization. Quality of care: a process for making strategic choices in health systems. Geneva: World Health Organization; 2006.
  11. Nakhimovsky S, Peterson L, Holtz J, et al. Using evidence to design health benefit plans for stronger health systems: lessons from 25 countries. United States Agency for International Development; 2015.
  12. Lagarde M, Palmer N. The impact of contracting out on health outcomes and use of health services in low and middle-income countries. Cochrane Database Syst Rev. 2009;(4):CD008133. doi:10.1002/14651858.CD008133
  13. Cashin C. Assessing Health Provider Payment Systems: A Practical Guide for Countries Working Toward Universal Health Coverage. Joint Learning Network for Universal Health Coverage; 2015.
  14. Lagarde M, Powell-Jackson T, Blaauw D. Background paper for the global symposium on health systems research. Technical Report. Global Symposium on Health Systems Research; November 16-19, 2010; Montreux, Switzerland.
  15. Kutzin J, Yip W, Cashin C. Alternative financing strategies for universal health coverage. In: Scheffler RM, ed. Handbook of global health economics and public policy. Singapore: World Scientific Publishing Co; 2016.
  16. Resilient and Responsive Health Systems. What facilitates strategic purchasing for health system improvement? Resilient and Responsive Health Systems; 2016. http://resyst.lshtm.ac.uk/resources/what-facilitates-strategic-purchasing-health-system-improvement.  Accessed April 28, 2017. Published 2011.
  17. Docteur E, Oxley H. Health-care systems: lessons from the reform experience. https://www.oecd.org/els/health-systems/22364122.pdf.  Published 2003.
  18. Abuya T, Maina T, Chuma J. Historical account of the national health insurance formulation in Kenya: experiences from the past decade. BMC Health Serv Res. 2015;15:56. doi:10.1186/s12913-015-0692-8
  19. National Hospital Insurance Fund Act No. 9 of 1998. 2012.
  20. Ministry of Health. Kenya Household Expenditure and Utilisation Survey 2013. Nairobi: Ministry of Health; 2014.
  21. Government of Kenya. Sessional Paper No. 7 of 2012 on the Policy on Universal Health Care Coverage in Kenya. Nairobi, Kenya: Ministry of Medical Services; 2012.
  22. Ministry of Medical Services. Sessional Paper No. 7 of 2012 on the Policy on Universal Health Care Coverage in Kenya. Nairobi, Kenya: Ministry of Medical Services; 2012.
  23. Republic of Kenya. Kenya Vision 2030. Nairobi, Kenya: The National Economic and Social Council of Kenya; 2007.
  24. Kenya. The World Bank website. http://data.worldbank.org/country/kenya.  Accessed September 18, 2015.
  25. The Constitution of Kenya. 2010.
  26. Government of Kenya. Kenya Service Availablity and Readiness Assessment Mapping (SARAM) Report. Nairobi, Kenya: Ministry of Health; 2013.
  27. Ministry of Health Kenya. Kenya Health Sector Strategic and Investment Plan: Transforming Health: Accelerating Attainment of Universal Health Coverage. Nairobi: Ministry of Health; 2014.
  28. Ministry of Health. The Kenya Essential Package for Health: The health services persons in Kenya are entitled to, for movement towards attainment of the right to health. Nairobi: Ministry of Health; 2015.
  29. Ministry of Medical Services, Ministry of Public Health and Sanitation. Kenya National Health Accounts 2009/10. Nairobi, Kenya: Ministry of Medical Services and Ministry of Public Health and Sanitation; 2010.
  30. Joint Learning Network. Kenya: Approaches to covering poor, vulnerable, and informal populations to achieve UHC. http://www.jointlearningnetwork.org/resources/kenya-approaches-to-covering-poor-vulnerable-and-informal-populations-to-ac.  Accessed April 28, 2017. Published 2015.
  31. Mwaura RN, Barasa EW, Ramana GNV, Coarasa JA, Rogo KO. The path to universal health coverage in Kenya: repositioning the role of the National Hospital Insurance Fund. Washington DC: World Bank Group; 2015.
  32. Ruth Omondi. Success Stories: Inspiring stories of how the Health Insurance Subsidy Programme is improving the quality of life of the poor by enabling them to access quality health care. Deutsche Gesellschaft Für Internationale Zusammenarbeit (GIZ) GmbH Health Sector Programme in Kenya (HSP); 2016.
  33. Ministry of Health. Kenya National Health Accounts 2012/13. Nairobi: Ministry of Health; 2015.
  34. Welcome to Afya Yetu. Afya Yetu Initiative website. http://afyayetu.or.ke/.  Accessed December 5, 2014.
  35. Community-Based Health Financing (CBHF). Support for Tropical Initiatives in Poverty Alleviation website. http://www.stipakenya.org/.  Accessed December 5, 2014. Published 2013.
  36. Empowering communities to access quality healthcare. Kenya Community Based Health Financing Association (KCBHFA) website. http://palsoftgroup.com/kcbhfa/index.php.  Accessed December 5, 2014. Published 2010.
  37. Munge K, Mulupi S, Chuma J. A critical analysis of the purchasing arrangements in Kenya: the case of the National Hospital Insurance Fund, Private and Community-based health insurance. RESYST; 2015.
  38. Arrow KJ. The Economics of Agency. Stanford, California: Center for Research on Organizational Efficiency, Stanford University; 1984.
  39. Public Service Commission. Public Service Compliance with Values and Principles in Articles 10 and 232 of the Constitution. Nairobi: Public Service Commission; 2014.
  40. Republic of Kenya. The Public Officer Ethics Act. Nairobi: Republic of Kenya; 2003.
  41. Outpatient Services. National Hospital Insurance Fund website. http://www.nhif.or.ke/healthinsurance/outpatientServices.  Accessed April 28, 2017. Published 2017.
  42. Inpatient Services. National Hospital Insurance Fund website. http://www.nhif.or.ke/healthinsurance/inpatientServices.  Accessed April 28, 2017. Published 2017.
  43. Ministry of Health Kenya. Kenya Health Policy 2014-2030: Towards Attaining The Highest Standard of Health. Nairobi, Kenya: Ministry of Health, Republic of Kenya; 2014.
  44. Etyang AO, Munge K, Bunyasi EW, et al. Burden of disease in adults admitted to hospital in a rural region of coastal Kenya: an analysis of data from linked clinical and demographic surveillance systems. Lancet Glob Health. 2014;2(4):e216-e224.
  45. Kenya. Institute for Health Metrics and Evaluation website. http://www.healthdata.org/kenya.  Accessed April 28, 2017. Published 2017.
  46. Departmental Committee on Health. Report of the Departmental Committee on Health on The Capacity of The National Hospital Insurance Fund (NHIF) to roll out the Universal Social Health Insurance. Nairobi: The National Assembly Republic of Kenya; 2014.
  47. Teyie A. Civil Servants protest NHIF cover. Daily Nation. January 26, 2014. http://www.nation.co.ke/news/Civil-servants-protest-NHIF-cover/1056-2160810-gsqiu1/index.html
  48. Ongiri I, Kubani J. Unions demand talks on NHIF rates. Daily Nation. May 19, 2015. http://www.nation.co.ke/news/Unions-demand-talks-on-NHIF-rates/1056-2722758-qmtc3a/index.html.  
  49. Mbaka J. NHIF says rates to stay, 10,000 exempt for now. The Star. May 21, 2015. http://www.the-star.co.ke/news/2015/05/22/nhif-says-rates-to-stay-10000-exempt-for-now_c1139548.
  50. Kenya National Bureau of Statistics. Economic Survey 2016. Nairobi: Kenya National Bureau of Statistics; 2016.
  51. National Hospital Insurance Fund. NHIF Accreditation Manual 2005. 1st ed. Nairobi: NHIF; 2005.
  52. Flodgren G, Pomey M, Taber S, Eccles M. Effectiveness of external inspection of compliance with standards in improving healthcare organisation behaviour, healthcare professional behaviour or patient outcomes. Cochrane Database Syst Rev. 2011;(11):CD008992. doi:10.1002/14651858.CD008992.pub2
  53. Irimu GW, Greene A, Gathara D, et al. Explaining the uptake of paediatric guidelines in a Kenyan tertiary hospital--mixed methods research. BMC Health Serv Res. 2014;14:119. doi:10.1186/1472-6963-14-119
  54. Irimu GW, Greene A, Gathara D, et al. Factors influencing performance of health workers in the management of seriously sick children at a Kenyan tertiary hospital--participatory action research. BMC Health Serv Res. 2014;14:59. doi:10.1186/1472-6963-14-59
  55. Gathara D, English M, van Hensbroek MB, Todd J, Allen E. Exploring sources of variability in adherence to guidelines across hospitals in low-income settings: a multi-level analysis of a cross-sectional survey of 22 hospitals. Implement Sci. 2015;10:60.
  56. Gathara D, Nyamai R, Were F, et al. Moving towards routine evaluation of quality of inpatient pediatric care in Kenya. PLoS One. 2015;10(3):e0117048. doi:10.1371/journal.pone.0117048
  57. English M, Esamai F, Wasunna A, et al. Assessment of inpatient paediatric care in first referral level hospitals in 13 districts in Kenya. Lancet. 2004;363(9425):1948-1953. doi:10.1016/s0140-6736(04)16408-8
  58. English M. Designing a theory-informed, contextually appropriate intervention strategy to improve delivery of paediatric services in Kenyan hospitals. Implement Sci. 2013;8:39. doi:10.1186/1748-5908-8-39
  59. Juma V. NHIF contributors to be locked out of high cost hospitals. Business Daily. February9, 2015. http://www.businessdailyafrica.com/Corporate-News/NHIF-members-to-be-locked-out-of-high-cost-hospitals/-/539550/2617384/-/tq.
  60. Ongiri I. NHIF announces rates it will pay to hospitals in medical scheme. Daily Nation. July 4, 2015. http://www.nation.co.ke/news/NHIF-Rates-Medical-Scheme/1056-2775394-6c5i5d/index.html
  61. Deloitte Consulting Limited. NHIF Strategic Review & Market Assessment of Pre-paid Health Schemes: Measuring up. Nairobi: Deloitte Consulting Limited; 2011.
  62. Republic of Kenya. National Hospital Insurance Fund (Standard and Special Contributions) Regulations. Legal Notice No.14. Nairobi: Republic of Kenya; 2015.
  63. National Hospital Insurance Fund. NHIF Afya Yetu. Bima Yetu website. http://www.nhif.or.ke/healthinsurance/.  Accessed January 21, 2015.
  64. Vidija P. NHIF to roll out Sh500,000 surgery package in October. The Star (Online). September 23, 2016. http://www.the-star.co.ke/news/2016/09/23/nhif-to-roll-out-sh500000-surgery-package-in-october_c1425926
  65. Republic of Kenya. The Statute Law (Miscellaneous Amendments) Act 2014. Kenya; 2014.
  66. Agyepong IA, Abankwah DNY, Abroso A, et al. The “Universal” in UHC and Ghana’s National Health Insurance Scheme: policy and implementation challenges and dilemmas of a lower middle income country. BMC Health Serv Res. 2016;16:504. doi:10.1186/s12913-016-1758-y
  67. Tsofa B, Molyneux S, Goodman C. Health sector operational planning and budgeting processes in Kenya—“never the twain shall meet.” Int J Health Plann Manage. 2016;31(3):260-276. doi:10.1002/hpm.2286
  68. Bennett S, Mills A. Government capacity to contract: health sector experience and lessons. Public Adm Dev. 1998;18(4):307.
  69. Berman PA, Bossert T. A decade of heath sector reform in developing countries: What have we learned? DDM Symposium: “Appraising a Decade of Health Sector Reform in Developign Counties”. Washingtom DC: Data for Decision Making Project International Health SYstems Group Harvard School of Public Health; 2000.
  70. Mills A. Decentralization concepts and issues: a review. In: Mills A, Vaughan JP, Smith DL, Tabibzadeh I, eds. Health System Decentralization: Concepts, Issues and Country Experience. Geneva: World Health Organization; 1990.
  71. Towse A, Mills A, Tangcharoensathien V. Learning from Thailand’s health reforms. BMJ. 2004;328(7431):103-105.
  72. Scott I. What are the most effective strategies for improving quality and safety of health care? Intern Med J. 2009;39(6):389-400. doi:10.1111/j.1445-5994.2008.01798.x
  73. Dayal P, Hort K. Quality of care: what are effective policy options for government in low and middle income countries to improve and regulate the quality fo ambulatory care? Asia Pacific Observatory on Health Systems and Policies; 2015.
  74. Agyepong IA, Aryeetey GC, Nonvignon J, et al. Advancing the application of systems thinking in health: provider payment and service supply behaviour and incentives in the Ghana National Health Insurance Scheme - a systems approach. Health Res Policy Syst. 2014;12:35. doi:10.1186/1478-4505-12-35
  75. Liu X, Hotchkiss DR, Bose S, Bitran R, Giedion U. Contracting for Primary Health Services: Evidence on its Effects and a Framework for Evaluation. Bethesda, MD: The Partners for Health Reform Plus; 2004.
  76. Brousseau E, Glachant J-M, eds. The Economics of Contracts: Theories and applications. Cambridge, UK: Cambridge University Press; 2002.
  77. Thailand’s Universal Coverage Scheme: Achievements and Challenges. An independent assessment of the first 10 years (2001-2010). Nonthaburi, Thailand: Health Insurance System Research Office; 2012.
  78. Tran Thi Mai O, Hoang Thi P. Strategic Purchasing for Universal Health Coverage: A Critical Assessment Social Health Insurance Fund Vietnam. Vietnam: Health Strategy and Policy Institute; 2016.
  79. Etiaba E, Onwujekwe O, Ogochukwu I, Uzochukwu B. Strategic Purchasing for Universal Health Coverage: A Critical Assessment: The Formal Sector Social Health Insurance Programme. RESYST Resilient and Responsive Health Systems; 2016.
  80. Asante A, Price J, Hayen A, Jan S, Wiseman V. Equity in health care financing in low- and middle-income countries: a systematic review of evidence from studies using benefit and financing incidence analyses. PLoS One. 2016;11(4):e0152866. doi:10.1371/journal.pone.0152866
  81. World Health Organization. The World Health Report 2008 Primary Health Care Now More Than Ever. Geneva: World Health Organization; 2008.
  82. Preker AS, Langenbrunner JC, eds. Spending Wisely: Buying Health Service for the Poor. Washington DC: The World Bank; 2005.
  83. Ostergren K, Boni S, Danishevski K, Kaarboe O. Implementation of health care decentralization. In: Saltman RB, Bankauskaite V, Vrangbaek K, eds. Decentralization in Health Care. Berkshire, England: Open University Press; 2007.
  84. Doherty J, Kirigia D, Ichoku H, McIntyre D, Hanson K, Chuma J. Increasing the fiscal space for health: the experience of Kenya, South Africa and Lagos State (Nigeria). 3rd Global Symposium on Health Systems Research. Cape Town, South Africa; RESYST; 2014.
  85. Di McIntyre, Filip Meheus. Fiscal Space for Domestic Funding of Health and Other Social Services. London: Chatham House (The Royal Institute of International Affairs); 2014.
  86. Chuma J, Maina T, Ataguba JE. Does the distribution of health care benefits in Kenya meet the principles of universal coverage. BMC Public Health. 2012;12:20. doi:10.1186/1471-2458-12-20
  87. Nguhiu PK, Barasa EW, Chuma J. Determining the effective coverage of maternal and child health services in Kenya, using demographic and health survey datasets: tracking progress towards universal health coverage. Trop Med Int Health. 2017;22(4):442-453. doi:10.1111/tmi.12841