NHIF%PARTNERSHIP%WITH%THE% PRIVATE%HEALTH%INSURERS%

NHIF%PARTNERSHIP%WITH%THE% PRIVATE%HEALTH%INSURERS% MR.%RICHARD%SIGEY% MANAGER,%MICRO8INSURANCE%&%SPONSORED% PROGRAMS%

Things%to%Keep%in%Mind%Today% 1. Universal"coverage"is"the"ul@mate"goal" 2. NHIF"and"the"private"health"insurers"both" have"a"role"to"play"to"contribu@ng"to" universal"coverage."what"role"should"they" play?" " 2"

Snapshot%of%NHIF% NHIF"is"a"State"Corpora@on"regulated"under""an"NHIF"Act""No"9"of"1998." The"Act"regulates"and"outlines"core"func@ons"of"the"Fund"and"is"the"main"driver"of"governance" within"nhif." NHIF"has"a"total"of"5.2"million"principal"members"summarized"as"follows:."! Formal%sector8%3.43m%which%is%64%%%! Informal%sector8%1.79m%which%is%34%%of%total%NHIF%membership%! Organized%Groups8%%123,408%which%6.7%%of%total%informal%sector%membership%! Self8employed8%1.66m%which%is%93%%of%total%informal%sector%membership%! Poor%(indigent)%popula\on8%141,000%which%is%1.2%%of%total%NHIF%membership% NHIF"covers"approximately"19%"of"the"popula@on"while"the"private""insurers"cover""3%"of"the" popula@on." NHIF"has"1,200"healthcare"providers"accredited"networked"within"a"robust"ICT"infrastructure."" The"claims"management"system"is"real"@me"with"accredited"healthcare"providers"make"online" no@fica@ons"to"nhif"whenever"members"access"services."" 3"

Members%in%Thousands% MEMBERSHIP%GROWTH%OVER%THE% YEARS% 5,000" 4,500" 4,000" 3,500" 3,000" 2,500" 2,000" 1,500" 1,000" 500" 0" 2005/06" 2006/07" 2007/08" 2008/09" 2009/10" 2010/11" 2011/12" 2012/13" 2013/14" 2014/15" Actual"Membership" 4"

REVENUE%GROWTH%OVER%THE%YEARS% 16,000" 14,000" 12,000" Rev%Millions% 10,000" 8,000" Actual"Rev" 6,000" 4,000" 2,000" 0" 2005/06" 2006/07" 2007/08" 2008/09" 2009/10" 2010/11" 2011/12" 2012/13" 2013/14" 2014/15" 5"

Healthcare%Financing..At%a%Glance% Indicator% Total Population % Population growth rate- % GDP per capita % Total Health Expenditure % Total Health Expenditure per capita % Out of Pocket Expenditure Population that lives below the poverty line Metric% 42.7 million% 2.2% per annum% Kenya Shillings (KES) 38,970 (US$ 1,245.51)% 5.4% of GDP% Kenya Shillings (KES) 3, 203 (US$ 38) or 4.6% of general government expenditure% 76.7% as a percentage of private healthcare expenditure 46%% Absolute poverty% 19% 6"

Challenges%Facing%Healthcare% Financing%in%Kenya% 1. High%poverty%levels%in"terms"of"healthcare"financing,"the"poor"face"major"financial" barriers"to"accessing"healthcare" 2. High%burden%of%preventable%infec\ous%diseases%and"an"emerging"epidemic"of"non. communicable"disease"e.g."100,000"kenyans"die"annually"due"to"ncds." 3. Inadequate%funding%of"health"system.Abuja"Declara@on"is"15%"of"annual"budget" compared"to"kenya"where"is"at"5.4%" 4. Inefficient%alloca\on%and"use"of"scarce"resources"where"most"of"the"healthcare" expenditures"is"used"for"cura@ve"services."the"inefficiencies"in"the"health"system"result" in"20%"to"40%"of"total"health"expenditure"being"wasted." 5. High%out%of%pocket%expenditure%in"the"context"of"weak"risk"pooling."The"health"sector" con@nues"to"be"predominantly"financed"by"private"sector"sources"including"by" households "out.of.pocket"(oop)"spending"at"39%"of"total"health"spending."" 6. Significant%inequali\es%in"access"to"healthcare"services"largely"due"to"financial"barriers" 7. Poor%health%infrastructure%and"unreliable"supply"of"health"commodi@es"and"medicines." 8. Exis'ng*financing*mechanisms*assume"that"majority"of"people"can"afford"to"pay"for" health"care"" 7"

Health%Micro8Insurance%in%Kenya% In"Kenya,"the"informal"sector"cons@tutes"11m"workers" of" which" NHIF" covers" 6%" with" health" insurance." The" rest"of"the"workers"have"no"form"of"health"insurance" According"to"the"Insurance"Regulatory"Authority"(IRA)"" 2012" report"," the" extent" of" coverage" of" the" informal" sector" is" hindered" by" the" low" and" irregular" income," insecure" employment," lack" of" structures," adverse" selec@on" as" membership" is" voluntary" and" tradi@onal" insurance" products" which" are" inaccessible" by" the" workers.""" Many"insurance"products"are"targeted"to"formal"sector" workers"and"high"income"earners"locking"out"informal" sector."" NHIF" has" ac@vely" engaged" informal" sector" workers" which" has" seen" membership" in" this" sector" increase" from"530,000"in"2010"to"1.7m"in"2015."this"is"a"31%" increase"over"the"last"five"(5)"years." Strategies" used" by" NHIF" to" further" increase" informal" sector"workers"include:."! Targe@ng"exis@ng"groups"" Matatu" welfare" associa@ons" (160,000" members)"! Targeted" communica@on" of" benefit" of" membership" to" the" informal" sector" groups" e.g." use" of" local/vernacular" radio" sta@ons" to" reach" informal" sector," market" and" church" storms" in" rural"areas.""! Incen@ves" to" recruit" and" adract" contribu@ons" (e.g." amnesty)." This" is" due" to" the" high" default" rate," NHIF" formulated" an" amnesty" policy" to" adract"and"retain"defaulters."""! NHIF" has" leveraged" on" technology" through" the" introduc@on" of" mobile" banking" (MPESA)" which" allows" for" convenient" remidance" of" contribu@ons"by"the"member."currently"revenue" collected" " from" MPESA" monthly" is" Kenya% Shillings%(KES)%80%million%or%USD%%$800,000% SACCOs"(7,000"socie@es),"" Organized/development"groups,"" " Micro.finance"ins@tu@ons" Academic"ins@tu@ons"(300,000"registered)" Farmer s"organiza@ons"(295,000"members)" 8"

Challenges%in%Informal%Sector% Recruitment% 1. Low%u\liza\on%! This"is"due"to"the"inability"of"beneficiaries"to"understand" the"benefits"en@tled"as"well"as"the"lack"of"healthcare" facili@es"accredited"by"nhif"in"nearest"to"the"members."% 2. Over%u\liza\on%! This"is"due"to"the"pre.exis@ng"illnesses"that"members" have"especially"due"to"poor"living"condi@ons."! Healthcare"providers"will"tend"to"over"treat"members" due"to"the"insurance"cover." 3. Purchasing%of%health%services%! Majority"of"the"informal"sector"workers"migrate" frequently"in"such"of"employment"which"affects" u@liza@on"of"services"which"are"not"portable.% 9"

Role"of"Private"Health"Insurers" NHIF"offers"an"enhanced"package"to"220,000"Civil"Servants" and"disciplined""services""where"the"group"pays"more"to" access"inpa@ent,"outpa@ent,"dental,"op@cal,"group"life,"last" expense,"air"rescue"and"emergency"evacua@on." NHIF"views"the"role"of"the"private"health"insurance"as" complementary"and"can"bolster"the"efforts"to"adain" universal"health"coverage"in"the"following"proposed"ways:." Complementary%and%Supplementary%health%insurance% a) Loss"of"income"(for"principle"member)." b) Accident"death"cover"(For"principal" member)" c) Permanent"Disability"(For"Principal"Member)" h) Cosme@c"surgery"and"fer@lity"treatments" i) Contract%outsourcing%of%delegated%health% care%func\ons%(collec\on,%purchasing,% administra\on,%marke\ng)% j) Contract%for%the%delivery%of%services%and% supply%of%goods%with%nhif%e.g.%group%%life%&% last%expense%,%ambulance%and%air%rescue% services%(amref%kenya)% k) Par\cipa\on%in%overall%health%care%financing% policy%and%implementa\on.%this%takes% place%during%the%health%congress% workshops%organized%by%the%ministry%of% Health.%% d) Funeral"Expenses"("For"Principal"Member)" e) Funeral"Expenses"Extension"to"addi@onal" Family""Members" f) Provision"of"Out"Pa@ent"Cover" g) Usage"of"Private"Wards"and"Access"to" Private"Consultants" 10"

Partnering%with%NHIF,%Case%of%CIC% CIC"is"a"leading"private"insurer"in"Kenya"that" mainly"targets"organized"groups"and"saccos."" NHIF"and"CIC"partnered"in"2009""to"offer"an" enhanced"package"of"benefits"including"inpa@ent" cover,"loss"of"income"and"funeral"expense"cover."" The"partnership"resulted"in"enrolment"of" approximately"1,000"groups"country"wide." Advantages%of%the%CIC%partnership%with%NHIF% included:." 1. Access"to"large"numbers"of"people"in"a" large"variety"of"sectors" 2. Accessibility"to"different"sectors"including" agriculture"to"transport" 3. The"affordability"if"the"premium;"Kenya% Shillings%(KES)%1,920%per%family%per%year" adracted"many"informal"sector"workers" even"those"not"affiliated"to"groups" 4. NHIF"created"an"incen@ve"structure" where"by"the"organized"groups"that" adained"an"nhif"membership" recruitment"of"at"least"500"enjoyed"a"5%" commission"payable"to"the"group." 5. Many"groups"sort"affilia@on"with"NHIF" due"to"the"affordability"and"incen@ve" offered"to"register"members." 6. Posi@ve"impact"on"the"organiza@on s" reputa@on"by"targe@ng"low"income"and" poor"groups."this"curbed"the"percep@on" that"nhif"only"targets"salaried"or"formal" sector"workers." Challenges%of%the%Partnership% 1. Ins\tu\onal%arrangements."NHIF" partnered"with"cic"however"there"were" several"other"players"which"created" despondency"in"the"execu@on"of"roles." 2. Lack%of%con\nuous%educa\on8"this" created"an"informa@on"gap"and"resulted" in"miscommunica@on"to"members" 3. Delays%in%remigance8%the"remidances"to" NHIF"were""delayed"or"in"some"cases" never"received"despite"members"having" been"deducted"from"incomes.""this" resulted"in"a"high"default"rate"as"well"as" low"reten@on"rate." 4. Lack%of%a%complaint%and%feedback% mechanism8%the"members"were"unable"to" relay"challenges"or"grievances"and"as"such" felt"disenfranchised"by"the"partnership." " " 11"

Lessons%Learnt%from%Failures%in% Partnerships%with%PHIs% 1. Governance%and%accountability8% This"is"important"especially"where"partnerships"are"involved"to" create"structures"that"will"coordinate"the"implementa@on"and" flow"of"informa@on"between"the"par@es"involved." In"addi@on,"par@es"should"prac@ce"full"disclosure"to"the" members"on"opera@onal"and"financial"data." 2. Efficiency%and%effec\veness% The"systems"put"in"place"should"ensure"convenience"and" op@mal"use"of"resources"to"avoid"leakages,"cumbersome" registra@on"and"payment"mechanisms"for"members"" 3. Financial%sustainability% The"partnership"should"embody"financially"sound"mechanisms" that"will"ensure"survival"of"the"same"regardless"of"the" changing"economic"and"business"environment."" 12"

Lessons%Learnt%from%Success%of% Partnerships%with%PHIs% 1. Capacity%Building:."NHIF"has"taken"an"ac@ve"role"in"training"and"sensi@za@on" of"staff,"group"representa@ves"and"members"on"the"role"of"each" stakeholders."" 2. Op\mal%ICT%deployment8% NHIF"uses"technology"to"simplify"the"payment"process"for"members"and" promote"administra@ve"efficiency."" NHIF"ensures"informa@on"is"readily"available"especially"on"membership," benefits"and"service"points"through"channels"such"as"the"website"and" efficient"call"centre." 3. Business%models8%NHIF"is"working"on"an"agency"model"which"will"increase" reach"to"all"kenyans"especially"in"rural"and/or"remote"areas" 4. Quality%management8%NHIF"is"con@nuously"ensuring"that"members"have" access"to"quality"and"affordable"healthcare"through"clinical"audits"and" review"of"the"accredita@on"system"used"to"empanel"healthcare"providers." 5. Ins\tu\onal%framework8%NHIF"has"undergone"major"opera@onal"and" structural"reforms"to"accommodate""the"dynamic"economic"and"business" environment"as"well"as"changing"needs"of"members" 13"

NHIF%&%Universal%Health%Coverage% Agenda% In"introducing"social"protec@on"in"health,"NHIF"has"introduced"new" contribu@on"rates"graduated"based"on"salary"bands." To"this"end,"NHIF"will"be"able"to"offer"both"in."and"out.pa@ent" comprehensive"benefits"to"all"kenyans."" 1. Formal%Sector8%NHIF"is"working"on"modali@es"of"implemen@ng"a"social"health" insurance"whereby"employers"will"match"their"employees"contribu@ons"at" an"appropriate"rate"for"the"kenyan"economy." 2. Informal%Sector8%NHIF"is"con@nuously"employing"mul@ple"marke@ng" approaches"including"group"membership"facility"and"use"of"agency" mechanisms"to"collect"premiums" 3. Indigent/Poor."NHIF"is"currently"implemen@ng"a%Health%Insurance%Subsidy% Programme%(HISP)"sponsored"by"the"World"Bank."The"objec@ve"of"the" subsidy"program"is"to"reduce"the"level"of"out"of"pocket"expenditure"among" the"targeted"23,"000"households." The"subsidy"program"will"run"for"two"(2)"years"from"2015"to"2017"and"the" findings"will"inform"the"scale"of"the"same"to"the"19%"of"the"popula@on" classified"as"absolutely"poor"by"2020."" 14"

Conclusion" 1. Private"health"insurers"are"key"players"in"the"drive"towards"universal" health"coverage"" 2. NHIF"is"keen"on"collabora@ng"with"private"health"insurers"especially"with" the"implementa@on"of"the"new"contribu@on"rates"to"offer"products"such" as"last"expense"to"all"members." 3. The"NHIF"experience"in"partnerships"jus@fies"the"need"to"ensure"that" Clear"statements"of"intent"and"purpose"are"key"to"the"success"of" partnerships"with"the"private"health"insurers" 4. NHIF"is"seeking"to"amend"the"legal"framework"so"as"to"have" representa@on"of"the"private"health"insurers"in"its"board"of" Management." 5. NHIF"con@nuously"engages"the"private"health"insurers"through"various" fora"such"as"healthcare"financing"workshops"and"stakeholder"mee@ngs."" 6. A"robust"Na@onal"Hospital"Insurance"will"s@mulate"compe@@on"amongst" private"health"insurers"which"will"result"in"a"fall"in"private"health" premiums"and"value"for"money"for"contributors." 15"

Launch%of%Health%Insurance%Subsidy%Programme%(HISP)% By%the%Cabinet%Secretary%for%Health%In%April%2014% 16"

Registra\on%of%the%Poor% 17"

Registra\on%of%Poor% 18"

Sensi\za\on%of%Beneficiaries% 19"

% % % % THANK%YOU% 20"