Kenya’s medical insurers blame ill-equipped hospitals for losses

Medical insurance firms in Kenya are blaming the rising number of poorly equipped hospitals using unregistered staff, for increased claims that have sunk more than half of the insurers into losses. The largest health insurer in Kenya, Jubilee Insurance, said many registered institutions are not hiring approved doctors, leading to higher costs and the increased likelihood of a wrong diagnosis subjecting patients to multiple visits to hospitals. “Many hospitals are either not properly registered or have no properly approved doctors. We can’t even know the quality of the services they offer,” said Jubilee chairman Nizar Juma. “We need to increase surveillance so that everybody plays by the rules. That is the sure way to increase coverage.” An April 2019 report by Nairobi County Assembly Health Services committee shows that out of the 9,043 health facilities in Nairobi City, only 1,079 were registered and licensed to operate. This means the more than 3.5 million people living in Kenya’s capital are more likely to seek services from health facilities with no quality of service assuredance. Similar cases have been reported across the country, though no comprehensive data exists. Twelve of the 21 medical insurers operating in Kenya posted a combined underwriting loss of KSH2.1bn ($20.7m) in the year ended December 2018, weighed down by the industry’s average loss ratio of 76%. The loss ratio is highest in medical insurance, compared with other insurance classes, and the industry’s regulator, the Insurance Regulatory Authority, has put the average industry average ratio for the last three years at 61.8%. Mauritius Union Assurance (MUA), formerly Phoenix East Africa Assurance, said in April that medical insurance will not be included as it makes a KSH3bn ($30m) investment in Kenya. “We want the market to re-adapt itself first, because premiums are so low yet claims are so high,” MUA chief executive for Kenya and east Africa market Ashraf Musbally said. CIC, another insurer offering medical covers, said insurers are likely to raise their premiums if they are to survive in the market. Currently, none of the medical insurers in Kenya have set professional protocols for the medical services and drugs but simply pay for what is billed for, according to Pharmaceutical Society of Kenya president Dr Louis Somoni Machogu. The body is made up of government- registered pharmacists. “They (the insurers) have no way of ensuring compliance of their shortlisted providers in their panels, to national best practice standards and protocols. Therefore, they have no way of establishing if they are getting value for money,” said Dr Machogu. He added that this exposes insurers to fraudsters as well as counterfeiters of drugs, and the proliferation of quacks and hospitals without the right professionals, in an industry already grappling with high levels of fraud. “It requires that the insurance sector and professional bodies work together through self-regulation to ensure patients, payers and the profession get value,” said Dr Machogu. Another headache has been the rising cases of mothers delivering by caesarean section. Government data released in April shows there were 155,100 caesarean cases – 40% up on 2014. Adding to the pain of weak facilities and fraud is the lack of a legal framework to make it compulsory for doctors to prescribe drugs by chemical or generic name instead of brand name. Jubilee estimates that Kenyan patients are paying at least 50% more for their medications due to over-prescription of branded drugs. In August 2018, an Ethics and Anti-corruption Commission report showed that hospitals are charging up to 50 times more when a patient turns up with insurance card cover, as opposed to when they are paying in cash. The Kenya Medical Practitioners and Dentists Board presented proposals before parliament in January, calling for fees charged by private practitioners to be reduced by 20%. The country has 10,820 health facilities to serve about 45 million people, with private medical clinics accounting for 31.8% of the total, according to government data. Last year, medical clinics increased by 18.6% to 3,646, out of which 94.2% were privately owned.

Kenya’s medical insurers blame ill-equipped hospitals for losses

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