Discussion Paper No. 42 of 2004 on Healthcare Financing Through Health Insurance in Kenya: The Shift to A National Social Health Insurance Fund

Abstract

The overall goal of the Government of Kenya is to promote and improve the health status of all Kenyans by making health services more effective, accessible, and affordable. To address problems in the health sector, and to make healthcare accessible and affordable, the government, in the early year after independence, instituted and implemented various healthcare reforms, among them setting up of health insurance through the National Hospital Insurance Fund (NHIF). However, the focus of NHIF has been mainly on formal sector employees. This has left out those in the informal sector, those in agriculture, and pastoralists. The government plans to transform the current NHIF to a National Social Health Insurance Fund (NSHIF) as a way of ensuring equity and access to health services by the poor and those in the informal sector, who have been left out for the forty years that the NHIF has been in existence. In view of the proposed transformation, this paper aims to lead policy makers and programme planners through the process of evaluating the usefulness and feasibility of a social health insurance system. The paper offers insight into the process of a successful implementation of such as scheme by addressing the foreseen obstacles and issues of desirability and feasibility in assessing the appropriateness of social health insurance. It also addresses the likely impact on the economy, the health sector and the various stakeholders, after introduction of the insurance scheme. The paper reviews the experiences of other countries and draws lessons from those experiences. The paper finds that most of the conditions for setting up a social health insurance in Kenya are not yet in place and a lot needs to be done to meet these conditions. In addition, there are likely to be both positive and negative impacts on various stakeholders. The paper recommends that the decision to introduce universal health insurance be premised on a careful and thorough assessment of all the issues being raised, and implementation based on clearly outlined stages.