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Citizen Weekly

Tuesday 5 May 2015

Unions differ on how to run NHIF billions

The umbrella public workers union has questioned the ability of the National Hospital Insurance Fund to efficiently manage the Sh2.3 billion it will be collecting from tax payers every month.
The Trade Union Congress (TUC) demanded an overhaul of the fund to give it the capacity to handle the billions it will be collecting as premiums.
Mr Wilson Sossion, the TUC secretary-general, said his union was opposed to the enhanced deductions, while Mr Francis Atwoli of Cotu said he would wait to see how NHIF will manage the funds.
TUC represents workers in the public sector, including teachers, dock workers and university staff, while Cotu represents those in the private sector.
Despite the growing anxiety in the wake of enhanced deductions, starting from April, NHIF Chief Executive Simon ole Kirgotty said the fund had the capacity to absorb and disburse the billions of shillings it has started receiving for the welfare of contributors.
The increase in premiums will see NHIF collect a total of Sh2.3 billion every month, up from the Sh800 million it used to collect until March.
Mr Sossion said TUC was opposed to the new premiums, which will now see the lowest paid worker part with Sh150 and the highest contributor paying Sh1,700.
Mr Sossion accused NHIF of backtracking on several issues agreed on during a meeting in Naivasha in January when TUC demanded an overhaul of NHIF for accountability purposes and changes in the NHIF Act, among other things.
“NHIF went ahead and gazetted the new rates despite us agreeing that this be put on hold until our demands are met,” he said in a telephone interview. “The whole process was flawed and the NHIF has no capacity to handle it.”
However, Mr Atwoli said workers were consulted during a meeting with the national insurer in Mombasa. During the talks, they agreed, among other things, to have a NHIF members’ wing in every health institution in the country.
“I cannot comment on their capacity to handle the high amount of money but I will do so if they fail to fulfil what we agreed on,” he said.
Mr Atwoli said all workers were consulted and agreed on the new deductions with a deal that deductions be made on basic pay and not gross income.
NHIF, which has been paying hospital bed charges for members, has said it will use the larger pool of funds to introduce cover for inpatient and outpatient services as well as other specialised treatment for diseases like cancer. The beneficiaries will also be entitled to dialysis services.
But Mr Kirgotty sought to calm public fears and said NHIF had carried out internal changes to give the outfit the capacity to handle the cash and manage it properly.
“We have made several reforms, including automating our system to create a clear audit trail,” said Mr Kirgotty.
“I want to assure [Kenyans] that we will be accountable and ensure that the money is well managed,” he added.
Previously, the fund, now with a membership of 5.2 million Kenyans, including members of the disciplined forces, used to earn between Sh800 million and Sh900 million a month before it increased its premiums.
“If all contributors agree to pay, then we will earn Sh2.3 billion per month, which is not a lot of money since health care is very costly,” Mr Kirgotty said by phone.
He said the fund had already signed contracts with 1,600 health institutions, mostly public and missionary hospitals.
According to him, private hospitals are “quoting heaven”.
He said Kenyans would begin to enjoy comprehensive medical cover from June, although deductions started with the April salaries.
Major scandals have eroded public confidence in NHIF, but the CEO said the fund had reformed itself to ensure accountability.
The scandals at NHIF have seen its former CEO, Mr Richard Kerich, and four other executives charged in court with fraud.
The then President Mwai Kibaki, ordered investigations into the fund in May 2012 when it became clear medical service providers who received the biggest amounts of money from the kitty did not have the outlets they claimed to own. Mr Kerich and five others were then suspended.
As investigations progressed, it emerged that Meridian Medical Centre received Sh116.9 million, with Sh30 million of the cash allocated to clinics that it was yet to open.
The biggest amount, however, went to Clinix Health Care, which received Sh202 million, of which Sh91 million went to non-existent clinics.
In Bomet, the Kenya National Union of Teachers Bomet County branch executive secretary Joseph Malel Langat regretted that under the new scheme, the Teachers Service Commission was deducting the contributions based on gross income rather than basic salary.

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