By Samwel Doe Ouma @samweldoe
The 2018 Budget has brought changes to the tax environment as government accelerates plans to attain Universal Health Coverage (UHC) for all Kenyans by the year 2022. Cs Rotich announced that healthcare has been allocated Sh 90 billion or 4 per cent of the budget, a 48 per cent increase from 2017/2018 allocation to health.
This increased allocation is in line with planned expansion of health infrastructure, as the country rolls out UHC aimed activities. Kenya aims to achieve UHC by 2022. “The Government intends to roll out Universal Health Coverage to all households by 2022 so as to guarantee access to equitable, affordable and high- quality health and related services for all citizens.” CS Rotich said in his budget speech on UHC.
According to the World Health Organization, “UHC means that all individuals and communities receive the health services they need without suffering financial hardship. It includes the full spectrum of essential, quality health services, from health promotion to prevention, treatment, rehabilitation, and palliative care.”
Kenya’s budget on health has been increasing for the past five years, hitting an all-time high in 2018/2019 fiscal year (FY). In 2013/14, the health budget stood at Sh 41.70 billion that increased to Sh 54.10 billion in 2014/15. During the 2015/16 FY, the government allocated Sh 61.70 billion to health while 2017/18 FY health budget amounted to Sh 65 billion.
The increase is explained by planned expansion of health infrastructure, national referral services and free primary healthcare and achieving UHC. According to the World Health Organization, “UHC means that all individuals and communities receive the health services they need without suffering financial hardship.
It includes the full spectrum of essential, quality health services, from health promotion to prevention, treatment, rehabilitation, and palliative care.” With UHC, the government aims to protect Kenyans from being pushed into poverty due to costs of healthcare services.
In the Budget, the Program for Basic Insurance for Poor and Informally Employed People will receive Sh 800 million, fourteen per cent increase from the allocation of 2016/17 FY. Expanding access to affordable healthcare has been allocated 2.0 billion to fill the void of lack of basic requirements such as essential medicines operating theatres and supplies.
Sh 13.7 billion has been earmarked for free maternity programme. This is 8.6 per cent higher than allocations in 2017/18. Free primary healthcare will receive Sh 2 billion. This amount is over five times higher than allocations in 2017/18.
The increase is underpinned by planned expansion of access to primary health services under “Linda MaMa” program to mission and private hospitals and to enlist community health workers and volunteers to boost healthcare service provision at the grassroots level.
However, shortage of specialists is seen as one of the challenges to realization of UHC. The budget has allocated Ksh, 2.9 billion for Doctors, Clinical Officers and Nurses’ internship program. The government also plans to train more doctors and source for specialists from outside the country to address the existing gaps.
The Economic Survey 2018, a publication of the Kenya National Bureau of Statistics (KNBS) reveals that Kenya is facing a burden of Non-Communicable Diseases (NCDS). In a bid to address this challenge, the treasury has allocated Sh7 billion to computed Tomography scanners equipment to help in early diagnosis and treatments of cancers.
Sh400 million has also been allocated to establishment of a national cancer institute. To improve services at the referral facilities, Kenyatta National Hospital has been allocated Sh11.7 billion, Moi Teaching and Referral Hospital Sh7.7 billion, Kenya Medical Research Institute Sh2.2 billion while Kenya Medical Training Colleges will receive Sh4.7 billion.
Funding the Health expenditure budget
The government plans to fund most of these projects through taxation. The budget has therefore outline tax increment on selected items to raise money to fund government operations.
Finance Cabinet Secretar y announced an additional 2 per cent tax on mobile money transactions. These transactions now attract 12 per cent tax from 10 per cent previously.
Car importers have also been slapped with 30 per cent increase in excise duty on vehicles with engine capacity exceeding 2500 cc. All bank transactions exceeding Sh 500 million will attract a “Robin Hood” tax of 0.05 percent, Rotich said.
The budget also acknowledges the limited budgetary space to implement the “Big Four” and seeks to leverage on partnerships through public private partnership framework (PPP) with both private and development partners to fund the big four.
Through the PPP framework, Managed Equipment Services (MES) has seen 98 hospitals equipped with medical equipment to enhance diagnosis and treatments.
Role of NHIF in UHC
The government intends to roll out Universal Health Care to all households by 2022 to guarantee access to quality and affordable healthcare by reconfiguring National Hospital Insurance Fund (NHIF) and reforming the governance of private hospitals to align them with UHC.
According to the Economic Survey 2018, enrollment to NHIF rose by 11.1 per cent to 6.8 million in 2016/2017 financial year from 6.1 million the previous year. However, formal employment sector contributed 56.8 per cent of the growth, meaning insurance uptake in the informal sector remains low. According to the Insurance Regulatory Authority, Kenya has 32 Medical Insurance providers.
Currently, insurance penetration stands at 2.73 per cent against a world average of 6.28 per cent. The government intends to cover 13 million households and their beneficiaries through the National Health Insurance Fund (NHIF) by 2022 according to President Uhuru Kenyatta’s inaugural speech for his second term.
NHIF, Kenya’s national health insurer, intends to “redesign healthcare models” in a bid to align the institution to government promise to achieve Universal Health Coverage (UHC), NHIF says in its Strategic Plan 2014 – 2018. NHIF Chief Executive Officer Mr. Geofrey Mwangi said Kenya has adopted the “social health insurance model” to achieve UHC.
Under the model, Mwangi said, the government plans to enlist citizens to an affordable health insurance cover. With this, the government aims to reduce citizens’ out of pocket expenditure in financing healthcare services. In the social health insurance model, the government intends to pool resources and “ensure that populations do not suffer catastrophic health expenditures when they need treatment from the health facilities,” NHIF says.
The Government is the largest of the three main medical service providers operating in Kenya, the other two being the Commercial Private Sector and Faith Based Organizations (FBOs). County governments are responsible for facilities classified between level 1 and level 5.
Level I are community units, Dispensaries are level 2,Health Centers, primary referral units, secondary referral units and tertiary units which are level 3, 4 and 5 respectively. Fourth schedule of the constitution explicitly states that county government are mandated to run level 1 to 5 with functions covering management of pharmacies, and the health facilities.
UHC piloting
The Government has rolled out UHC piloting in four counties to examine capacity of NHIF, requirements on infrastructure, commodities and personnel to inform a national roll out.
The treasury health-spending budget has also set a side Sh2.5 billion to pilot UHC in four counties beginning June 2018. MoH has selected Kisumu, Machakos, Nyeri and Isiolo Counties as pilot zones for UHC.
