The BGA Kenya Team, led by Managing Director Dickson Omondi, wrote an update to clients on President William Ruto’s health care commitments.

Context

  • Kenyan President Ruto delivered a state of the nation address November 21 highlighting the ongoing transition to a new health care system as one of his government’s priorities. The president committed to address new challenges as his administration implements a universal health coverage (UHC) system. The transition has been marked by a slow uptake in registrations by patients and providers, information gaps and inconsistencies related to claims coverage and management and public concern about corruption risks.
  • The transition from the National Hospital Insurance Fund to the Social Health Insurance Fund, the core element of the UHC, has been plagued by funding challenges. These have impacted debt payments by the defunct National Hospital Insurance Fund and claims settlements by the newly established Social Health Authority. Ruto’s commitment to settle pending Social Health Authority claims and historical debts owed by the National Hospital Insurance Fund is an important step that will shift attention to addressing structural transitional challenges.

Significance

  • Although delayed due to court proceedings, the transition to UHC ushers in a new health care management and financing framework. The transition to universal health coverage, a key pillar of President Ruto’s Bottom-Up Economic Transformation Agenda, is anchored on four pieces of legislation: the Social Health Insurance Act 2023, the Primary HealthCare Act 2023, the Digital Health Act 2023 and the Facility Improvement Financing Act 2023. It provides for the mandatory registration of all Kenyans, with additional protections for emergencies and chronic and critical illnesses. The legislative framework also aims to increase health care funding, promotes the use of technology in health care provision and elevates primary health care efforts.
  • Beyond legacy debts and transitional challenges, funding for health care is set to increase in the long-term. One of the key challenges impeding health care delivery is inadequate financing. The National Hospital Insurance Fund’s accumulation of large debts was partly a result of this challenge, with corruption being a major contributor. In his address, Ruto committed to disburse funds to retire National Hospital Insurance Fund legacy debts and accruing Social Health Authority claims. Going forward, the Social Health Insurance Act creates three mechanisms to finance health care: the Primary HealthCare Fund; the Social Health Insurance Fund; and the Emergency, Chronic and Critical Illness Fund. Contributions to the Social Health Insurance Fund are pegged at 2.8 percent of employee gross salaries. This is a significant increment compared to contributions under the defunct National Hospital Insurance Fund. The electoral impetus for Ruto to successfully deliver on the health care reform further incentivizes increased budgetary allocations to the sector. The new health care system is therefore expected to mobilize a significant pool of resources that could catalyze investments in the health care value chain.

Implications

  • The government’s commitment to the health care transition along with the long-term projection for increased funding create opportunities for investment across the health care value chain. Ruto’s focus on delivering health care reform and the expected increase in health care funding in the long-term will facilitate the recruitment and development of much-needed human resource capacity in the sector and expand investment in primary health care. It will also lead to the increased demand and ability to procure medicine, medical devices, equipment, technology and other relevant resources. This creates opportunities for the private sector to offer goods and services, innovate in the digital health space and build partnerships with local manufacturing firms to spur domestic growth and job creation.
  • Transitional challenges highlight opportunities for continued private sector investments to complement the public health care system. Challenges include existing capacity gaps in public health care, ranging from adequacy and capacity of personnel, inadequate infrastructure and medical facilities and limited resource endowments. These create conditions for continued investment in alternative medical facilities and private medical insurance schemes to operate alongside the public health care system.

We will continue to keep you updated on developments in Kenya as they occur. If you have any comments or questions, please contact BGA Kenya Managing Director Dickson Omondi at domondi@bowergroupasia.com.

Best regards,

BGA Kenya Team

A small ginko leaf

Managing Director, Kenya

Dickson is a leading expert on the political economy, business and regulatory affairs of countries across Africa, with more than 25 years of experience in political party development, legislative strengthening, governmental accountability, public policy and civic engagement. He is a strategic leader and a firm believer in the continent’s economic and political potential, reinforced by his experience traveling and working in more than 16 countries in sub-Saharan Africa. Dickson works alongside multinational companies, governments and civil society to find mutually beneficial solutions for all stakeholders. His team’s strategic advocacy across a broad range of sectors helps organizations overcome challenges and ... Read More