Former Health CS Mutahi Kagwe Criticises New Health Fund SHIF, Says, 'It Won't Work'

Former Health Cabinet Secretary, Mutahi Kagwe at a previous press briefing
Former Health Cabinet Secretary, Mutahi Kagwe at a previous press briefing
Afric CDC

Former Health Cabinet Secretary Mutahi Kagwe has strongly criticised the government's plans to replace the National Health Insurance Fund (NHIF) with the new Social Health Insurance Fund (SHIF), declaring, "It won’t work."

Kagwe questioned the necessity of shifting the national health insurance system, suggesting that insuring some government employees under private sector insurers could lead to the downfall of SHIF. He believes that public funds intended for health should continue to be channelled through NHIF.

“I have never quite understood the necessity of the changes that happened because I have always believed that considering that insurance is based on probability and medical insurance more so than anything else. Money from the exchequer meant for health purposes should be channeled through NHIF as it were,” he stated.

Kagwe specifically criticised the National Police Service’s decision to commission a consortium of insurers for their healthcare needs instead of using NHIF. He argued that the Ksh8.67 billion contributed by police officers is crucial for the national fund to cover more Kenyans.

“The reason why I believe that, for example, the police and other sectors of the economy should be part of the NHIF is because of the availability of health care across the country. If you tell a policeman today that he is secured by a private sector company and this policeman works in Kasipul Kabondo or in Mukurweinii area and the hospitals recognised by that private sector company do not exist in those areas, where do you expect a policeman to be served?” he questioned.

Kenya Police perform drills during a passing out parade
Kenya Police perform drills during a passing out parade
Kenya Police Service

Kagwe further added, “When you put Ksh8 billion, the premium that comes from the police force and you put it in NHIF, that means that NHIF will have sufficient money to pay the hospitals that serve it. But if you separate and say, take the police to the private sector and then charge the Ksh6,000 that we have been trying to charge people and then use only that money to cover the rest of the country, it won't work.”

Starting 1 July 2024, access to healthcare will transition to the new Social Health Authority (SHA) along with the SHIF, replacing the NHIF scheme which has been in place for over 57 years.

Under this new system, each household will be required to contribute 2.75 per cent of their income as a statutory deduction, with a reduced minimum monthly contribution of Ksh300, down from the previous Ksh500 required by the National Health Insurance Fund.

The fund is segmented into four cost categories, which the government asserts will be financed both individually and publicly.

The benefits package under the new SHIF includes a comprehensive range of services: medical outpatient services, end-of-life services, surgical services, specialised pharmacy benefits, medical inpatient and critical care services, accident and emergency services, optical services, mental wellness services, specialised essential diagnostic services, renal care services, overseas treatment, dental healthcare services, rehabilitative services, screening for common diseases, assistive devices, maternity and child health services, oncology services, and medical imaging services.

“Whatever name you give it, whether you call it national social insurance fund, national health insurance fund, whatever you call it, the long and short of it is how well funded is it and the bigger finance you create for it the better,” stated Kagwe.

The former health secretary's comments have sparked a heated debate over the future of national health insurance in Kenya. While proponents argue that SHIF will provide more comprehensive and equitable healthcare coverage, critics like Kagwe worry that the transition could disrupt access and financial stability.

Kagwe's insights have resonated with many who fear that the decentralisation of funds and reliance on private insurers might undermine the availability and quality of healthcare, particularly in underserved regions.

The government remains steadfast in its decision to implement SHIF, asserting that the new system will address inefficiencies and expand healthcare access to all Kenyans. However, the success of this transition will hinge on its execution and the ability to maintain robust funding.

Health CS Susan Nakhumicha with other ministry officials at the KMTC simulation lab. 17.11.2022.
Health CS Susan Nakhumicha with other ministry officials at the KMTC simulation lab. 17.11.2022.
Susan Nakhumicha
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