Compilation of examples of CBHI and MHI: Kenya Page 3 AcknowledgementGIZ Health Sector Programme in Kenya would like to acknowledge all the organisations, who areimplementing either the community based health insurance schemes or micro-insurance scheme orboth in Kenya, for the time and information that was provided to us for use in this document. Weappreciate these organisations effort in serving their targeted group and making a contributiontowards the community.The programme also appreciates Ms. Alisha Rahmatulla (Intern) for compiling the examples ofvarious forms of health insurance in Kenya; Ms. Hellen Were (Consultant) for putting it under acontext and Ms. Atia Hossain (Head of Healthcare Financing Component) for overall guidance inthe compilation effort.Last but not least, the Programme acknowledges Ms. Olivia Okech (Communications Officer) forputting the document together, and Dr. Heide Richter-Airijoki (Programme Leader) for approval ofthe effort.
Compilation of examples of CBHI and MHI: Kenya Page 4 Table of ContentPageIntroduction ................................................................................................. 5Background …………………………………………………………… 5Definitions ……………………………………………………………. 5Features ………………………………………………………………. 5Examples ………………………………………………………………… 8Global: East African experience …………………………………….. 8Kenya: CBHIs and MHIs …………………………………………… 9Kenya: Health Insurance Platform ………………………………………... 10Conclusion ……………………………………………………………….. 11Annex ………………………………………………………..................... 12References ………………………………………………………............... 13
Compilation of examples of CBHI and MHI: Kenya Page 5 1. INTRODUCTIONIn the wake of Kenyan Government commitmentto providing free healthcare aiming the maternalservices, primary healthcare and the indigentpopulation, sustainable ways of funding for healthcare other than traditional taxation and donorfunding need to be looked into. This paperexplores the Community based health funding as away of pooling resources and providing healthcoverage to the low income groups in the informalsector by reviewing literature on various countries’experiences. The main aim of the paper is thus todocument, under one roof, the variousCommunity Based Health Insurance and MicroHealth Insurance schemes being practiced andimplemented in Kenya.1.1 BackgroundHealth financing has attracted a lot of attention inthe recent past as countries aim to provideaccessible, affordable and quality health care to alltheir citizens. Health financing refers to thecollection of funds from various sources (e.g.government, households, businesses and donors),pooling them to share financial risks across largerpopulation groups, and using them to pay forservices from public and private health-careproviders (WHO, 2000). The objectives of healthfinancing are to make funding available, ensurechoice and purchase of cost-effectiveinterventions, give appropriate financial incentivesto providers, and ensure that all individuals haveaccess to effective health services (Carrin andJames, 2005). Kenyan health sector continues tobe predominantly financed by private sectorsources including by households’ out-of-pocketspending (RoK, 2011). Only 18% of thepopulation is covered by both NHIF and privateinsurance companies. The remaining majority ofpopulation mostly poor, access health carethrough out-of –pocket or fees for services thatcan be a major source of impoverishment (RoK,2011). Community Based Health Insurance andMicro Health Insurance organizations have risento target this population excluded from the formalhealth coverage.1.2 DefinitionsThe term community-based health financing(CBHF) has evolved into an umbrella term thatcovers a wide spectrum of health financinginstruments (Hsiao 2001; Dror 1999).The common characteristics of various forms ofCBHF are that they are run on a non-profit basisand they apply the basic principle of risk sharing(Jakab and Krishnan, 2001). Some schemes areintegrated with the provider while others operateoutside of the service providers. These are termedprovider-based and community-based schemes,respectively.Micro health insurance (MHI) is a form ofmicro-insurance in which resources are pooled tomitigate health risks and cover health care servicesin full or in part. It is also referred by differentnames such as community-based health insurance,mutual health insurance, community-based healthfinancing, and community health insurance(Preker et al, 2002). Services are delivered througha variety of different channels, including smallcommunity-based schemes, credit unions or othertypes of microfinance institutions, but also byenormous multinational insurance companies(Churchil, 2006).1.3 FeaturesThere are a number of reasons behind the growthof interest in CBHF schemes in low-incomecountries, including the widespread imposition orincrease in user fees for government health careservices that occurred during the 1980s and 1990sin many low-income countries, particularly in sub-Saharan Africa, Kenya, Uganda and Tanzaniaincluded the increasing recognition of theCBHF is often loosely referred as:v Micro insurancev Community health fundsv Community health Insurancev Mutual health organizationsv Rural health insurancev Revolving drug fundsv Community involvement in user feemanagement
Compilation of examples of CBHI and MHI: Kenya Page 6 significant scale of use of private sector providers,even in relatively poor communities, the collapseof government health care services in certaincountries e.g DRC Congo due prolonged conflictthe difficulties faced in expanding formal healthinsurance coverage to people who are outside offormal sector employment (Preker, 2004).Musau (1999) argues that the decentralizationprocess unleashed in these countries to empowerlower layers of government and the localcommunity further fueled their emergence. Theinefficiency in the public health care systemcaused patients to avoid accessing lower levelfacilities first due to the low fees charged at allfacilities (primary, secondary, tertiary). In addition,the district or regional hospital may have been theonly health facility that was geographicallyaccessible to the local community and lastly,insufficient funding for the more cost-effectiveprimary health care facilities lowered the quality ofservice they could provide, (inadequate supply ofdrugs and other commodities, inadequate staff)which also discouraged their use (Musau, 1999).The success of community-based microcreditschemes may have also contributed to theemergence of community-based health initiativesdesigned to improve the access through risk andresource sharing (Dror and Jacquier, 1999).In Kenya, the reduction in Government subsidiesand increasing operation costs of missionhospitals (FBOs) led to the rise of the first CBHFscheme. It was started by Chogoria missionhospital in partnership with Apollo insurance in1991 (Musau, 1999). All CBHF schemes in Kenyaare community based; however, most of themwere initiated within integrated developmentactivities (Musau, 1999).Assessing the overall impact of community-basedhealth insurance schemes is very difficult becausein most cases, community-financing arrangementsare not registered, and therefore centrallymaintained data do not exist (Jakab and Krishnan2004). Other reasons are lack of proper legislativeframework, policies and guidelines as to howCBHIandMHIschemesshouldbeoperated. This is further complicated by variationsin structures and services offered by the schemes.Literature review suggests that Community BasedHealth Insurance has several strengths; Mobilizesresources thus improving access to health care bylow income people, improves financial protectionby reducing out of pocket payment and combatssocial exclusion by extending coverage to a largenumber of rural and low income populations whowould have otherwise been excluded fromcollective arrangements to pay for health care. Astudy conducted by Jutting (2003) in rural Senegal(Thies region) showed that community healthfinancing through prepayment and risk-sharingreduced financial barriers to health care as wasdemonstrated by higher utilization and lower outof pocket. It further showed that risk pooling nomatter how small- scaled, could improve financialprotection for the poor. Arhin (1995) in assessingthe viability of rural health insurance as analternative to user fees also found that the schemein Ghana removed a barrier to admission and ledto earlier reporting of patients and increasedutilization among the insured.CBHI is also useful as a component of a healthfinancing system involving other instruments.Community-based health insurance schemes maycomplete or fill the gaps of other health financingschemes (social health insurance or governmentfinancing), or they may be a first step toward alarger-scale system (Gottret and Schieber, 2006).Community-based health insurance may be veryuseful to supplement other forms of medicalStrengths of CBHF:v “community” people is the targetv Improves accessv Reduce out-of-pocket paymentv Mobilization of insufficient fundDifficult Assessment of CBHF:v Non registration of schemesv Limited datav Variability of schemesGrowth of CBHF: Why?v Increase in user feesv Dysfunctional government health carev In-effective health insurancev Absence of mechanism to provide healthservice to in-formal sectorv Decentralization
Compilation of examples of CBHI and MHI: Kenya Page 7 coverage. Community-based schemes cannotprovide medical coverage to the whole population,but can help meet the needs of specific categoriesof people, such as the rural middle class andinformal workers (Bennett, Kelley, and Silvers2004). For this reason, in many countriesgovernments try to launch community-basedhealth insurance schemes (as in Rwanda) or useexisting ones to extend health coverage to certainpopulations. In Tanzania, for instance, theCommunity Health Fund targets informalworkers, while workers in the formal sector arecovered through a new social health insurancescheme (Bennett, Kelley, and Silvers 2004).Musau (1999) in his study of Community Based HealthInsurance Schemes in East Africa; 3 in Tanzania, 2 inUganda and 1 in Kenya, attributes long-termsustainability of the schemes to their design andmanagement.He further says that the problems experienced by theschemes was not a failure of the concept of health insuranceand its applicability to low-income communities, but weredue to difficulties encountered in their design andimplementation.CBHI has weaknesses: Limited protection formembers, sustainability, limited ability benefit forthe poorer part of the population and limitedeffect on delivery of care (Gottret and Schieber,2006). Eckman (2004) in his systematic review of36 papers and 178 schemes of CBHI found littleconvincing evidence that voluntary CBHI couldbe a viable option for sustainable financing ofprimary health care in low-income countries. Theywere found to mobilize insufficient amounts ofresources. However, the study found evidencethat CBHI provided financial protection byreducing OOP spending and by increasing accessto health care, as seen by increased rates ofutilization of care. The very low and diminishingpopulation coverage rates, however, put theimplications of this finding in doubt (Eckman,2004).An extensive WHO study was made in 82 non-profit health insurance schemes for people outsideformal sector employment in developing countries(Bennett et al. 1998). It was observed that veryfew of these schemes covered large populations oreven covered high proportions of the eligiblepopulation unless government or others facilitatedtheir membership through subsidies (Bennett et al.1998).CBHF: seen from a different glassv Complement social health insurance orgovernment financingv Supplement medical coverageSustainability of CBHF can be attributed to thedesign and management, not on the failure of theconcept of health insurance.Weaknesses of CBHI:v Limited member protectionv Sustainabilityv Limited benefitv Less control on service provision
Compilation of examples of CBHI and MHI: Kenya Page 8 2. Examples2.1 Global: East African Experience of CBHITanzaniaThrough its health sector reform initiative, theTanzanian government introduced theCommunity Health Fund (CHF) in 1995 as a newelement in the country’s health financing strategy.The CHF is a district-level voluntary prepaymentscheme, introduced in parallel with user fees atpublic health facilities, that targets the 85% of thepopulation living in rural areas and/or employedin the informal sector. It was introduced inTanzania as part of the Ministry of Health’s(MOH) endeavor to make health care affordableand available to the rural population and theinformal sector. The scheme started in 1996 withIgunga acting as a pilot district, and was laterexpanded to other districts (MOH, 1999).Several studies have shown an improvement in theprovision of and access to health care servicesafter the introduction of CHF. For example, Shaw(2002) shows that the CHF fund helped topurchase microscopes, reduce drug stock-out, andimproved the availability of or introduced otherimportant equipment and supplies in varioushospitals. Other studies have also shown anincrease in health service utilization for CHFmembers (Msuya, Jutting et al. 2004; Musau 2004).However, CHF is faced with low enrolment andcoverage (MOH- Tanzania, 2003). The barriers toenrolment identified by evaluations are: awidespread inability to pay membershipcontributions, the poor quality of availableservices, a failure among communities to see therationale for protecting against the risk of illness,and a lack of trust in CHF managers (Mwendo2001; MOH- Tanzania, 2003).RwandaRwandan experience is arguably one of the mostdramatic recent experiences of CBHI-basedNational Health Insurance in sub-Saharan Africatoday, at least in terms of population coverage.After successfully initiating pilot schemes in 1999,the Government decided to go to scale in a rapidfashion. As of October 2007, it is reported thatthe schemes had enrolled about 75% of the totalpopulation. By 2009, the schemes coverage hadexceeded 86%, reduced out-of-pocket spendingfor health from 28% to 12% of total healthexpenditure, and increased service use to 1·8contacts per year. Over the last decade in Rwanda,deaths from HIV, TB, and malaria dropped by 80percent, maternal mortality dropped by 60percent, life expectancy doubled -- all at anaverage health care cost of $55 per person peryear, which could be attributed to the success ofthe CBHI scheme (MOH- Rwanda, 2010)To support the growth of the schemes, the Government ofRwanda has created a special solidarity or risk-pooling fund,into which transfers from the Ministry of Finance via theMinistry of Health are made to cover the costs of indigentsand people living with HIV/AIDS. The Global Fund tofight AIDS, Tuberculosis and Malaria is providing financialsupport for five years to cover the Government subsidy.Tanzanian CBF: key features and resultsv Government initiativev Voluntary pre-payment schemev Parallel to user feesv Target: rural areas, informal sectorv Started as pilot, later rolled outv Marked improvement in service provision,utilizationv Low enrollment, coveragev Inability to pay membership contributionsv Poor service qualityv Lack of understanding the rationale forprotecting against risks of illnessv Lack of trustRwandan CBHI: key features and resultsv Government initiativev Started as pilot, later rapid rolled outv Marked improvement in utilization, enrollmentv Reduction in out-of-pocket spendingv Average health care cost: 55USD per annumv Government subsidy for HIV/AIDS, Malariacontinued
Compilation of examples of CBHI and MHI: Kenya Page 9 2.2 Kenya: CBHIs and MHIsThe information was collected through telephone interviews with providers and also from their websites(when available). (Please refer to Annex for details)Name of scheme Target population Starting Date Premiums per annum Cover Limits PartnersMICRO HEALTH INSURANCE SCHEMESFaulu Afya Kenyans in the informalsector unable to affordNHIF and privateinsurance PremiumsOperated 3micro-insuranceprograms since2005• Financedthrough a loankshs 7000• Kshs 200 co-payment• Unlimited outpatient• Kshs 200,000 inpatient limit• Kshs 10,000 marriage benefit• Kshs 20,000 chronic illness cover perillness per year• Kshs principle life benefit• Kshs. 20,000 last funeral expenseBritish American insurance–administers and processesclaimsNorthstar alliance Truck driversSex workersRoadside corridorcommunity members2005 TNT ExpressWorld Food programPharm access FoundationInternational Transportworkers federationUNAIDSBima ya Jamii SACCO membersMFI clientsJua Kali(open air) artisansPeople in rural areas andinformal sector2008 Kshs. 3650 per year • Kshs 15,000 co-payment for surgery• Inpatient care- no monetary limit.Maximum cumulative 180hospitalization days• Kshs 30,000 last funeral expense• Kshs 100,000 accidental cover• Kshs. 100,000 disability Insurancecover• Kshs 2000 per week for the durationmember hospitalisedCo-operative InsuranceNHIFMFIsSACCOsSwedish cooperation CentreKenya WomenFinance Trust(KWFT)Cooperative InsuranceNHIFKenya EcumenicalChurch Loan Fund(ECLOF)COMMUNITY BASED HEALTH INSURANCE SCHEMESSupport for TropicalInitiatives in PovertyAlleviation (STIPA)Low /middle incomeearners(informal sector)Living with HIV/AIDS2006 Product A- Kshs 2000per yearProduct B- Kshs 2400per yearProduct C- Kshs 2700per yearKshs 5000 outpatient cover limit per year STIPA and health providersACK developmentservices((ADS)NyanzaMembers of ruralcommunity; nyanza1997 Product A- Kshs 600Product B- Kshs 960Product C- Kshs 1200Outpatient cover only at dispensaries andhealth centres.Product A- Kshs 8000 limitProduct B- Kshs 8000 limitProduct C- Kshs 10,000 limitAfya Yetu Initiative(AYI)Residents of Nyeri andKirinyaga counties2009 Kshs 2300 TotalNHIF= kshs 1920CBHF=kshs 380Inpatient cover at NHIF accreditedhospitals.20,000 per visit per beneficiaryNHIFNETWORKWestern RegionChristian communityservice (WRCCS)Rural communities inwestern Region1997 Product A-600Product B- 600Product C- 800Outpatient cover onlyJamii Bora SACCO The poorest of the poorwho cannot access primaryquality health care in ourpoor set-ups/slums.2001 In-patient cover –Kshs.5,200In & Out patient cover– Kshs.12,500ACK ChristianCommunity servicesEldoret region(ELRECO)Subsistence farmers inEldoret Region2005 Kshs, 1200 Outpatient cover only MOHVI agro forestryGood NeighboursMin. of Livestock andFisheriesAMPATHConstituency AIDs ControlCouncil
Compilation of examples of CBHI and MHI: Kenya Page 10 3. Kenya: Health Insurance PlatformIn the Vision 2030 under the social pillar, Kenya’svision for health is to provide “equitable andaffordable healthcare at the highest affordablestandard” to its citizens. The key areas of focusare: (a) access including actual availability ofservices and financial access - targetingaffordability, (b) equity, (c) quality, (d) capacity,and (e) institutional capacity (RoK, 2010). Thecurrent President of Kenya in his speech duringthe official opening of 11th parliament stated thathis government would progressively roll out itscommitment to provide free primary healthcare toevery Kenyan by 2020, starting with children,persons with disability, pregnant women andbreastfeeding mothers. Free medical care impliesmore financial resources to invest in humanresource for health, medical and non- medicalsupplies, health infrastructure and equipment.Given the limitation in financing through taxes,the Government needs to explore and invest inalternative methods of mobilizing resources.Free medical care has also put demand on theurgency for universal health coverage in Kenya.Health Care finance strategy (RoK, 2009)recognizes that no single healthcare financingsystem can work and that several mix of solutionsneed to be applied in order increase healthfinancing and also ensure access to quality healthcare by all Kenyans.It recommends the following;• Improving efficiency, transparency and accountability in the current health systems at NHIF andMOH.• Strengthening revenue collection by; 1) establishing a new revenue collection agency to collect andmanage the overall pool of Health care financing. 2) review the case for ear marked taxes and 3)explore health bonds and other financing instruments• More effective risk-pooling; 1) through transformation of NHIF to National Health services trustthat would oversee overall health care financing system.2) establishment of community health fundsto be insured under National Health services trust above.• Harnessing the informal sector financing potential; supporting reforms in NHIF to penetrateinformal sector and increasing coverage from 24% to 70%.• Broadening the benefits package; NHIF to broaden package to cover both inpatient and outpatient• Strengthening provider incentives;• Protecting the poor and vulnerable groups by; 1) better Identification of poor that are to beregistered for social health insurance, 2) strengthening of service provision to the poor, 3) eliminationof user fees for the poor and, 4) covering the cost of providing health to the poor through socialhealth insurance approach.• Improving aid effectiveness; by ensuring Donors make more use of country mechanisms• Ensuring sustainability through continuous review and long-term planning horizonsFrom the above, the strategy has placed much ofthe health financing responsibility on MOH andNHIF. NHIF is to provide cover for those in theformal sector (together with private insurance),informal sector (expected to increase coveragefrom 24% to 70%) and also to the poor throughSocial Health Insurance. Given the governanceand structural reforms that are warranted forNHIF to perform as per the members’expectations, it may be extremely ambitious toexpect that NHIF would be able to implement allthe above roles in the immediate future. Inaddition, the challenges of arriving at a nationalconsensus for a scheme’s structure; incomeinequalities; weak oversight capacity, and poorinfrastructure may limit the facilitation ofcollections, re-imbursements and monitoring.Given these difficulties, CBHI and MHI schemescould be probably options for extending insurancecoverage in Kenya and particularly among therural and informal sectors of the society.
Compilation of examples of CBHI and MHI: Kenya Page 11 4. ConclusionKenyan health policy makers need to recognizethe potential of CBHIs and MHIs in contributingtowards the health coverage of the informalsector, and thereby may consider to provide fortheir establishment, space, and legal frameworkfor growth and efficiency gain.The Government can consider supporting themthrough subsidies following the examples ofTanzania, Rwanda and Ghana where CBHIsformed the base for the National HealthInsurance. This made National health Insuranceto expand coverage much easily as it has used thealready existing structures in CBHIs.CBHIs and MHIs therefore, may have thepotential to be complementary towards theGovernment’s aim of achieving universal coveragein Kenya.
Compilation of examples of CBHI and MHI: Kenya Page 12 Annex..DropboxGIZ-HSP VideosCBHI and MicroinsuranceCBHI Programs in Kenya-deskreview-July31,2012.xls..DropboxGIZ-HSP VideosCBHI and MicroinsuranceMHI Programs in Kenya -deskreview-July31,2012.xlsx
Compilation of examples of CBHI and MHI: Kenya Page 13 References1. Arhin DC. 1995. Rural Health Insurance: A Viable Alternative to User Fees. London School of Hygiene andTropical Medicine.2. Atim C (1999) Social movements and health insurance: a critical evaluation of voluntary, non-profit insurance schemes with case studies from Ghana and Cameroon. Social Science andMedicine 48, 881–886.3. Bennett, S., A. G. Kelley, and B. Silvers. 2004. 21 Questions on CBHF: An Overview ofCommunity-Based Health Financing. Bethesda, Md.: Abt Associates, Inc., Partnerships forHealth Reform Project.4. Carrin G, James C, Social health insurance: Key factors affecting the transition towards universalcoverage, International Social Security Review, 58(1): 45–64, 2005.5. Churchill C. (ed.) (2006). Protecting the Poor: A Microinsurance Compendium. Geneva: ILO6. Dror, D., & Jacquier, C. (1999). Micro-insurance: extending health insurance to the excluded.International Social Security Review, 52(1), 71–98.7. Eckman, Bjorn. (2004). ‘Community based health Insurance in low income countries; systematicReview of the evidence. Health Policy and Planning 19 (5). Oxford University Press.8. Gottret and Schieber (2006).’ Health Financing Revisited; A practitioners Guide’, World Bank.9. Hsiao,W. 2001.“Unmet Health Needs of Two Billion: Is Community Financing a Solution?”Health, Nutrition, and Population Discussion Paper,World Bank,Washington, D.C.10. Jakab M. and C. Krishnan (2001), Community Involvement in Health Care financing; A Surveyof the Literature on the Impacts, Strengths, and Weaknesses’, HealthNutrition and Population (HNP), Discussion Paper, Commission on Macro Economicson Health, The World Bank, Washington DC11. Jakab, M., and C. Krishnan. 2004. “Review of the Strengths and Weaknesses of CommunityFinancing.” In A. Preker and G. Carrin, eds., Health Financing for Poor People: ResourceMobilization and Risk Sharing.World Bank,Washington, D.C.12. Jutting, P. (2003). Do Community Based health Insurance Schemes improve poor people’sAccess to HealthCare? Evidence from rural Senegal. World Development Vol.32, No.2, pp.273-288.13. MOH (1999). Community Health Fund (CHF) Operations Guidelines, URT.14. MOH (1999). Community Health Fund (CHF): Design, URT.15. MOH (2010). Rwanda Community Based Health Insurance Policy. RoR16. Msuya, J. M., J. P. Jutting, et al. (2004). Impacts of Community Health Insuance Schemes onHealth Care Provision in Rural Tanzania. ZEF.17. Musango, L, J.D Butera, H. Inyarubuga, B. Dujardin (2006) “Rwandas Health System andSickness Insurance Schemes” , International Social Security Review, Vol. 59, No. 1, pp. 93-103,January 200618. Musau, S., (1999). Community-based health insurance: experience and lessons learned from EastAfrica. Technical Report No. 34. Partnerships for Health Reform Project. Bethesda, MD: AbtAssociates Inc.19. Musau S. 2004. The Community Health Fund: Assessing implementation of new managementprocedures in Hanang District, Tanzania. Technical Report No.34. Bethesda, MD: Partnershipsfor Health Reform (PHR), Abt Associates Inc.20. Preker, A. (2004). Health financing for poor people: resource mobilization and risk sharing.Washington DC: The World Bank.
Compilation of examples of CBHI and MHI: Kenya Page 14 21. Preker, et al (2002). "Effectiveness of community health financing in meeting the cost ofillness". Bulletin of the World Health Organisation (Geneva: WHO) 80 (2): 143–150.22. Republic of Kenya, 2009. Health Financing Strategy. Ministry of Medical Services, and Ministryof Public health and Sanitation.23. Republic of Kenya, 2010. Vision 2030. Ministry of Planning and National Development.24. Republic of Kenya, 2011.National Health Accounts, 2009/10. Ministry of Medical Services andMinistry of Public health & Sanitation.25. Shaw P. 2002. Tanzania’s Community Health Fund: prepayment as an alternative to user fees.Washington, DC: World Bank Institute unpublished.26. United Republic of Tanzania (URT). 2003. Assessment of Community Health Fund in Tanzania:factors affecting enrolment and coverage. Dar es Salaam: Ministry of Health.27. WHO, The world health report 2000: Health systems: improving performance, Geneva, WorldHealth Organization, 2000