KENYA:State to control doctors, hospital charges in Bill

June 2021 Businessdaily; Kenya will start controlling medical bills and doctors’ fees if Parliament adopts a proposed law that aims to curb the surge in hospital expenses.

Hospital charges will be determined and capped by an 11-member council that includes the Principal Secretary for Health, the Attorney General and an official from the Council of Governors.

This will see hospital charges join fuel in the small list of essential services that are controlled by the government in the push to make basic items affordable.

The cost of medical services, especially in top private hospitals, has outpaced the national inflation in recent years, adding more pressure on families at a time they are grappling with the erosion of purchasing power.

“The Kenya Health Human Resource Advisory Council (KHHRAC) shall review policy and establish uniform norms and standards for levying of charges on the practice of conventional medicine in consultation with relevant statutory bodies and stakeholders,” says fresh amendments to the Health Act, which are before Parliament.

Some health providers have attributed the steep rise in medical inflation to a similar rise in the cost of medicine, doctors’ fees and medical equipment that is passed on to end-users to keep afloat in business.

The steep rise in the cost of medical services is also piling pressure on insurance premiums with demands that consumers pay more to access services.

A section of insurers, however, accused medical practitioners of driving up medical inflation through many charges for services that patients do not need.

Some doctors take patients through procedures such as various lab tests for which they charge the insurers exorbitantly, raising the overall cost of medicare.

Besides the possibility of locking out low-income earners from accessing quality medical care, the increase in medical charges is expected to take a huge chunk of expenditure from the upper and middle-class families, eroding their purchasing power on discretionary expenses.

Private hospitals are opposing the bid to have the government control hospital charges, arguing it risks lowering the quality of medical care.

“If they (KHHRAC) is able to regulate the prices, are they going to control the prices at which hospitals buy medicine from the manufacturers and other items?” asked Dr Abdi Mohamed, the chairman of Kenya Association of Private Hospitals (KAPH).

Due to low insurance penetration, a quarter of Kenyans’ healthcare bills are paid out of pocket, according to the World Bank.

This leaves many families vulnerable and reliant on debt and donations from friends and families or disposal of assets such as livestock.

Protect tenants

The push to tame hospital bills comes as the State tabled a Bill in Parliament to control commercial and residential rents in the quest to protect tenants from sharp building lease costs.

The government-backed Landlord and Tenant Bill of 2021 demands that rent increase should not exceed the annual average inflation rate for the preceding year.

This, for example, means rent increase this year would be capped at 5.2 percent—the average 2020 inflation—if the Bill became law.

Kenya has preferred to let market forces control the cost of basic commodities despite the presence of a law that provides for capping of prices.

In 2011, Kenya signed into law a Bill that allowed the return to price controls of essential commodities, after the practice was abandoned in the 1990s in favour of economic liberalisation.

The law allows the Treasury Cabinet Secretary to declare certain goods essential commodities and determine their maximum prices through an order in the Kenya Gazette.

This order has only been issued once in 2017 when the State capped the price of two-kilo packet of maize flour at Sh90 after the cost of the commodity more than doubled to breach Sh150.

In November 2019, Kenya removed a cap on commercial lending rates imposed in 2016, which had been blamed for curbing private sector lending growth.

But Kenya has been setting price caps on fuel monthly since 2010.

To ease the medical bills burden, the State is seeking to change the law to allow the National Hospital Insurance Fund (NHIF) to offer medical cover for all.

Under the scheme, every adult Kenyan will soon make an annual compulsory Sh6,000 contribution to the NHIF if Parliament adopts the State-backed changes.

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