Can we do something about healthcare costs?

Recently I wrote in our blog about healthcare costs. You can click here to get the full article. The Question I ask is if there is a way the government can be lobbied to think again about the delivery and focus of healthcare.

For a long time the focus has been and still is HIV/AIDs, Malaria & TB. There has been an increase in interest with Non Communicable diseases like Hypertension, Diabetes and now Cancer. The interest in surgical disease and particular trauma doesn’t seem to be a priority for now.

If it was then they would realize that surgical disease & trauma overtook HIV/AIDs ,Malaria & TB as a cause of death and illness worldwide in 2010. There are so many people who die from lack of access to timely surgery because of cost of surgery and where to go to get help. To be fair to them, if we didn’t have NHIF then the story would be even worse because people will not be able to afford treatment.

The stories that we read in the daily nation about NHIF possible collapse because of a cash crisis don’t inspire hope. It means that for the majority who NHIF can’t help them or are cash because for some reason they can’t get cover, they would not be in a position to pay for health care. The NHIF has been having reduced payouts to hospitals because they are cost cutting. This comes at a time when the Kenyan economy has not been good. The taxes have increased the costs of the surgical implants needed and therefore NHIF reduced payout may not help hospitals in the near future. Many hospitals may have to choose to tell the patients to pay cash for cases where NHIF gives a low pre-authorization that can’t meet their costs.

To give our some background, in 2013 , surgical implants were subjected to VAT. That means that the prices of goods rose by 16% which is then passed on to the consumer. If I’m a big corporate, its not an issue because I will charge the customer because I had to pay VAT when I purchased the implant. There is a mechanism for me to claim it. But if I’m the common man, there is no way I can claim it. I will have to bear with the increase in costs. At that time in 2013, the cost of milk went up and there was a huge public outcry. The government then stepped in by Zero-rating Milk.

In 2018 when the fuel VAT at 16 % kicked in , there was a nationwide outcry, even the Members of Parliament felt the increase in cost. The government eventually reduced the VAT to 8% for fuel. The increase in costs hurts the economy by making us less competitive and the cost of goods also goes up.

If Fuel and Milk can get some reprieve for VAT, why not healthcare. The items in VAT schedule that enjoy this Zero rating are medicines and Injections but not surgical implants. They zero-rated items that were to help the majority of patients like vaccines but neglected to realize that the times have changed. That the items they are charging Vat on are needed by the ones who are likely to need them most - you are more likely to die or get injured by a road accident/ cancer than by TB or HIV for example.

This then means that if the implant cost Ksh 100 000, when I add 16 % Vat the costs goes to Ksh 116 000. Someone has to dig deeper into their pocket- and its not the seller but the patient in this case. Now when NHIF can’t cover this surgery for example for a Knee or Hip replacement where only certain hospitals can claim, it means that the cost of surgery - the implant will be higher by 16%.

Most of the patients who have to pay cash because of exhausted insurance , or the surgery isn’t covered or don’t have Insurance in the first place will be strained.. They may have a fund raiser but soon even that will not help.

The only way for surgery to be more accessible to cash patients is by reduction of costs by reducing the cost of the materials.

Of late we see so many road accidents and the headlines will talk about how many people died and how many were injured. We rarely get to know how the survivors are doing and if they got back to their activities of daily living. Maybe the reason why they are not back to work or seeing them is because they are at home or in hospital not able to afford care. It could be you. I think sometimes that an accident can actually drive you into poverty just like 1.5 million Kenyas are every year because of healthcare costs.

What can we do differently?