Monthly Archives: June 2013

Dealing with Free Maternal Care; Financing

It has been with great joy to observe scores of pregnant women flock public hospitals for their deliveries in the wake of the government’s directive abolishing user fees for this category of patients. Indeed, this is an important move that teaches us several important lessons. Top of the list is the fact that most women would rather deliver in hospital than elsewhere. Several studies have attributed various reasons to why nearly half our women deliver outside the formal health system. This recent phenomenon at least vindicates researchers who for long have advocated against a fee for care system in the health sector. Second, it teaches us that the fees charged at our facilities are actually a barrier to access to services. Most will recall that user fees were introduced as a revenue stream that would in addition, instill a sense of ownership on the users. On those two counts, user fees have not only failed to raise any meaningful revenue for most hospitals but have in effect disenfranchised a large swathe of the populace from quality care. As noble a cause as this new directive by the government is, its success will largely be dependent on its implementation. Many commentators and observers have already noted: nothing is ever free; user fee waivers must be accompanied by an alternative revenue stream. Herein lies the opportunity to transform healthcare in Kenya or, if not well implemented, a compounding of the problems bedeviling the sector.

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To be certain, the Ministry of Health has promised to reimburse health facilities various flat rates for clients attended under this program. This means in the short term, facilities will be expected to file claims at the end of the month with the ministry for processing and reimbursement. This arrangement dives headlong into a financing pitfall that has been the bane of many a health sector; timing of fee collection. In insurance systems, most fees are prepaid; that is before they are actually needed by the insured. This is also true for social schemes in which fees (taxes) are collected well in advance of the need. User fees on the other hand are postpaid; services are delivered at the time of or soon after payment. Some systems obviously combine both pre and post pay elements to enjoy the benefits of both worlds.

Irrespective of what payment system is in play in any given health system, financing health care will always involve three critical functions; fee collection, pooling of the funds and purchasing/paying for services and supplies. The best systems are those that collect the fees ahead of the need, pool these into a large fund and plan and pay for the services and supplies before they are needed. When fees are collected ahead of services, it gives the system a window of time to plan more comprehensively for service delivery and be prepared for their clients when the time comes. Collection of fees in advance also allows for the funds to be consolidated into a large account. This has obvious economy-of-scale benefits; from reduced administrative costs to the possibility of introducing efficient information technology systems to manage the system, to bulk purchasing for services and supplies or even investment of the funds to generate more. (The Ghanaian Health Insurance Authority for instance generated 22% more funds through the investment of the levies they collected as premium in 2009.)

In our system, the ministry of health is not collecting any fees directly from anyone but taxes from the consolidated fund are used to bankroll the free maternity project. The tax collector therefore does the collection and pooling functions leaving the ministry with the purchasing end of the stick. The ministry for now has settled on a post pay system; no different from a user fee system. Hospitals therefore have to do with whatever funds and supplies they have to deliver services and only collect payment from the ministry later. This arrangement only worsens the dynamics of a user fee system; rather than wait for the patient to pay the fees soon after services were offered, hospitals will now have to wait up to 30 days. This may be untenable for facilities that do not have other revenue streams to plug the gap or in the absence of supplies of consumables by the government.

While more women coming to hospital for delivery is a desirable achievement, we must not lose sight of the fact that what really matters is a safe delivery. Mere delivery in hospital is not synonymous with a safe delivery. The picture is only complete when the hospitals have enough qualified personnel, the right tools of the right quantity and enough consumables of an acceptable quality. It is therefore in the patients’, government’s and hospitals’ best interests that a substantial amount of the projected funds for the free maternal care program be advanced to the hospitals for consumption on a reducing balance. This would give individual hospitals the time and funds to budget and procure necessary inputs in advance to ensure quality service provision. With proper record keeping and auditing, unit costs for every hospital in providing this service can be determined over time and improvements be made on efficiency.

The ray of hope is that if well piloted, this project could be a first step into providing universal health care for all Kenyans. As the American literature professor George Woodberry said in his time, ‘Defeat is not the worst of failures. Not to have tried is the true failure.’ Shall we try?

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