For the year 2025 I urge healthcare providers to refuse to be underwriters of government in healthcare provision. Government should fulfil its healthcare obligations but not make healthcare providers both fund beyond normal taxes, and do, what government should be doing.
2025 demands by healthcare providers are as follows:
1. Capping of Social Health Insurance Fund (SHIF) tax to KES 5,000.
2. Immediate payment of all old NHIF debts, with interest.
3. Cessation by government of claiming corruption in NHIF without proof and without paying their dues.
4. Return of primary healthcare obstetrics and gynaecology services, antenatal and postnatal care to level 4, 5 and 6 until the lower levels health facilities are adequately equiped to handle these.
5. Reduction of exclusions of services paid for by Social Health Authority.
6. Prompt and complete payment of Social Health Authority debts
7. Prompt Payments of medical debts to heathcare providers owed by Teachers and Police Schemes.
8. Prompt payment to healthcare providers of debts by insurance companies and healthcare facilities.
9. Removal of the requirement of an ETIMS Receipt for unpaid healthcare services
10. Reduction of cost of credit by government by capping CBR Interst rates to single digits and ensuring commercial banks do not overcharge clients who had existing credit facilities.
11. Exemption from Housing Levy of those with existing mortgage facilities
12. County Governments desist from harassing healthcare providers who are duly licenced by the Kenya Medical Practioners and Dentists Council (KMPDC) and providing much needed UHC to their populace.
UHC
The government, if well organized, with minimal corruption, would serve to do what governments are elected to do for healthcare – ensure efficient reasonable tax collection and proper utilization to provide Universal Health Coverage (UHC). Universal health coverage (UHC) means that all people have access to the full range of quality health services they need, when and where they need them, without financial hardship. It covers the full continuum of essential health services, from health promotion to prevention, treatment, rehabilitation, and palliative care across the life course. I dare say that the only way to do that is to have a public-lead tax-funded UHC approach.
EMPLOYEES ARE UNDERWRITING GOVERNMENT EXPENDITURE
With their government policies the Kenya Kwanza (KK) Government has significantly reduced the purchasing power of Kenyans. In addition these policies have forced normal hard-working taxpayers to pay for what government should be paying for. Employed and salaried persons have born the brunt of these extractive policies and they have effectively been made underwriters for government for healthcare and other social services.
What have we seen over the last two years?
We have seen government abdicating its role of allocating 15% of the budget to healthcare from its normal taxes. Despite the sources of income for government being many, the government opted to add a tax on its population under the guise of ‘social health insurance’ in order to raise funds for healthcare. If you pay an additional 2.75% of your earnings to government, there is nothing ‘social’ about the insurance, considering that you already paid 30 – 35% as PAYE as an employee. The term ‘social’ is a populist way of introducing a tax to reachable employed persons. Moreover we had seen government making healthcare providers underwriters of the healthcare that government should be paying for, by not paying them their dues for services provided for NHIF i.e. old NHIF debts. Worse still the government is trying to justify non-payment to health facilities by running a corruption narrative within NHIF that has now grown stale.
Primary Healthcare and Emergency and Critical Fund.
These two funds introduced by Social Health Insurance Act are not funded. Moreover the facilities that are supposed to be providing these two services currently do not have the capacity to do so. This has become evident in the KOGS Central Branch area where antenatal attendance at level 4 and 5 facilities has dropped significantly because primary healthcare fund does not cater for so called ‘referal facilities’. Gynaecologists and Paediatricians are now reporting a worrying trend of increased home deliveries, increased neonatal asphyxias and an increase in sick children being brought to referal hospitals late because they could not access referal facilities earlier because a law has been passed that you must start healthcare from the bottom up. Healthcare in Kenya does not necessarily work like that. A meeting with the Social Health Authority team did not yield much.
CAP SHIF TAX
An additional 2.75% gross income tax was imposed on Kenyans as the Social Health Insurance Fund. Kenya Medical Association (KMA) suggested that this tax be capped at KES 5,000. A lot of theory was bandied around about how this tax will increase the tax-base net by capturing more unsalaried persons. But this is proving not to be true. Salaried Kenyans have thus taken the hit and are carrying the burden of the social health insurance. The means test introduced to purportedly net in more people has not worked. The county and national governments will still end up paying for those adjudged to be indigens from the same taxes that the salaried people have paid as Pay As You Earn (PAYE) and other levies. That is to say salaried people are the financing the government.
CBK Rates, Housing Levy, Credit rates
The KK government went further to increase the cost of living by doubling the VAT rate on fuel, and deregulation of Central Bank of Kenya (CBK) interest rates, thus allowing commercial banks to run riot on existing credit & mortgage facilities. This has dramatically reduced purchasing power. Yet it has imposed a Housing Levy Tax of 1.5% of gross earnings even on those already paying mortgages at exorbitant interest rates charged by commercial banks and allowed by government to do so, and who will definitely not benefit from this housing tax.
OLD NHIF DEBTS
The government has failed to completely pay the old NHIF owed to Health Providers. It is interesting to hear them keep claiming the way there was corruption in NHIF and yet they do not pay genuine debts. By the government not paying genuine old NHIF debts is corruption in itself. It fuels corruption by making health facilities so desperate and unable to sustain the running of their health facilities that they may be forced to pursue corruption channels in order to get paid. By not paying their dues government via NHIF unpaid debts is a facilitator of corruption. The work of government is not to rumor-monger. It is to ensure that they identify corrupt claims and separate them from non-corrupt claims. They should then take action on corrupt claims though with proof, BUT ensure they pay verified claims. Lumping good and bad claims is a way of government escaping paying old NHIF claims. Unfortunately failure by government to pay genuine claims has led to closure of genuine businesses, decrease in health workforce savings and exit from health service delivery by many and loss of confidence in NHIF/SHA.
Whereas the government is supposed to ensure UHC it is the one killing UHC by not paying old NHIF debts. Gone are the days when government failed to pay but forced the healthcare facilities to underwrite their responsibilities for fear of losing out on ‘perceived patients’. Health providers have realized that it is better not to see patients with a promise of payment that will never come, but instead charge patients cash whenever government fails to pay. When the government made ridiculous proposals of how much to pay for medical services as SHIF, and also came up with a list of services that the Social Health Authority would pay for, it became obvious that Kenyans would have to co-pay for their healthcare because SHIF would not cover the whole cost of care and would also not cover all medical conditions that need care. Previously the health facilities were forced to absorb the additional costs of care because government forced health facilities contracted by NHIF to cap of fees and excluded health facilities that declined to take up so called NHIF packages where one could not charge patients for costs not covered. From the recent furore of Kenyans doing fundraisers despite having registered with SHA it is obvious the underwriter, the health workers and health facilities, has withdrawn and government is exposed.
MULTIPLE LICENCES AND SINGLE BUSINESS PERMIT
The issue of multiple licences by government is a big challenge that healthcare providers must take on in 2025. It is interesting that when government wants to oppress health workforce the take an all-government approach and say that the government is one. But when they want to extract legal and illegal taxes from the healthcare providers they suddenly become national government and county government. The best illustration was a recent dangerous attempt by the Inter Governmental Technical Relations Council (IGTRC) to try to separate regulation of professionals from the business of professionals in order to justify double and triple taxation on the single business permit for the practice of medicine. Doctors pay for their individual licences to enable them practice medicine and of course to be able to earn to the Kenya Medical Practitioners and Dentists Counci (KMPDC), a government regulatory body that ensures that the practice of medicine is safe,. This practice liceence is a form of tax. Over and above that the health facilities that health professionals practice in mandatorily require paid licencing by KMPDC, a second tax. Over the last quarter of a decade, following a court case by Kenya Medical Association against the municipal council of Thika, professionals are exempt from paying another licence to practice to a municipality, city council or currently a county government. The County Government is suppose to sort its share from KMPDC. We have had numerous assaults of healthcare providers on this issue, numerous court cases on this and the harassment has to stop.
Health facilities also have to pay too many other multiple other licences just to start running. A few examples are Laboratory tax to Kenya Medical Laboratories Technicians Board (KMLTB) whose board has lost it and have attempted to introduce VAT on licencing fees – who does that? For radiology a tax Radiation Regulatory Authority is paid for a licence. For a pharmacy a tax to Pharmacy and Poisons Board (PPB) is paid. Other bodies including Kenya Professional Oversight Authority (KHPOA) are claiming a tax or two. And the environmental government boady NEMA also gets to tax the healthcare provider. These are just a few of the taxes healthcare providers pay.
ETIMS FOR MEDICAL CLAIMS
ETIMS invoices for medical claims that the Kenya Revenue Authority (KRA) had demanded for in the Finance Bill of 2023 was a big problem for medical personnel and facilities. Despite there being a withholding tax certificate to provide visibility of payment of medical claims for KRA, they insisted on ETIMS receipts for unpaid claims. Unfortunately KRA did not listed to the cries of the health professionals and Kenya Medical Association (KMA) filed a case against the mandatory need for an ETIMS receipt for monies not received. Historically we know that 30% to 40% of medical invoices go unpaid or have extremely long delay before they are paid. One does not need to look far but just the old debts of NHIF which remain unpaid to date. If these debts had been issued with ETIMS receipts then KRA would have demanded for tax for monies that the health workers would never receive. Again healthcare workers would become the underwriters for government of not only providing healthcare service which the government will claim as healthcare given to mwananchi, but they will have paid for it and will be benevolent enough to pay KRA tax for unpaid claims that they have issued ETIMS receipts for. Despite the courth knowing that KMA was spot on, no judgement on ETIMS has been arrived at at the turn of the year. However KRA have made an attempt at rectifying the situation albeit not completely so by declaring in their tax amendment laws that ETIMS would not be required for those whose turnover is less than 5 million, which is where majority of the doctors running small kiosks fall.
PAY THE MEDICAL INTERNS
Finally to ensure that the practice of medicine is protected I extend a thank you message to the Kenya Medical Practioners and Dentists Union (KMPDU) and the Ministry of Health for their sustained quest to ensure that medical interns are treated with dignity, remunerated appropriately and that all monies owed to its members is paid as it should. I pray that the spirit of collective bargaining will prevail as that is the only way to uphold workers rights. The correct remuneration of medical interns is my highlight of 2024. We as a medical profession vow to protect our weakest link to maintain high quality medical care.
Dr Kigondu Simon is an obstetrician gynaecologist and President of Kenya Medical Association