Affordable+Quality Healthcare In Kenya And Africa

Affordable Quality Healthcare In Kenya And Africa

Insurance is not a product or item that will be found on your day to day shopping list; this is purely because of its benefits structure and pricing. For one to benefit from their car insurance policy, there must be an accidental event. Same to a health insurance policyholder who’s seeing a doctor or visiting a service provider. Who in their right mind will wish to find themselves in such eventualities?

For these and many other reasons, a bigger population will only buy mandatory insurance. As industry stakeholders, we are called to look for ways and modalities to avail products that are appealing and affordable to the consumer. This will change the notion that one has to buy insurance because they’ll use it within the policy period.

A number of countries around the world have embraced capitation models in promoting universal health and this has shown impressive sustainability scores. Capitation has helped to limit excessive costs and the performance of unnecessary services at provider level. Capitation encourages preventative care; the provider is rewarded for providing preventive health care services. This incentivizes the doctor or provider to help avoid expensive medical services. 

The biggest benefit to capitation contracts is that they provide fixed payments to providers, dissuading the incentive to order more procedures than necessary hence providing greater provider accountability. Capitation also eases claims management hitches since provider is already guided on spending and billing.

Micro insurance services target principally but not necessarily low-income earners, who are excluded from mainstream commercial and social insurance schemes, due to affordability barriers. Generally, micro insurers provide a limited set of benefits to members at low premiums, making them affordable to low-income households.

Micro-insurance can also include main-stream services by pooling more policy holders together for efficient and profitable management of the risk. This can be achieved by creating self-funded schemes, micro-underwriter focused and capitation models.

Purchasing involves determining what to buy (benefit package), for whom (target beneficiaries), from whom (healthcare providers) and for what price. Purchasing can be passive or active also known as strategic purchasing. Strategic purchasing, therefore, involves performing the purchasing activities in a way that continuously seeks to promote quality, efficiency, equity and responsiveness of the health system. Strategic purchasing is critical for the attainment of Universal Health Care, and is arguably even more important for micro insurance, which targets low and middle-income earners, who often have higher need for health services.

With the micro health insurance approach, we can provide health insurance services to these households in exchange for premiums charged on the basis of the risk involved. Micro health insurance can improve access to health services, offer financial risk protection through reduction in out-of-pocket expenditures. It has been shown that micro health insurances and micro insurance firms in general, tend to have small risk pools and face difficulties in generating sufficient resources which can impact their ability to act as strategic purchasers. More specific evidence on purchasing arrangements suggests that micro health insurance face challenges in designing benefit packages that remain affordable while offering sufficient coverage, obtaining health service providers who offer quality and efficiency, and managing claims in an administratively efficient way.

Strategic purchasing can ensure that financial resources are used in a way that optimally enhances the attainment of health system goals. A number of low- and middle-income countries, including Kenya, have experimented with micro health insurance (MHIs) as a means to purchase health services for the informal sector. This is the way to go if we are to increase insurance penetration in Africa.

Micro-health insurance schemes can be categorized in several models:

  1. Partner-agent; In this model, an insurance firm contracts another entity to sell it products.
  2. Provider-driven; this model is led by a health service provider who takes on an insurance function.
  3. Mutual model (community-based); is owned and run by scheme members through participatory mechanisms.
  4. Direct agent model; In this model, an insurance firm controls the entire chain and sells its product directly to consumers.
  5. Self-funded schemes put together by employers or employee unions.

MiCover, UniPlus and UniMax by Imana in partnership with Healthier Kenya Limited, Medicross Limited and Medical Administrators Kenya Limited are provider-driven micro health insurance schemes targeting both individuals and corporate organizations. Anyone between ages 18 and 80 is eligible to join the scheme. These covers offer very generous benefits;

  1. Outpatient Ksh.75,000 – Ksh.150,000
  2. Maternity Ksh.100,000 – Ksh.100,000
  3. Optical Ksh.10,000 – Ksh.30,000
  4. Dental Ksh.10,000 – Ksh.30,000
  5. Covid-19 Ksh.100,000 – Ksh.250,000
  6. Evacuation – Ksh.200,000
  7. Last expense – Ksh.100,000
  8. Group life cover – Ksh.250,000
  9. Premiums ranging from Ksh.24,000 to Ksh.95,000

With MiCover, UniPlus and UniMax health plans, one can access over 600 hospitals spread across the republic of Kenya. Members are enrolled through mobile USSD upon completion of annual premium.

Both client value and a business case are needed for microinsurance to be sustainable. In an ideal world, the two ultimately reinforce one another. MiCover has come out to address this balance.

Increasing the level of coverage may not always be the best way to improve value, especially in a market such as microinsurance in Kenya, where insurers struggle with high claims ratios. Other product features, such as simplicity and ease of use, are also critical determinants of the value clients receive.

Raymond Momanyi is the CEO Imana Insurance Agency Kenya Ltd

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