The lack of government-mandated price controls for out of pocket health expenditures has left a financial burden for low-income households in accessing medication, a new report indicates.
The survey titled 'Primary Healthcare Financing in East Africa', shows that Out-of-Pocket payments are the primary form of transactions in East Africa.
However, the trend poses a significant financial burden for poor families and households due to the lack of price controls on healthcare in the country.
The survey by Medic East Africa and Medlab East Africa shows that among the East African states, Uganda has the highest out of pocket health expenditure in the region at 38 per cent.
Tanzania comes second with 34 per cent followed by Kenya with 24 per cent. Rwanda has the least out-of-pocket expenditure on medication at 11.7 per cent.
The report notes that despite the high expenditures, health insurance schemes are increasingly gaining traction in countries like Rwanda helping to ease healthcare burden.
“Informal initiatives sponsored by community-based or faith-based organisations are often more popular than formal insurance programmes,” the report reads in part.
However, most schemes in the region face a shortfall in funds, limiting the translation of insurance coverage into actual benefits for the overall population.
Kenyan families are still spending billions from their pockets on health services raised through harambees, WhatsApp groups, M-Pesa, loans, the sale of land, and other assets.
This is even with the availability of medical insurance covers such as the NHIF.
The report further notes that countries like Kenya, Tanzania, and Uganda have faced challenges in implementing national health insurance schemes.
“Kenya’s effort to replace the National Health Insurance Fund with the Social Health Insurance Fund (SHIF) has faced opposition from the Kenya Medical Practitioners, Pharmacists, and Dentists Union,” reads the report in part.
It is estimated that Kenyans spend Sh150 billion in out-of-pocket expenditures on health services a year, driving nearly a million into poverty despite the State's efforts to ensure financial protection.
According to Kenya Demographic Health Survey (KDHS) 2022, the latest report that comprehensively covers Kenya's health sector, only one in four Kenyans has some form of health insurance, with the country's health insurance coverage at 20 per cent.
The government targets to hit 80 per cent of the population enrolled in health insurance coverage by 2030.
With an estimated 15.4 million members in 2023, the data showed that the NHIF had a total of 8.8 million dormant members, which further compels them to cater for medical services directly from their pockets.
This figure is expected to have shot up to date due to socioeconomic factors such as the high cost of treatment and drugs, the income, age, and education level of households which is worse experienced by those living below 1 dollar (Sh129) a day.
The report recommends that governments can reduce out-of-pocket (OOP) spending by establishing a universal pool of funds, raised through individual contributions and taxation, to address local healthcare needs.
The pool can function as a social health insurance system, protecting individuals and families from unexpected medical expenses.
“For the system to succeed, the roles of the government as the funder, the fund administrator as the purchaser, and healthcare facilities as providers must be clearly defined,” report says in part.