Insurer decries Kenyan healthcare costs

January 28, 2010

, NAIROBI, Kenya, Jan 28 – The High cost of healthcare has left most Kenyans with no access to proper medical facilities, a leading insurer said on Thursday.

Resolution Health East Africa Chief Executive Peter Nduati said on Thursday that the current market is controlled by eight major hospitals that consistently drive up healthcare pricing.

Mr Nduati said the cost of business in Kenya remains generally high as underlying inflation drives operation costs up.  This has in turn led to major private hospitals hiking theirl fees.

“It is a sort of a cartel where if one hospital raises its fees all the rest will follow and this is locking out more and more people from accessing hospital services,” Mr Nduati said.

He believes having well equipped hospitals spread across the country will stop people from going to major towns in search of healthcare, which has been a major contributor of high costs.

“The only way the costs are coming down is the improvement of the public infrastructure where you can go to a local government hospital where the service is good and the costs are lower,” he said.

The ripple effect of having the right number of hospitals and personnel to operate them is the reduction in premiums paid for health insurance ensuring more Kenyans can access health care.

“When we encourage our customers to go to cheaper hospitals they tell us we are trying to cut costs. Yes we are trying to cut cots so that next year you don’t have to pay more in terms of premium.”

The Ministry of Medical Services is set to introduce the Social Health Insurance Scheme Bill this year. It is believed it could have a significant impact compelling players in the private sector to bring down health insurance making it affordable to most Kenyans.

Only 15 percent of Kenyans have some sort of medical cover with the National Health Insurance Fund (NHIF) accounting for about nine per cent while private insurers take up about two per cent while corporate covers cater for by the balance.

Mr Nduati spoke as he released the company’s performance figures to brokers and stakeholders.

Net income in 2009 was up 28 percent at Sh610 million up from Sh475 million in 2008 while revenue grew by 27 percent to Sh997 million, just shy of the Sh1 billion target set out by the company.

“As a business we have been growing steadily despite the challenges we face. We are now focusing more on diversification of our portfolio, embracing technology and upping our regional expansion plans,” he said.

Resolution Health East Africa is set to open a new branch in Nakuru and venture into the Ugandan market soon.

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