Shock for hospitals as NHIF cuts costs by more than half

Tuesday September 20 2016


By Syriacus Buguzi @buguzi

Dar es Salaam. The National Health Insurance Fund (NHIF) has drastically reduced its hospital billing rate, cutting the cost of some medical services by over 60 per cent.

Hospitals which were caught unawares have reacted with disbelief, fearing the move could cripple service delivery, especially in private hospitals, and affect investment in quality health care.

NHIF has issued indicative charges for medical services in health facilities across the country—a move that will see some private hospitals forced to lower their cost of treatment in line with the decision, The Citizen can report.

The new development is part of the government’s plan to achieve universal health coverage (UHC), but owners of private hospitals have protested, citing high costs which will arise in running their facilities.

Private health facilities operators insist that the prices are unrealistic and were imposed on them but the government argues that the new prices would reduce financial hardships on ordinary citizens.

The CEO of the Association of Private Health Facilities of Tanzania (APHFTA), Dr Samuel Ogillo, said the government did not consult them before introducing the lower prices to avoid a needless dispute.

“When the new price list was introduced, we were really shocked. There were no prior discussion with the stakeholders regarding how the NHIF arrived at the lower prices,” Dr Ogillo told The Citizen.

Efforts to get comment from NHIF were futile by the time of going to the press, but Health minister Ummy Mwalimu told The Citizen that a number of meetings have been held and were still on-going between the government, the NHIF top management and private health facilities as part of efforts to resolve the matter.

“We (the government) have agreed with private health facility owners that the new prices be implemented for one year and we will be ready to meet and review,’’ the minister said in an interview.

“The decision to rationalise the prices has taken into consideration the levels of care and the inputs used and it’s in line with the vision of universal health coverage,’’ she added. The minister said health insurance coverage was very low in the country at 27 per cent, with NHIF accounting for 7.2 per cent. The rest is taken up by the Community Health Fund.

The Citizen has learnt that some of the private health facilities were still in dilemma over whether to implement the government’s directive or not. But some hospitals have heeded the new directive and did not want to comment when confirming their stance.

Dissatisfied institutions have expressed concerns that the new price adjustments, in which the cost of vital surgical services and consultation fees has been slashed down, will make private hospitals “too expensive to run.”

A surgical procedure that would, for instance, normally cost a total of Sh600,000 or more at a private hospital in Dar es Salaam, will now cost as low as Sh150,000, according to the new NHIF price schedule. The new directive is supposed to have been implemented by the July 1.

Coming along with the changes is the fact that NHIF will no longer pay for patients’ follow-ups with the doctors anymore.

This means that if a patient goes to the hospital with a problem and a doctor recommends that the patient return to the facility for follow-up, NHIF will not cover for the second visit.

Yet, it will also cost Sh15,000 for a patient with an NHIF card to consult a specialist and Sh7,000 to see a general practitioner, as opposed to the previous cost where the former would cost up to Sh30,000 and the latter Sh10, 000.

One hospital (name withheld) has appealed to the government, through APHTA, in an effort to try and push for the increase of the prices.

In a report sent to APHTA and seen by The Citizen, the owner said, “This is a shocking price list (for us) to be able to run and manage a private health facility which 70 per cent of its clients are covered by NHIF.”

“It’s like telling us that we are not going to survive in the next one year. How can we run theatres with those prices?” queried the owner of a private hospital in the report.

Dr Ogillo told The Citizen that although the decision by NHIF aimed at making medical services affordable to many, but, he noted, private health facilities will be losers to this end, warning that this may compromise the quality of the services they offer to patients.

“Private health facilities have to pay VAT, purchase medical supplies, pay rent, salaries and so on. Subjecting them to the same prices as the public facilities will compromise quality,’’ said Dr Ogillo in an interview with The Citizen.

“I think there should be a re-adjustment of the prices for higher level private hospitals. At least increase to a certain level because the owners will undergo a crisis as they try to adjust.”

However, Health minister Ummy Mwalimu maintains that the new prices are more realistic than the ones used previously.

“The methodology used for setting previous prices was not professional,” she said.

Ms Mwalimu warned against any attempt to increase prices.

“I know some of the private facilities will lobby so that the prices increase, but such an action could jeopardise the NHIF scheme and the public at large,’’ she said.

“We are trying to balance the equation, being fair to both—the service providers and the members of the public.

“Throughout the world, there are tensions between providers of services are health insurance schemes.” “It’s natural, where sellers want more money and higher profits and buyers want lower prices,’’ she adds.