Coincidence is very good for healthcare business

Kenya has been grappling with a doctors strike with no end in sight.With the dawn of the NEW Year 2017 and preliminary meeting of the President with KMPDU officials I saw a glimmer of hope and a detente in the face-off. But just this morning the union official were thrown out of The Treasury building after rejecting the terms of the government offer for an end to the strike. This act was one of bravado and machinations of an arrogant elite out to skittle dialogue even when the issue at hand is just a desire by doctors to improve the health system of the country.

I still wonder why a government would want to push the public healthcare system to collapse and cause untold suffering to many of her citizens. Even before the strike, government health services were strained and the strike was welcome disruption to force better service delivery. The least costly means was to improve service delivery in government facilities and reduce the over-reliance on private facility for health service delivery.

With out of pocket expenditure on healthcare constituting at least 48% of total health expenditure am sure there surely must be a drive to increase insurance penetration rate among all Kenyans and ostensibly prevent catastrophic healthcare expenditures through the cushion of insurance. Currently the insurance penetration rate stands at a measly 2% and a further 6% under the NHIF. So there is impetus to invest in the health insurance sector to reduce out of pocket expenditure and to reduce catastrophic health expenditures but above all to make a good return on investment.

So by coincidence or design there has been an increase in private healthcare investment by international investors most notably International Finance Corporation(IFC) the investment arm of the World Bank,Abraaj group( UAE based private equity fund),Leapfrog Investments of New York and other small players most notably from India.

The IFC has acquired stakes in several private hospitals in Kenya either directly or through intermediary agents. It acquired a $4million dollar investment in AAR Healthcare,and just announced a 10% share acquisition in Britam directly.The MP Shah Hospital has also been a recipient of a Shs1 billion loan from the IFC to fund its expansion plan.

IFC are also one of the founders of Africa Health Fund established by Aureos(An Abraaj group entity) in June 2009 with the other investors being the African Development Bank and the Bill & Melinda Gates Foundation.

Abraaj group has already invested $2.5million dollars in Avenue Group,and with an estimated 100billion shillings investment fund,Abraaj has extra momentum and is in talks to buy a stake in Metropolitan Hospital .

Leapfrog investments ,a private equity firm has already made inroads in Kenya with majority acquisition of Resolution Health Insurance for Shs 1.68 billion and  paid Shs 2.2 billion for acquisition of Goodlife Pharmacy chain.

With greater investments in the healthcare chain,more control over the healthcare providers and service provisions I foresee a likely conflict of interest of an insurer requiring one to be attended to a hospital of their choice(read,their hospital) and be served at the pharmacy of their choice.All this can be dismissed as pure conjecture with no basis of evidence.But we have to understand that there has to be a separation of roles in the sector to avoid anti-trust proceedings against such investments in future.

The international charity Oxfam has been critical of the health investment by the IFC in the Health in Africa initiative and highlighted this in a report titled Investing for the few (a must read link for all). It is with this background that I ask,is there more than meets the eye in the impasse between the doctors and the government?Who would benefit most if the health system crumbles?It would be interesting to note IFCs involvement going forward in either restructuring or investment to meet the need for "universal healthcare coverage"(wink,wink) through private healthcare insurance and services and through the NHIF.

If truly it is coincidence that there is increased private healthcare involvement in Kenya when the health system is crumbling then what a convenient coincidence.In the meantime I call on all people of goodwill to rededicate to Universal Health Coverage In Africa today through strengthening of the national health systems and not through private investment in care delivery.