The Decline of Kenyan Trade Unions and the Current Doctors’ Strike
Mr. Okoth Osewe’s recent article (KSB December 9, 2011) was spot on in depicting the plight of helpless Kenyan workers in the hands of trade unions that don’t represent them according to the country’s Labor Laws. It is true that Francis Atwoli, Secretary General of the Central Organization of Trade Unions (COTU) cannot speak for workers because he is in the category of wealthy Kenyans.
Billy Muiruri wrote the following about Atwoli in an article published on May 6, 2011 in the Saturday Nation newspaper: “Atwoli’s lifestyle is one of the most privileged in the country. One of his Mercedes Benz cars has a 5000cc engine and is said to be the only one of its kind on Kenyan roads. It was delivered to him last year at a cost of a cool Sh30 million. Only months earlier, another was imported from Germany.
He is a man in love with the Mercedes Benz brand. One of the most remarkable features of his latest car is that it changes colour with the weather. His personal assistant, Adam Barasa, recounts his experience with the car on a typical journey to Nakuru. “When you are in Limuru, it is metallic blue; it changes to black when you approach Naivasha, while it becomes reddish by the time you are within Nakuru town. It marvels us,” he told Saturday Nation.
“Kila kitu yangu ni mzuri. Huwezi kwenda kwa matajiri na koti imeraruka na unaenda kuulizia watu mshahara? (Everything I own is good. You cannot face employers with tattered clothes and yet you are bargaining for higher salaries).
He is not just in love with the Mercedes. He has worn gold ornaments for over three decades and, as he says, “gold is a great material.” His watch, bracelets and a chain are just some of the conspicuous ornaments he dons.”
Decline of trade unions
Global trends indicate that the decline of trade unions is partly a reflection of how multinationals and financial institutions like the World Bank and the International Monetary Fund (IMF) impose conditions that render them useless. For instance, since the 1980s when structural adjustment programs (SAPs) were recommended for most developing countries, part of the conditionality has included contractual placements in their labor markets which offer no chances for workers to become unionized. Therefore, many still suffer under the framework of Export Processing Zones (EPZs), which are controlled by multinationals that offer unfavorable contracts shutting out labor unions. Such corporations are exempted from local employer legislation. Unfortunately, these governments readily turn a blind eye to the horrible conditions in sweat shops created for mass production, in the name of inviting foreign investors to create employment.
According to a 2004 report by the International Confederation of Free Trade Unions (ICFTU): “Until 2003, workers in Kenya’s EPZs were banned from joining trade unions. Attempts by unions to organize workers were severely repressed. After a series of bitter strikes in the zones in 2003, the government agreed to allow zone workers the right to join unions. At least 15,000 workers in Kenya’s textile sector, most of whom were women, had gone on strike with a long list of grievances, including pay below the minimum wage, no medical schemes, no right to sick leave, trade union repression, excessive working hours, sexual harassment, and unpaid overtime. One person was killed and many injured after anti-riot police attacked strikers with clubs and tear gas. Following the government’s U-turn, the Tailors and Textile Workers’ Union (TTWU) began organizing workers and negotiated a collective bargaining agreement for more than 10,000 employees in nine factories in the Athi River EPZ, near Nairobi.”
The well-established capitalist system in many countries is also a contributor to the decline of labor unions since it is concerned with exploiting workers and amassing wealth without care. In almost all sectors (public and private), Kenyan workers still remain voiceless with shocking slave wages inherited from the exploitative colonial labor system. Corporate executives and policy makers are not doing much either to close the ever-growing labor market inequalities that range from gender disparities, to wages that are not commensurate with the costly living standards.
Although minimum wages have increased since 2003 when President Kibaki took over, consumers cannot meet the ever-rising prices of various goods. In addition, very little has improved within the unionized workforce. It is important to note that a large portion of government’s expenditure is incurred within the Executive and Legislative arms. They form the rich class which takes home high salaries in a country that belongs to the Less Developed category. A Kenyan Member of Parliament earns a monthly salary and allowances of around Kenya Shilling 851,000 per month ($9,300), while the average income for other Kenyans is about $730 per year. The majority still earn less that $1 a day. The wage inequality in Kenya’s labor market is one of the highest in the world.
Meeting Vision 2030 will remain an illusion for the Kenyan government unless radical reforms are pushed to curb widespread corruption, disproportionate allocation of public resources, unequal infrastructural development and most recently, revelations of illicit capital flight reminiscent of former Dictator Moi’s era, and so forth. John Kiarie wrote in The Standard newspaper on December 9, 2011 that a report titled: Bringing the Billions Back, “shows the accumulated illicit capital flight from Kenya hidden in over 40 tax havens amounted to a staggering Sh566 billion (US$6.369) billion as of last year. Ironically, this is almost the same amount required to clear Kenya’s total external debt stock, which, according to the World Bank amounted to Sh662 billion (US$7.44 billion) in 2008.”
Poor health care system and doctors’ strike
It is shocking to note the low salaries paid to Kenyan public medical doctors. In addition, the health care system is so bad that most top government officers don’t seek treatment in public hospitals. Instead, they do so in expensive private ones, or travel abroad preferably to Western Europe. Kenyan public health doctors are currently on strike demanding better remuneration and more hospital equipment, among other things.
Hats off to the brave and eloquent young Dr. Victor Ng’ani, spokesperson and Chairman of the Kenya Medical practitioners, Pharmacists and Dentists Trade Union (KMPDU). He is a true patriot and a champion of human rights. His interview clips at the Power Breakfast show on Citizen TV posted on KSB under comments 3-5, revealed a lot of rot in the health care sector. He presented his colleagues’ grievances very well and endured Mutegi, the bully male interviewer, who was too patronizing with silly questions. Dr. Wambui Waithaka (KMPDU’s National Treasurer) also gets accolades for keeping us informed on how they use the social media to reach colleagues in remote areas of Kenya, to update them about the strike. Generally, there is hope that KMPDU will revive the lost glory of trade unions in the country.
Kenya’s current generation of young doctors seem emboldened by the New Constitution and talk openly about Impunity as a great factor behind the horrible state of health care system. This is a strategy that should be emulated by other employees to bring tangible reforms within the public sector. It is quite annoying that doctors are being intimidated by the powers that be, to accept useless terms of remuneration. On the down side, they are criticized for participating in private practice with the same public hospital equipment they complain are obsolete. But almost all Kenyan public workers moonlight to supplement their poor salaries. Hopefully, and with an improved pay package, doctors will concentrate more on their public jobs.
It is impressive that KMPDU members keep abreast of basic health requirements prescribed by the World Health Organization (WHO). For instance, Dr. Ng’ani mentioned that our system lags far behind that of a small country like Rwanda, which has made major strides in improving her citizens’ quality of life. Kenya’s new breed of doctors is up-to-date with global health care data and information required to serve Kenyans perfectly, but gets no support from our thieving politicians who prioritize corruption for personal enrichment. There is hope that the strike (which is the only way), will change the government’s attitude. Some of the working tools demanded by these doctors are basic in their profession, yet the government cannot adequately supply them.
It is absurd that after 48 years of Independence, our country still has around 5000 doctors only for both public and private practice, serving a population of around 40 million. Around 2,300 serve in public health facilities. Their poor terms of employment encourage mass migration to better paying countries, thus reducing the patient-doctor ratio. But the worst is Kenya’s internal brain drain among trained nurses that cannot be employed. The following was published by the International Centre for Human Resources in Nursing (ICHRN) in 2010, about the nursing workforce:
“Kenya’s case is unique. Over the past decade, it has been reported that there are over 7,000 unemployed nurses. Over 1,300 new nurses graduate annually from local colleges. At the same time, almost every functional health facility is understaffed with over 500 of Kenya’s 2,122 (2007) dispensaries throughout the country did not have a single nurse. In addition, an average of 500 nurses have been retiring annually at age 55 and between 300-400 nurses migrate abroad annually. Key factors responsible for shortage of nurses at service delivery points include fast-expanding health care delivery network that also experiences inadequate recruitment and maldistribution of staff. Contributing to the shortage are an aging nursing workforce, lack of proper workforce planning that includes skills analysis and distribution, and lack of up-to-date, accurate and comprehensive data sets to assist in remedying the workforce planning situation.”
The information above is grim to say the least, yet we lack medical personnel to meet the required ratio per patient. Touch Africa International has posted the following data on its Website:
Statistics reveal that:
– Population 17.3 Million female; 16.3 Million male; total 33.6 Million
– No of doctors; 5,443 (6,062 persons per doctor)
– No of dentist 841 (39,992 persons per dentist)
– No of pharmacists 2,570
– Infant mortality rate; (per 1000) 77 for children under the age of 5. 115 for all children in general.
Rising child mortality
A KTN reportage in November 2011 revealed that pregnant women could not be attended to at Lamu District Hospital because there were no delivery kits, and in case of emergency, most women could not afford to pay KES 6000 for a boat trip to Malindi for better care. The end result was they resorted to traditional midwives and chanced surviving with their new-born babies.
Kenya’s infant and maternal mortality rates are still high in rural areas and in poor urban communities, yet the Government keeps boasting about 5 per cent economic growth. How can it be proud of figures that don’t trickle down to its citizenry? Tell our Members of Parliament and Ministers about salary hikes and opulence, then you will be listened to. The current gang of MPs is nothing but a blend of hyenas that will possibly “extract” money from free-flowing air to line their pockets.
In Mozambique, maternal and child mortality rates have been reduced drastically because of an unconventional model used to train midwives in surgical skills applied during emergency situations. As noted on pbs.org under the title Birth of a Surgeon: “After the country declared its independence from 400 years of Portuguese rule in 1975, a civil war raged for 16 years, killing a million people and wrecking the country’s infrastructure. By the time the war ended in 1992, the health care system was devastated and one in ten women died in childbirth. There were only 18 obstetricians for a population of 19 million. Since then, Mozambique has cut the maternal death rate in half.
As the figures now stand, the country is one of the few countries on track to achieve the fifth United Nations Millennium Development Goal to reduce maternal death rate by 75 percent by 2015. In 2004, Mozambique introduced a new health care initiative to train midwives in emergency obstetric care in an attempt to guarantee access to quality medical care during pregnancy and childbirth.”
Kenya, like many other African countries, suffers from an acute shortage of specialists in women’s reproductive health. In an article penned by Susan Anyangu-Amu on August 13, 2010 at ips.org, it was reported that: “Kenya has only 340 registered gynecologists serving a population of 38 million. The shortage of these highly qualified personnel is exacerbated by the uneven distribution of the few who are available.” She also cited Professor Karanja of Nairobi University who said: “With so few specialists, it means women in rural and peri-urban areas have no access to a gynecologist because the few who are available are concentrated in urban areas and they are expensive”.
Sections of a report titled: “Countdown to 2015: The role of Parliamentarians in accelerating the attainment of MDGs 4 and 5 in Kenya” were published in the Sunday Nation October 26, 2008 as follows: “The report paints a grim picture of the situation, casting aspersions on the ability of the country to attain Millennium Development Goals (MDGs) 4 and 5, which aim at reducing child mortality and improving maternal health respectively by the year 2015.
This, according to the report, is because child mortality has been on the increase in the last 19 years and maternal mortality deteriorating within the same period. According to the report, child deaths increased from 90 in every 1,000 births in 1990 to 121 in 2003. Maternal mortality stands at 560 in every 100,000 births. The report says the situation can be rectified if there is political will among parliamentarians and other groups.”
Good luck to all Kenyan workers during the 48th “Jamhuri Day” celebrations on December 12, 2011 and thereafter, in their quest for a better quality of life.
Jared Odero
About the Author
Healthcare today worse than 30 years ago, say doctors
Published on 09/12/2011
By Peter Orengo
The first time Kenyan doctors downed their tools to demand improved remuneration and proper working conditions was early 1972, nine years after independence. It was seen as a surprise for a country that upon gaining self-rule promised to combat illiteracy, disease and ignorance. Some of the doctors who are still alive today felt that the battle against disease had not taken shape.
The same story was to be repeated in 1981 and 1994 when doctors deserted hospitals to demand decent pay. Each time the Government treated the Kenyan doctor with contempt to the extent of sourcing doctors from Cuba and Egypt. Ironically this was happening at a time Kenyan doctors were being declared some of the best in the world, a recognition that was to contribute to the start of doctors’ exodus to other countries.
But the foreign doctors had problems treating Kenyan patients due to cultural differences.
Today many Kenyan doctors are said to be in economic exile in southern Africa, Europe and the US, with some employed in private hospitals in Nairobi and other major towns. Today, 48 years after independence, Kenyan doctors have withdrawn their labour yet again to call attention to a collapsing healthcare system.
The strike, which began last week, has not only resulted in anguish and death of patients, but also brought to the fore many questions. Why must Kenyans suffer before our leaders can act with urgency and a sense of patriotism? Where does the buck stop? Is it with the yet-to-be formed Salaries and Remunerations Commission?
Is it the doctor or the Coalition Government? These are some of the questions that appeared in blogs and social media sites this week. Kenya Medical Practitioners Pharmacists and Dentists Union (KMPDU) Secretary General Boniface Chitayi said the union must continue with public demonstration until the Government addresses their grievances.
“We can no longer be party to a failed system. We gave the Government a warning a year ago. If it would take a strike to have better wages, secure our future, and improve our standards of living and quality of healthcare for Kenyans, then let it be. He is quick to add that the doctors are not only fighting for better salaries, but for better facilities to ease their work. For him, the system is worse than it was 30 years ago.
“Numbers do not lie. Today 109 newborn babies die every day. This translates to an annual mortality of about 200,000, a fact that has remained unchanged over the last five years. In 1980 it was safer for a mother to deliver in Kenya than last year. This is unacceptable,” said Chitayi.
The UN Population Fund has stated that Kenya is off-track in the attainment of the health-related Millennium Development Goals. In 2006, the World Health Organisation’s annual reported indicated that Kenya was facing an acute shortage of healthcare workers.
Abuja declaration
Chitayi says the Kenyan population is increasing, but the healthcare workforce is decreasing. For the past one year, the doctors’ union has made efforts to engage the Government on the state of the nation’s healthcare with no success,” he added.
He points out that in October last year doctors marched to the Prime Minister’s office to petition him. After a few weeks of fruitless meetings, the petition was forgotten. Similar boardroom meetings are said to have taken place in the past ten years, with no tangible results.
“This was a decade meant to witness many positive changes in healthcare across Africa. While certain African countries have made an effort to keep up with the Abuja Declaration by allocating 15 per cent of their budget to healthcare, Kenya is among the few countries which have reduced budgetary allocation to healthcare,” says Victor Ng’ani, the KMPDU chairman.
Dr Ng’ani says Kenya is not likely to achieve the Millennium Development Goals since three of the eight goals are health-related.He says this alone should warn national policy makers. Healthcare provision has neither been a priority for past governments nor is it one for our current one. “97 specialists who had qualified to join public institutions but whose sponsorship were stopped for lack of funds that would cost only Sh35 million,” say Ngani.
Below is an excerpt from the Kenya National Assembly Official Record (Hansard) from July 8, 2010. The Motion was about MPs’ salary increment according to the Akiwumi Report. MP Jakoyo Midiwo who is also the Joint Parliamentary Chief Whip said the following about Francis Atwoli’s salary:
“Mr. Deputy Speaker, Sir, I want to tell you that among the people who are making the loudest noise is one Francis Atwoli. Mr. Atwoli’s salary is estimated at about only Kshs80 000. That is what he pays tax on. But his allowances per month are more than Kshs5 million. So, I challenge the Minister for Labour to come before this House and explain to Kenyans how much the Secretary General of Kenya National Union of Teachers (KNUT) and Mr. Francis Atwoli earn. In fact, I dare Mr. Atwoli to call for a strike, so that we can tell Kenyans who they are. Those are the people who make money and share it with no other Kenyan.”
Talk of a kettle calling the pot black. Kenyan MPs also take home abnormally high salaries and don’t share them with other Kenyans.
Sweden has 27,500 professionally active medical doctors to serve her population of 9 million, while Kenya has 5,000 doctors serving 40 million citizens – totally shocking, no matter what excuse is given.
While Kenyan doctors and other government workers are paid poorly, Parliament is being renovated to accommodate 325 members from next year. Their new seats will cost Ksh 200,000 each.
HOUSE Speaker Kenneth Marende has defended the procurement of seats worth Sh 200,000 each for MPs. Marende allayed fears the procurement of the seats is a wastage of taxpayers’ money. Hesaid the seats were procured according to the Public Procurement Act. He said initially the bill of quantities revealed an approximate of Sh400,000 which was halved by the Kenya Prisons department.
Each of the seats will cost Sh 200,000 against an initial price tag of Sh 400,000, he said. He said it is important for the chambers to have quality seats.
Business Daily (Nairobi)
Kenya: Inflation Cuts Real Wages Despite Rise in Pay Perks
Geoffrey Irungu
23 May 2011
Kenyan workers lost buying power last year despite being awarded pay increments after a two-year freeze caused by the combination of the 2008 post-election violence and global economic recession, official data released last week shows.
Though nominal wages were up by an average of 3.5 per cent, prices of goods and services rose at a higher rate of 4.1 per cent, leaving workers with negative real wages, according to Economic Survey 2011.
The decline in real wages by 0.6 per cent – the third consecutive year pushed the cumulative decline in purchasing power to 17.5 per cent since 2008 – signalling that recent battles between employers and trade unions over wages will persist for the rest of the year.
Last month’s entry of the inflation rate to the double digits territory and the continued rise in the cost of energy and commodities in a year when the economy is expected to expand by a smaller margin than last year raises the chances of a further dip in real wages this year.
Real wages – a measure of inflation-adjusted pay – remains a key measure of employee welfare that in many countries forms the basis of pay bargains between trade unions and employers. This is despite recent attempts by the government to reposition productivity at the centre of wage negotiations, arguing that only what is produced can be shared.
“We should not be unduly concerned about inflation or the cost living, but about productivity,” said Julius Muia, the chief executive of the National Economic and Social Council – the official think-tank that advises the government on economic policy, adding that without productivity improvement there is no money to be shared.
Economists said the decline in wages by nearly 20 percentage points in the past three years without big trouble in the labour market points to a maturing of employee relations in favour of legal disputes resolution mechanism.
Some labour market observers have however argued that the relative labour market calm in the face of serious wage erosion shows the extent to which trade union power has declined in Kenya.
Increase
Economic Survey 2011 confirms this loss of union power in its finding that the number of collective bargaining agreements declined to 266 in 2010 compared to 297 in 2009 and more than half the companies surveyed reported a decline in the number of employees covered by unions.
The Central Organisation for Trade Unions (Cotu) has been pushing for an increase in minimum wages pointing to the rise in the cost of living for years without adequate compensation.
“We have been telling employers that the pay increments they have offered workers are not enough to cover the rise in cost of living and these statistics clearly demonstrate this fact,” said Ernest Nadome, a Cotu council member.
Cotu was on Saturday expected to ratify a planned industrial action on grounds that the government had refused to acknowledge serious erosion of wages in the country during the past three years.
“We changed the way we calculate inflation but that did not mean prices have stopped moving upwards,” said Mr Nadome, adding that incomes have been eroded by at least 50 per cent in the past three years.
Trade unionists argue that pay increments of between 20-30 per cent is not enough to cushion workers whose incomes have significantly declined in the past three years and are living in difficult economic environment marked by high inflation.
Inflation rose for the fifth consecutive month in April to 12 per cent pushing the cost of many consumer goods beyond the reach of low-income households.
The survey found that salaries and wages declined for three consecutive years starting with 10.4 per cent in 2008, 6.5 per cent in 2009 and 0.6 per cent last year.
High level inflation has seen real wages decline in Kenya for the past 15 years save for 2006 and 2007 when growth in pay was positive.
The combination of declining real wages and a freeze or slow down in jobs growth means Kenya could be losing some of the human development gains it made during the period of steady economic growth between 2003 and 2007.
The decline in real wages and the demand for higher pay has become the centre of a protracted battle between trade unions and the employers’ lobby the Federation of Kenya Employers (FKE).
Kenya’s wage guidelines of 2005 say the desire to give workers a fair minimum wage on the basis of inflation and productivity gains should be the factor in pay negotiations and determination of other terms of employment.
Samson Osero, the executive director at the Institute of Human Resource Management, reckons that lack of clear policy guidelines on management of people at the workplace including how to handle compensation and productivity remains the major obstacle to peaceful labour relations in Kenya.
“Wages should be reviewed regularly as part of a policy so that we don’t have a situation where everyone must wait for May Day to get a pay rise,” said Mr Osero.
Pay negotiations between trade unions and employers are expected to become increasingly difficult with the recent research findings that the most profitable companies around the globe are those that have linked remuneration to productivity.
A joint study by Deloitte Consulting LLP, The Manufacturing Institute and Oracle last year found that 58 per cent of the world’s largest corporations with top quartile profitability had linked employee pay to productivity, while only 36 per cent of bottom quartile companies performed similarly.
Productivity
“Considering all respondents (regardless of size), 55 per cent of highly profitable companies rate their current capabilities in linking employee pay to productivity as “high” compared to only 41 per cent of the less profitable companies,” the report said.
Deloitte found out in another 2010 survey titled “Top Five Total Rewards Priorities” that 66 per cent of respondents planned to make changes in the design of compensation plans, with particular emphasis on performance-based pay and performance management tracking and administration.
Why does Anyang Nyongó and Beth Mugo go abroad for medical treatment? Its because they dont trust the services that the ministries they head offer…..And worse….They are not doing anything to ameliorate the situation.
This is 48 YEARS after independence, we are still offering mediocre medical services…worse than twenty years ago. We will not allow MEDIOCRITY to prevail.
Therefore, The Doctors of this country will stand up for their rights and the rights of Kenyans who cannot afford to go abroad to SA,Europe or US
The leadership of the country displays a nonchalant attitude about the health of its people and must be forced to address this plight…
Maybe it will take a white western tourist to die in a government hospital because there were no doctors or medicine for the govt to spring into action and do its duty
http://www.nation.co.ke/image/view/-/128….st/-/cart12.jpg
Servicing the rich
History
At independence in 1963, the Kenyan government committed itself to providing free healthcare for all as a means to ending poverty. At first it seemed to work. Over the next three decades, life expectancy increased by 20 years and immunisation rates rose from less than 30 per cent to 79 per cent.
However, by the late 1980s, the government was struggling with economic recession, corruption and a crash in the international prices of its main agricultural exports. Under one of its structural adjustment programmes, the International Monetary Fund prescribed some free-market medicine as the solution to Kenya’s financial problems. The programme called for severe cuts in health spending and the introduction of user fees – meaning that patients had to pay for treatment upfront.
Kenya liberalised its healthcare in the hope that the private sector would inject the capital that it sorely lacked. The government relaxed the licensing and regulation of private healthcare providers, and also allowed public sector personnel to engage in private practice.
In 1989, registration and treatment fees were introduced in government hospitals and health centres. The repercussion on the public-health sector was instant. Outpatient attendance fell by 27 per cent at provincial hospitals, 45 per cent at district hospitals and 33 per cent at health centres. Even though children under five were exempt, their attendance fell just as sharply as everyone else’s.10 The adverse effects of the new
policy were so pronounced that the government was forced to remove outpatient registration fees within a year. However, other fees were retained.
With money, rather than need, determining whether a sick person received treatment, health indicators started to nosedive. The death rate of children under five shot up by more than 50 per cent between 1992 and 1998.12 The growth of HIV/AIDS was partly to blame. But many deaths were, and still are, because poor people cannot afford simple medicines like anti-malarials, or antibiotics to combat dysentery.
‘Many patients opted either to stay with their conditions or sought medical treatment in the traditional herbal way, rather than pay hefty medical bills beyond their means,’ says John Kinuthia of Consumer Information Network, a Kenyan non-governmental organization lobbying for consumer rights. ‘These options made the poor more vulnerable health wise.’
When Kenya joined the WTO in January 1995, it gave a signal to foreign investors that Kenya was ‘open for business’. An obligation of joining was to sign the GATS, under which Kenya committed to opening up its insurance services, including health insurance. It set Kenya’s liberalisation policy in stone.
Private health insurance enters the market
Health entrepreneurs spotted a new market. For those using private hospitals and clinics, private health insurance could offer protection against astronomical bills. For large corporate employers, it was a useful way to minimise the cost of providing decent medical care for their staff. For example, inpatients at Nairobi Hospital pay a deposit of £550 plus £31 a day for a bed in the cheapest ward. Use of theatre is £2 per minute. Consultation, laboratory and pharmacy fees come on top of this. In the wake of private health insurance came health management organisations (HMOs), a concept which originated in the United States. An HMO is a for-profit organisation which offers insurance for a restricted package of care. For a fixed fee, customers can receive free treatment from an approved network of hospitals and clinics. HMOs usually have a primary care doctor who acts as a gatekeeper deciding which healthcare providers to refer the patient on to.
MediPlus was started in 1996 by a Kenyan who had recently studied health insurance marketing in the US. Within six years, he built a US$5million empire with 50,000 individual medical schemes, 200 salespeople and 80 staff. Other success stories included Avenue Healthcare (whose owner won the 1999 Best Male Entrepreneur in Kenya award) and Strategis Health.
Clearly there was money to be made. Assured by the WTO that Kenya was a safe place to invest, foreign health insurers, such as Bupa International, Allianz, Goodhealth and AXA PPP, appointed local agents and brokers to sell their services. By 2001, the Kenyan private health insurance market was among the six largest in low-income countries. The US state department recently noted that HMOs now ‘dominate this sector of business and are growing at a very high rate’. Private health insurance took off, winning some 300,000 clients in a matter of years. But there were grave problems with it.
Regulation and bad practice
In Kenya, 56 per cent of the population lives on less than US$1 a day. Private health insurance is beyond the budget of all but a tiny clique of wealthy Kenyans and expatriates. But money alone is not enough to qualify. You must also be healthy. Most HMOs have a lengthy list of exemptions that exclude precisely those who need healthcare most, including the elderly and those with existing chronic conditions, such as diabetes or HIV and AIDS. Those with family planning, pregnancy-related complications and mental illness are also excluded. ‘There is an inherent conflict of interest for HMOs. They minimise services offered for maximum benefit for themselves,’ says Dr Rolf Korte, former director of health and education at GTZ, a German government development agency which has been working with the Kenyan health industry for many years.
As in many developing countries, regulation is weak in Kenya. Consequently clients often do not get the healthcare they thought they had paid for. Furthermore, several HMOs have collapsed in recent years, creating a crisis of confidence in the industry. In 2003, Mediplus, Kenya’s second largest health insurer, collapsed with more than 70,000 members. Nine creditors, mainly hospitals, took the company to court, claiming KSh81 million (£638,000) in unpaid bills. They did not get their money. Cardholding clients have been left stranded as hospitals and doctors, reeling from unpaid bills, refuse to treat them. The Kenya Medical Association (KMA) is so concerned that it has called on the government to ban HMO’s operations in Kenya. ‘We have been at war with the HMOs for as long as they have been here and we have been proven right,’ says KMA chairman, Dr Stephen Ochiel. ‘Many of them are here to fleece the public. They literally take your money when you are well, but when you are sick they’re not there to help you. They always have one excuse or another. Financial success depends on doing as little as possible to the patient.’
With hospitals and clinics transformed into businesses that had to worry about their bottom lines, their attitude to patients was also transformed. The emphasis was on making money, not curing people. Patients who could not pay their bills were subjected to inhumane treatment, such as being chained to their beds until bills were paid or made to work in hospital gardens or kitchens. Such malpractice continues today, although the current government has tried to stop it. For example, a woman was admitted to a hospital in Meru in April 2003 and gave birth to twins. As she was unable to pay the £40 bill, the hospital kept her locked up. The bill escalated to £750 after a year’s confinement.
Similarly, in 2004, 40 mothers were locked up for almost two months with their newborn babies because they were unable to pay for their deliveries. They were kept locked in a single dormitory where they slept five to a bed. They were only freed when a government minister, Karisa Maitha, found out and paid the bill.
Cream skimming
Another widely recognised problem with the growth of private healthcare providers is ‘creamskimming’. This is where the private sector denudes public healthcare of expertise, personnel and equipment. The WTO secretariat is aware of this risk. It has noted: Private health insurers competing for members may engage in some form of ‘cream skimming’, leaving the basic public system often funded through the general budget,
with low-income and high-risk members. New private clinics may well be able to attract qualified staff from public hospitals without, however, offering the same range of services to the same population groups.
In Kenya, hi-tech private hospitals in urban areas have sucked in the most experienced staff (not to mention the wealthy patients), worsening the atrophy of rural facilities where three quarters of the population live. For example, there is one doctor for 500 people in Nairobi, but one per 160,000 in Turkana district.21 The public health sector, starved of resources, is unable to deal with the multitude of poor and sick left behind. Christian Aid found several cases of trained staff leaving the public health sector for better conditions in the private hospitals and HMOs. Nurse Kathleen Msaketa is one example.
‘On graduation, I was posted to a rural hospital where I was the only nurse,’ she recalls. ‘I worked without leave or off days. I was frustrated. After three years, I quit and moved into private practice. My salary doubled.’ Doctor Ndabi Wairioko also moved to a private clinic after three years in public healthcare. ‘The atmosphere in which a doctor operates contributes a lot to morale,’ he says. ‘The lack of basic working equipment and inability to assist patients because they cannot afford drugs…leads to frustration. That’s exacerbated by poor remuneration. The public service is notorious for staff shortages, and doctors there put in many hours for which they are not compensated.’
Back to the future
When a new government swept to power in Kenya in December 2002, it was determined to restore free treatment for all, regardless of their ability to pay.’ The minister of health, Charity Ngilu, said: Thousands of Kenyans do not dare to seek treatment in clinics, health centres and hospitals as they are well aware that they cannot raise the monies for meeting the costs of treatment. How do the poor share the costs of treatment when they cannot even afford food?
Determined that healthcare would not ‘be left to market forces’, Ngilu planned that those with jobs would spend a proportion of their income on national health insurance, as in the UK. The poorest 9 million would not have to contribute anything. In this way, the rich and healthy would subsidise the poor and ill. African Business described Ngilu’s idea as ‘one of the most exciting national health schemes in Africa’. It received widespread backing, both at home and internationally, as recognition grew that forcing people to pay for healthcare at the point of delivery discriminates against the poor and the sick.
‘National social health insurance is something that’s time has come if we are going to help this country. Without health, everything else is nothing. No citizen can produce unless they are healthy,’ says Dr Ochiel of the KMA. Three of the eight internationally-agreed millennium development goals (MDGs) for reducing poverty are health-related. On a visit to Kenya, the UN secretary general’s special adviser on the MDGs, Jeffrey Sachs, said: Easy access to medical care for all is what we, as an international body, strive for. Kenya has shown the way to many other African countries with this plan.
The March 2005 report by the UK government’s Commission for Africa calls for African governments to stop charging for basic healthcare via user fees. It even goes so far as to recommend, ‘where African governments remove fees for basic healthcare as part of reform, donors should make a long-term commitment to fill the financing gap until countries can take on these costs.’
Private fight back
However, despite widespread recognition of the need for a public health service that would meet the needs of the majority of poor patients, government plans have been stalled. At first, it looked as if the appropriate legislation would get through parliament. Indeed, when the national social health insurance bill went to parliament on 9 December 2004, it was passed in a record 30 minutes. But President Mwai Kibaki refused to pass it into law, and sent it back to parliament, saying the scheme had to take into account concerns of the private sector. Soon after, the Kenya Private Sector Foundation went to the high court and sought an order to restrain the government from making the scheme mandatory. It is still waiting for a date for the hearing.
The law had fallen foul of a vociferous campaign led by private health insurers who did not want any opposition. The industry paid for adverts in Kenya’s biggest-selling newspaper, The Daily Nation, calling on Ngilu to withdraw the health insurance bill. They told her to ‘go back to the drawing board’, arguing that ‘private insurance will be crowded out’ and that ‘local and foreign investors will be unlikely to invest in such a climate’.
Evidence of how influential the private insurance lobby was in defeating the legislation comes from an important inside source contacted by Christian Aid. Dr Rolf Korte headed up the team from German development agency GTZ who had been invited by the Kenyan government to help with implementing a national health insurance scheme. He told Christian Aid that HMOs lobbied other influential stakeholders to win them over to their side. ‘The HMOs seriously opposed this scheme,’ he said. ‘They used every possible channel to torpedo social health insurance. They felt this rather threatening to their own business. ‘There is evidence that they had close contact with the World Bank, which took over their argument. That it would interfere with private-sector development. That public expenditure should not be increased,’ he said.
The World Bank became involved in the campaign to halt the national insurance. The Bank’s country director, Makhtar Diop, took an active role in publicly criticising the scheme, appearing on Nation TV’s News Hour.
The KMA is also convinced that the private sector played a significant role in attacking the government’s public-health plans. ‘The HMOs are working day and night to make sure national social health insurance doesn’t see the light of day. It’s a very painful thing – a few people interested in their own pocket can sacrifice a whole nation,’ says the KMA’s Dr Ochiel. However, those within the private sector remain unrepentant. Jagi Gakunju, chief executive of Kenya’s largest private health insurer, AAR, admitted that there is ‘an element of truth’ in the argument that he opposed the scheme because it will reduce profits. But he argues ‘what [Kenyans] need to do first is create wealth and more employment’ before they can afford to restore affordable healthcare.
Conclusion
Despite the fact that the EU is aggressively trying to persuade developing countries to follow Kenya’s example and liberalise their health-insurance markets, the World Health
Organisation is clear about the dangers that private insurance poses to poor people’s access to healthcare.
In a report last year, the organisation specifically warned how private health insurance could lead to a two-tier service under which the poor could only suffer. Experience indicates that unregulated or poorly designed private health insurance systems can indeed exacerbate inequalities, providing coverage only for the young and healthy, and lead to cost escalation… In Africa… regulation of insurers tends to be weak and private insurance may lead to greater inequity and cost-escalation if it expands significantly.
Another major problem for poor countries when they sign up to liberalisation of their services
is that they become formally locked into the agreement. Once services like insurance have been liberalised there is very little room for manoeuvre in terms of ‘deliberalising’. In other words, if countries do not like what they have done in liberalising a sector they will not be able to escape from it. The WTO ensures that once a sector is liberalised it stays that way – whatever the consequences for the poor.
This briefing was written by John McGhie, Claire Melamed, Andrew Pendleton, Katy Migiro and Claire McGuigan. With thanks to Ken Opala. (Christian Aid, 2005)
There is urgent need to rationalise the salaries paid to public servants
By TOM MBOYA
Posted Tuesday, November 29 2011
It was music to my ears when I recently heard that MPs are likely to face a pay-cut after the elections.
While few would contest the fact that the salaries and allowances paid to Kenyan legislators are too high, the more pertinent issue revolves around the salaries paid to public servants, particularly those at senior levels.
First, let’s consider some facts. By last year, our MPs earned an annual basic salary of roughly Sh851,000, making them some of the highest paid in the world.
Secondly, if the Constitution of Kenya (Amendment) Bill 2011 is passed as it is, it will not be possible to know the exact number of MPs due to the one-third rule on gender representation.
Coupled with the fact that the size of Parliament is increasing significantly anyway, the burden of emoluments for an unknown number of legislators would be an unacceptable burden.
Turning to the public service, the average annual pay in 2010 was Sh394,131 compared to private sector employees at Sh393,760 (Economic Survey, 2011).
The public sector wage bill has increased at an annual average of 36 per cent over the last five years.
The bulk of this “growth” is attributed to the hefty salaries of senior public servants, which have risen disproportionately in comparison to those in the lower and middle echelons of the service.
As a result, Kenya now has the dubious distinction of being one of the few countries in the world where senior civil servants earn more than their private sector counterparts.
I, for one, have never come across any economic or management paradigms that justify such disparities.
Let’s look at it another way. According to the International Monetary Fund, the top to minimum ratio in Kenya is 118:1.
This means that top officials earn an incredible 118 times more than the lowest earners.
The disparity is further highlighted by a regional comparison, which reveals that the top to minimum ratio in Uganda is 25:1; Tanzania 20:1; and Botswana 30:1.
We have created a situation that is simply not sustainable, and which encourages the pursuit of public office for purely financial gain. Why reward self-seeking gravitation towards public office?
Is Treasury capable of sustaining these levels of salaries for senior public servants? Or more importantly, should public office be the place to amass unimaginable wealth?
And all this in a situation in which a vast majority of the people live on less than a dollar a day, and our economy is suffering possibly the worst slump in history!
We need to ask ourselves whether, as a country, we can sustain this kind of legalised looting of public coffers.
While it is encouraging that the public sector is growing, if that “growth” is disproportionately manifested in the highest ranks, it is in fact false growth and counter-productive to development.
It serves no useful purpose other than to further entrench the very corruption that we claim to be trying to address.
The time has come to reinterpret the notion of public service — service to the people and to Kenya. There is a need to rationalise the salaries of upper and lower cadres of public servants.
The eagerly awaited Salaries and Remuneration Commission may be well-advised to embark on this process expeditiously, not only to save taxpayer funds, but also to preserve a sense of integrity in public service.
One can only hope that the Salaries and Remuneration Commission will restore reason on the question of compensation to public servants.
There may even be an argument for tying the wages of the lowest-paid civil servants to the highest-paid such that any increase at the higher levels would require a corresponding increase at the lower levels.
To continue on the current course, given the prevailing economic situation, would be sheer lunacy.
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Doctors living in poverty? Does poverty meaning one driving a nice car and living in big house while someone else can not afford 2 meals a day? This is due is all about money not anything else.