Let us create money to fund health in Kenya

by Macharia Waruingi, MD DHA

We are certainly incapable of financing health in Kenya. We simply do not have the money we need to pay our medical workers. Nor do we have the money to buy the materials and technologies that we need in our hospitals. The prevailing notion in the country is that we have a shortage of trained people to work in our hospitals. People working at the World Health Organization (WHO) recommend that one doctor should cater to 300 patients only. However, one Kenyan doctor caters to 16,000 patients. That is, at the present state, a doctor in Kenya should cater to 53 times as many patients as the number of patients recommended by the WHO. This patient load is too big for any doctor to handle effectively. The attempt to cater to as many patients as possible at any given time means complete disregard of quality. It is impossible to provide good care under pressure from patient overload. To meet the WHO standard, Kenya needs 83,000 doctors.

Ubrica Food, Life Science and  Health Industry Summit, Dedan Kimathi, Nyeri


Does this mean that we train more doctors? A closer look at this problem shows that training more doctors is not the solution. About 600 doctors graduate from Kenyan medical schools every year. But because of deplorable working conditions, graduating doctors are ready to leave the country as soon as they can. We lose at least 51% of our trained doctors every year, as they move to other countries with favorable work conditions. Those that remain in the country engage in serial strikes to force the employers to create better work conditions. So training more doctors will not solve the problem. They will leave the country as soon as they graduate, for as long as work condition remains the same. As such, real shortage in our health system is not that of doctors, but that of something else.

We also know that our hospitals have an extreme shortage of material resources. Many of our hospitals lack of simple medical supplies such as needles, syringes, gauze, laboratory reagents and the like. Complex medical equipment is seen only in some expensive private hospitals in major towns like Nairobi and Mombasa. Even the expensive hospitals in these major metropolis lack many medical technologies that would make world class medical care possible in Kenya. Without good technologies, the quality of care available in the country is very low across the board. Quality is completely absent in many medical facilities. Kenyan people who can afford, opt to seek medical care out of the country. Outbound medical tourism to countries like India and South Africa is booming. The very wealthy, travel to Europe and United States for basic medical care. Outbound medical tourism is extremely dangerous to the local health system. Not only does it suck out of the country tons of money that patients would pay to local health providers, it also removes the incentive for the middle and upper class citizens to work on conditions for improving the local health system.

Would buying more medical equipment solve this problem? A close look here also, shows that the problem is much deeper than lack of medical equipment, or lack of medical supplies. To buy more medical supplies would mean that we actually have the money to pay for the supplies. Our hospitals have a shortage of medical supplies and equipment because they cannot afford to buy them. We import, literary, everything we use in our hospitals. We do not manufacture a single thing. Imported medical supplies are very costly. Health providers shift the cost of supplies and equipment to their patients. The effect of this cost shifting is that the cost of care skyrockets.

High Cost Low Quality

Compared to India, cost of health care in Kenya is extremely high. Medical care in Kenya is even more expensive than it is in United States. Expensive medical care is inaccessible to our people. The fact that care is expensive in our Kenyan hospitals does not mean the quality is great. As said earlier, health care quality has not been a major point of interest for our providers. Even at very high cost, the profit margin is very low. At such low margins, it is impossible to provide care of good quality.

Shortage of medical professionals, shortage of money to pay salaries, shortage of medical supplies, shortage of medical equipment, deplorable quality of care in our health systems are the things we hear about in the media all the time.

Fundamental Question

What we do not hear about is where the money to pay good salaries to striking medical personnel should come from. Our doctors, nurses, clinical officers and all cadre of medical workers are ready to call on a strike in a heartbeat. Health professionals have even organized themselves into labor unions to force those who should pay them, to cough out more money. They have pressed various government agencies to sign collective bargaining agreements (CBAs) that would ensure more money that would improve their work conditions.

Endless strikes and bargaining have so far yielded nothing. Reason: because there is just no money to pay for all these things that we want. Meanwhile, no one asks the question: where would money to pay for world class medical care come from. Where can we find money to build the nicest hospitals, equipped with the best and most modern equipment, with constant supply of drugs, and accessible to all people.

Without asking this question, we can never go to look for its answer. Naturally, human beings rarely pre-occupy themselves finding answers to questions that nobody asked. Discovery of money to improve our health systems should not be a rarity. Everyone needs the health system at one time or another. As such, the question as to where the money should come from to create world class health in Kenya must be one of central importance to everyone.

Extra legal

Most people we ask generally believe that the government should have money to pay for health improvement. The argument is that health is a public good, and therefore must be provided by the public organization, that is the government, or a religious organization or by charity. This argument overlooks the fact that whoever will eventually pay for health, he or she must have money to pay for it. Neither the government, nor a religious faith based organization, nor a charitable organization would pay for health with money it does not have.

In general, governments raise money from taxation. Our government is very weak at raising money from its people through taxation. Only a handful (about 20%) of Kenyans are in formal employment, that reports taxable income. The rest, close to 80% are engaged in commercial activities invisible to the government. Such commercial activities are termed extralegal. Millions of subsistence farmers, furniture makers, welders, mechanics are engaged in extralegal commercial activities invisible to the government. For example, a woman who sells vegetables or milk on the roadside, or directly to her neighbors does not report the sale to the revenue authority. As such, the government is not able to collect tax from her. Nearly 80% of our adult population is engaged in such unrecorded trades, and therefore not taxable. This is not to say that such people will not show up in hospital when they get sick. Where will money to provide them care come from?

Dead capital

Our government reports the visible economic activities as our Gross Domestic Product (DGP), estimated at US$ 74 billion in 2017. It is this money that our government will take to try to allocate to its functions including health. Our government allocates about 6% of its GDP to health. As you can see, this is very little money. The first problem is that, our government leaves a lot of money uncollected from people who are engaged in the informal economy, who do not report income. In his book, The Mystery of Capital: Why capitalism triumphs in the west and fails everywhere else, Hernando de Soto explained that financial transactions in extralegal commercial activities constitute dead capital.

If 80% of our GDP is extralegal, it means that we leave another four times as reported GDP unreported. Therefore, including the extralegal, our GDP is five times as reported today. Reporting the GDP however, does not mean that the money will be available for allocation to health. First, the government has to reach everyone to who is trading and collect taxes from them.

Rotting capital

A deeper problem however, is the trades that never happen, and therefore, rot away. Millions of tons of our farm produce go to waste; hundreds of thousands of people graduating from our education system also go to waste. As a nation, we not only waste fruits and vegetables from our farms, we also waste the brains of our youth, as we consistently fail to provide jobs that could match their intelligence. This massive rotting capital is anywhere close to 700 times our gross domestic product. When farmers consistently cannot find market for their produce, they quickly slide into poverty, and become open to attack by diseases. They cannot afford to pay for medical care. When graduating students cannot find well-paying and meaningful jobs, they quickly slide into poverty, and become open to attack by diseases. They cannot afford to pay for medical care.

Yet, as potatoes, tomatoes and bananas rot away in our farms, large retailers in our big metropolis like Nairobi and Mombasa, import potatoes, tomatoes and bananas from distant countries like Egypt, South Africa, and even Mexico. When Kenyan farmers cannot sell what they produce to other Kenyans through organized retail, we should not expect our government to have money to pay for nice things in health system. We could solve this problem easily by buying the things that our farmers produce. But this would require us to know why our retailers in Nairobi and elsewhere prefer to sell to us potatoes, tomatoes and bananas from Egypt, South Africa, and even Mexico. We cannot exhaust that discussion here; it will be the topic of another article.

Similarly, we have imported labor from China, Europe, India, United States and elsewhere instead of employing our people. We import labor from China to build our superhighways and railroads. Yet, tens of thousands of civil, mechanical, electrical engineers graduating from our universities cannot find jobs. Again, we could solve this problem easily employing our graduates in the first place, before we look to other countries for people to employ. We cannot exhaust the discussion about why we give our jobs to foreigners instead of giving them to our nationals. When our nationals do not have jobs, they do not contribute to the GDP. This is not to say that they will not turn up in hospital for medical care, if the need arises.

Taking Dominion Over Our Money

Resurrecting the dead capital and debriding the rotting capital is the fundamental solution to creating money. We cannot have good health in Kenya with most of our money going to waste. The deplorable health system in Kenya is a direct result from extreme loss of capital. We are, simply, unable to take dominion of our money. We rely on money borrowed from those who have taken dominion over their money, such as the Western Countries and China. There is no nation that built a world class health system for its people by money borrowed from other nations. A nation has to take dominion of all its money; resurrect all the dead capital, so that everyone (100%) contributes to the GDP; and debride the rotting capital so that not a single produce, or a single skillful person goes to waste.

While this may seem like a daunting task, it is fairly easy to achieve today, with the help of information technology. We can easily create e-Commerce platforms to help people in all communities of Kenya to buy and sell goods to each other. Money transacted on an e-Commerce platform is visible to the government and taxable, and directly contributes to the GDP. With phone companies pushing for 99% mobile phone coverage to families in Kenya, we are ready for a massive online market place, that will bring all our products and produce to market. This will do two important things: (a) everyone with mobile phone will be able to sell what he or she has produced; (b) brokers, who have traditionally notoriously oppressed producers, will vanish in this new trading space, because they will not be needed. E-Commerce for local produce is likely to expand our GDP by more than 700 times in five years or less, as they bring to bear the dead and rotting capital. We will use available capital to create hundreds of thousands of jobs for our graduating students.

By taking dominion of our capital we will have money available to pay for world class health for ourselves. We will use the available money to invest in new technologies in food, life science, and health technologies. With the new money, we will build advanced biopharmaceutical manufacturing industries that will ensure access to high quality medicines. With new money, we will build advanced biomedical engineering manufacturing industries that will ensure access to affordable medical supplies and health equipment for all Kenyans. Our industries will create hundreds of thousands of jobs for our graduating students. By taking dominion of our capital we will achieve vision 2030 of converting Kenya into an industrial nation by 2025.

First published here:  http://ubrica.com/summit/index.php/ubricasummit/index/pages/view/dominion

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