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On price control and generic medicine, Kenyan doctors should take a second opinion



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Doctors have been in the news in the past week for two different reasons. The first issue is a carryover from 2018, based on the intention by Parliament to control the consultancy fees for doctors, while the second is a decision by a corporation intending to restrict doctors to prescriptions of generic drugs for its insured patients.

Both instances are a teaching moment on effects that organised professional bodies have on the formation of policy in Kenya.

The attempts by Parliament to control consultancy fees charged by doctors may have support of a majority of the public because of the manner of its framing as a direct quest to make medical services more affordable. This intention attracts support and places the doctors and their union on their defence, with protestations against it interpreted as motivated by their self interest.

And their correct argument is that Parliament’s attempt at price controls for consultancy fees is misguided, their reasoning being that the poor state of public health facilities is the main driver of prices in private medical care hence ought to be the main focus.
And this position has merit because the private and public sector health services are substitutes. Thus most Kenyans only resort to private services because of the better quality or the absence of quality services in the public sector.

Their argument so far is correct, except that the medics expressed an opinion then follow up with the claim that adoption of universal health services model is the solution to the challenges in Kenya’s medical services provision. By this, they are expressing preference for the government to be the main client of the medical profession and pay for health services on behalf of citizens.

The challenge is expressed well but any dispassionate observer can see that the cost of medical services in Kenya is partly driven by the elite model of medical professionals training that the country has maintained, with the effect that the ratio of medical personnel to the population is getting worse by the year.

These doctors are right in opposing price controls for professional services but their reason for it is informed by their self-interest to drive employment of doctors in the public sector. If cost is indeed a problem, there is no assurance that adopting one model of health service provision from the public sector is the solution.

Secondly, it is completely untrue that health services are a ”public good” that would be best provided by the state. Government may make arrangements for the healthcare to be provided at public cost, but the services are appropriated by individuals at a time.
Therefore, the doctors are right in opposing price controls but some of their reason for that is predictably self interested while others are plain wrong.

A major reason for high costs in medical care in Kenya is the fact that the number of qualified medical practitioners is extremely low, even for Kenya’s level of income. Parliamentarians and concerned Kenyans ought not to be trying to control the prices through demand-side interventions but could expand the supply of professionals by funding the overdue expansion of medical schools. Having more doctors in Kenya is both in the public interest and is good economics too because it would provide price pressure on the fees that legislators complain about.

On the second issue, a large insurance corporation that provides medical insurance announced a policy that doctors in its panel may only prescribe generic drugs in the treatment and care of the insured. By all means, this seems to be a sensible corporate policy to contain high costs of prescriptions and thereby provide value for money and possibly reduce their prices.

Here too, there were declamations of the firm by some professional doctors stating that this is unacceptable interference with the judgment of clinicians. This response is not only disingenuous but also blatantly self-serving. There is precedence for firms and even governments in Africa that insist on purchasing generic versions of drugs because these generic versions of drugs are usually cheaper.

It is unclear why a firm should be under pressure by doctors to maintain expensive versions of medicine, unless these doctors have preferences for products of specific pharmaceutical firms while patients take the cost.

One of Kenya’s most recognised medical practitioners reminds Kenyans regularly that achievement of qualifications to practice medicine is no a mean feat, and that the profession counts Kenya’s most intelligent people. Professor George Magoha may be right, but his colleagues who insist that a firm may not adopt methods for managing costs undermine his argument.

Tax payers must remember that professional associations represent intelligent people who do not abandon private interests whenever they pontificate on public affairs.

Kwame Owino is the chief executive officer of the Institute of Economic Affairs (IEA-Kenya), a public policy think tank based in Nairobi. Twitter: @IEAKwame