SHA arrears: Hospitals in distress, surviving on loans

Most facilities contracted by the Social Health Authority report being in financial distress, according to a recent survey by a private hospitals lobby.

The survey, covering October to December 2024, indicates that nearly nine out of every 10 hospitals are struggling financially, blaming it on chronic delays in reimbursements.

The findings show 96 per cent of surveyed facilities reported financial distress, with private facilities being the hardest hit at 98 per cent, followed by faith-based organisations (FBOs) at 90 per cent.

Key stressors identified include operational costs (affecting 89 per cent of facilities), payroll expenses ( 87 per cent) and supplier payments ( 81 per cent).

Some facilities also reported shortages of essential supplies, further compromising service delivery. Some said they are turning to loans to sustain operations.

“The reliance on loans is a stopgap measure at best,” the report says.

“It exacerbates long-term financial instability for these facilities.”

The survey was conducted by the Rural & Urban Private Hospitals Association of Kenya (RUPHA), which calls itself “a non-political society of privately-owned medical facilities in Kenya”.

The exercise was financed by the Kenya Healthcare Federation (KHF), Christian Health Association of Kenya (CHAK), Kenya Episcopal Conference-Catholic Secretariat and Kenya Association of Private Hospitals (KAPH).

It was carried out online between December 24 and December 31, 2024, and received responses from 243 healthcare facilities across 63 SHA branches.

Among the facilities surveyed, only 42 per cent of health facilities reported receiving payments for their SHA claims during the three-month period, leaving a majority–58 per cent–unpaid.

Even among those paid, disbursements were minimal, with 52 per cent receiving less than 20 per cent of their submitted claims.

Payments were also infrequent, with most facilities receiving just one payment during the ¬entire quarter.

“Cash flow challenges were evident, with severe financial constraints reported across all facility levels and ownership categories,” the report indicates.

“Addressing these stressors is critical to ensuring the financial sustainability of healthcare providers and their ability to serve patients effectively.”

SHA has contradicted the report and said it has paid more than 90 per cent of the hospitals their claims since October.

The report was released days after Medical Services PS Harry Kimtai assured Kenyans that the government had resolved the challenges encountered during the transition from the National Health Insurance Fund (NHIF) to the SHA.

“Familiarity with the previous system was a huge challenge for most of our hospitals. However, the multiple rounds of training that we had to take our personnel through have been hugely beneficial,” Kimtai said in an interview with the Kenya Broadcasting Corporation.

The government says it has released at least Sh7 billion to health facilities since October.

However, the report indicates glaring disparities between primary and tertiary healthcare facilities.

Primary care facilities, particularly those at levels 2 and 3, were the least likely to receive reimbursements, with only 21 per cent reporting any payments during the period. In contrast, higher-tier facilities such as levels 5 and 6 were significantly more likely to be paid.

“This trend reflects structural challenges in the healthcare system,” said RUPHA chairperson Dr Brian Lishenga.

“Specific measures to ensure financial sustainability for primary care services are urgently needed.”

Payments to primary care facilities were not only infrequent but also paltry.

Of the level 2 and 3 facilities that did receive payments, 29 per cent reported receiving less than Sh50,000. Conversely, tertiary facilities were more likely to receive sums exceeding Sh500,000, although this still fell short of their financial needs.

The Star has contacted SHA for comment. However, on Sunday acting SHA chief executive officer Robert Ingasira dismissed claims made in the report.

He told Nation that SHA has so far paid Sh7.3 billion to 5,000 healthcare facilities. He said more than 90 per cent of the facilities both private and public have been paid.

“The problem is some of these private facilities handle their financial issues secretly and so there are those who receive money and don’t want to disclose which is why I want to show Dr Lishenga the data and he can come with the list of his members we sort it out because data does not lie. For SHA, October and November, more than 90 per cent of the facilities received more than 90 per cent of their money,” he said.