Private hospitals in Kenya face collapse amid financial strain
A survey by RUPHA found one in four private healthcare facilities in Kenya considering closure due to financial struggles.
What you need to know:
A new nationwide survey conducted by the Rural and Urban Private Hospitals Association of Kenya (RUPHA) has revealed that one in four facilities is considering selling their business due to a financial crunch.
According to the report, the situation caused by delayed reimbursements from the government, rising statutory obligations, and inflexible regulations does not augur well for the health sector in Kenya.
“This signals a crisis in confidence in the health system’s economic environment,” reads part of the 17-page report.
Delayed reimbursements
Dr Brian Lishenga, RUPHA chairman, said both private and faith-based healthcare providers were facing a silent crisis.
“Without urgent reforms in financing regulation, and workforce protection, we risk losing vital frontline facilities,” he said.
In the survey, major private and faith-based health facilities in Kenya said they had scaled down their operations by 82 per cent due to eroded financial sustainability.
The survey conducted between March 3 and 4, 2025, involved 157 unique private and faith-based facilities in 30 counties from Level 2 to Level 5.
However, the report says that Level 2 and 5 facilities saw their Clinical services most affected, followed by administrative diagnostic units.
At least over half of the facilities surveyed said they have reduced non-clinical staff in administration, housekeeping and food services.
“Medium Level facilities, which include Level 3 and 4 hospitals, are likely to scale down surgical and specialised services,” said the report.
According to the report, pressure on payroll driven by statutory deduction and licensing fees has forced the facilities to initiate staff cuts and voluntary resignations.
“Only three per cent of the facilities increased staff while at least 71 per cent of the facilities have hired staff on a temporary basis,” said the report.
Mandatory government statutory deductions like Social Health Insurance Fund (SHF) and Housing Levy, Pay as You Earn (PAYE among others, were cited as the top payroll cost drivers affecting about 90 per cent of Level 4 facilities.
“Voluntary resignations increased by 71 per cent –most notably in Level 4 with 82 per cent of staff quitting and 75 per cent of staff in Level 3 resigning,” said the report.
However, according to the report, nursing staff were the most affected by both layoffs and resignations, followed by Clinical Officers, lab technologists and pharmacy.
The report paints a grim future as most of the facilities face further strain, with more than half the facilities planning further staff layoffs while a similar number plan to scale down their services.
The private hospitals association suggests a raft of recommendations to save the facilities from dying, including timely reimbursements to health care providers.
Urgent reforms
Other recommendations include creating performance-based financing models that promote continuity, streamlining the e-claims system to reduce the administrative burden on providers, consolidating licensing requirements, and adopting joint inspection protocols to reduce compliance fatigue.
The providers also want to introduce grace periods for facilities in financial distress, improve communication and turnaround time for resolving facility queries and grievances, offer tax incentives to healthcare facilities in counties with poor public sector coverage, and create a legal framework for healthcare sector resilience and sustainability.
fmureithi@ke.nationmedia.com
