SHA in Sh1 billion secret deal after system failure
Cabinet Secretary for Health Dr Deborah Barasa (Left) and Social Health Authority chairperson Dr Mohammed Abdi appear before the National Assembly Health Committee at the Continental House Nairobi on November 7, 2024.
Safaricom and its consortium partners have hired a new firm to resolve a critical failure in the Social Health Authority (SHA) system claims portal.
In a potentially costly deal crafted out of Kenyan taxpayers’ purview, the Safaricom consortium signed up a fourth partner, Savannah Informatics, to provide a portal to process claims by private facilities.
The new firm was brought in to calm the storm caused by mounting pressure from private-owned facilities and the public, and to comply with President William Ruto’s directive to shift to the new system. Apeiro Ltd, a firm with links to the controversial Adani Group, was initially tasked with providing an e-claims portal.
While Savannah Informatics stepped in to stabilise the system, the arrangement has raised questions about long-term planning, cost transparency, and the future of Kenya’s healthcare reimbursement framework.
The Ministry of Health and Safaricom did not respond to our queries on whether Savannah Informatics’ involvement will increase project costs above the already budgeted Sh104.8 billion for the delivery of a digital ecosystem for the government’s universal healthcare plan.
Safaricom SHA consortium
Apeiro, the largest shareholder in the Safaricom SHA consortium, has business links to the Adani Group, the Indian conglomerate, whose multibillion-shilling, 30-year exclusive lease of the Jomo Kenyatta International Airport was recently terminated by President Ruto after its principal shareholder was indicted for corrupt deals by the United States government.
Savannah Informatics is a digital healthcare solutions provider incorporated on January 16, 2013. Noble Venture Holdings Ltd, a firm incorporated on June 21, 2019, is the biggest shareholder in the firm, with 50 shares. Its incorporation date indicates that there were ownership and directorship changes to Savannah Informatics’ structures in 2019.
Noble Venture is owned by three doctors—Daniel Ngure Nyaga, Justus Kilonzi Paul and John Waithaka Muthee—and accountant Paul Mutinda Nganga. The four each own 15,000 shares.
Otic Investments Ltd owns 10 shares in Savannah Informatics, making it the second-biggest shareholder. The family of Equity Group Board chairperson Isaac Macharia owns Otic Investments.
Its shareholders are Mr Macharia (300 shares), Sophie Wangari Macharia (240 shares), Ian Macharia Muthure (130 shares), Joy Gacamiu Muthure (120 shares), Job Kihia Muthure (110 shares) and Alex Kihia Muthure (100 shares).
Savannah Informatics Employee Share Ownership Trust Registered Trustees owns eight shares in the firm.
Octamed Health Care Services Ltd owns five shares. Its ownership records were not available from the Business Registration Service portal on account of a technical hitch blocking access to the document.
A past audit on a popular private hospital, however, showed its owners and directors to be Bernard Githae Munene, Paul Ngugi Njuguna, Michael Mugo Nguithi, Festus Mwetu Ilako, Jessie Nyokabi Githang’a, Isaac Muthure Macharia, Lucy Waceke Ngugi, David Githang’a, Caroline Wanjiru Githae, Dunera Rahel Ilako, Ann Nyokabi Nguithi and Sophie Wangari Macharia.
The rollout of the Integrated Healthcare Information Technology System faced delays after it failed test runs in Marsabit and Tharaka-Nithi counties.
After the failure, the Ministry of Health then directed that hospitals continue using the old National Health Insurance Fund (NHIF) Integrated Claims System, which was up and running for only a week after the rollout. It was then phased out and hospitals were instructed to go the manual way of processing claims for almost a month. Then Savannah Informatics was brought on board.
“President Ruto had set a hard deadline. When the initial system was tested, it failed critically, forcing stakeholders to scramble and bring in Savannah Informatics,” said Dr Brian Lishenga, National Chairman of the Rural-Urban Private Hospitals Association.
“Initially, we were using the NHIF system, this was phased out and only civil servants are using this. Then they advised that we go the manual way, and after a month, they brought in the local firm to handle the claims. This is what hospitals are currently using,” Dr Lishenga said.
Healthcare financing
The SHA system, touted as a game-changer for healthcare financing in the country, was designed to replace the NHIF model. However, when the consortium that includes Safaricom, Apeiro and Konvergenz Network Solutions Ltd failed to deliver a functional claims-processing system, an alternative had to be found in haste. The cost of this hasty arrangement squarely falls on the shoulders of Kenyan taxpayers.
According to insiders, Savannah Informatics was chosen because of its industry experience and ability to expand and deploy its system quickly. However, the arrangement is far from ideal.
“Safaricom is essentially developing the system as we use it. It’s like building a house while living in it. Anything can happen. This is why claims are delayed, causing issues like the pre-authorisation backlog for surgical claims,” Dr Lishenga explained.
According to an insider at Savannah Informatics, as the fourth contracted firm, they are set to be paid Sh1 billion. This is the agreement with Safaricom, the consortium leader. What is not clear from the agreement is whether the amount is on top of the Sh104 billion tender the consortium secured to set up the SHA system.
“Why wasn’t the contract with Savannah Informatics made public? This is a matter of public interest. Without Savannah, we wouldn’t have a functioning system today, but Kenyans deserve to know the terms and costs involved,” Dr Lishenga said.
Insiders suggest that Savannah Informatics’ role is temporary. By June 2025, the consortium’s original claims-processing system is expected to be ready. But what happens to Savannah Informatics after that? Will taxpayers have to bear the cost of transitioning yet again?
“I don’t see the Savannah portal existing beyond June 2025. The original consortium will be ready by then,” said an anonymous source close to the project.
Critical procedures
While changes are being made in the system as hospitals and Kenyans use it, hospitals across the country report delays in pre-authorisation for surgeries and other critical procedures, leaving patients to suffer as hospitals are forced to ask for cash payments upfront.
“Patients are the ultimate victims here. The lack of readiness and transparency is causing unnecessary pain and hardship,” said a hospital administrator.
“We need clarity and accountability,” said Dr Lishenga. “Kenyans deserve to know how their money is being spent and why the system they were promised is still not functioning as it should.”
As Savannah Informatics continues to bridge the gap, the question remains: Will the SHA system ever deliver on its promises, or will it become another costly failure in Kenya’s healthcare reform journey?
The SHA system’s readiness has been a contentious issue from the start. Since its launch, hospitals have reported delays in claims processing, with some waiting weeks for approvals for critical procedures. Industry insiders suggest that the rushed rollout of the system may have contributed to these inefficiencies.
“Safaricom and the SHA team were aware of the operational gaps, yet they pushed forward. Now, hospitals and patients are paying the price,” said a senior healthcare administrator who requested anonymity.
