SHIF abandons troubled OTP system, returns to biometric patient verification
What you need to know:
- Health Cabinet Secretary Aden Duale yesterday said that biometric verification is a critical step in eliminating fraud and ensuring healthcare funds are used effectively
The Social Health Insurance Fund (SHIF) is set to reintroduce biometric identification of patients in a dramatic policy reversal aimed at curbing corruption and promoting efficiency in Kenya's healthcare system.
Health Cabinet Secretary Aden Duale yesterday said that biometric verification is a critical step in eliminating fraud and ensuring healthcare funds are used effectively, marking the end of the troubled One-Time Password (OTP) system that has plagued hospitals since October 2024.
The announcement represents a U-turn from the controversial decision to abandon biometric identification when Kenya's Social Health Authority (SHA) replaced the National Health Insurance Fund (NHIF) in October 2024.
Under the NHIF system, hospitals had invested heavily in biometric infrastructure and purchased biometric readers as part of a nationwide push to collect biometric data. The infrastructure worked effectively for patient verification until the government discovered systematic abuse.
The government claimed that unscrupulous healthcare providers had exploited the system by misusing patients' fingerprints to process fraudulent claims for thousands of fictitious beneficiaries. This malpractice contributed to significant resource leakage and undermined the system's integrity, justifying the government's decision to eliminate what they saw as a compromised verification method.
In its place, SHA introduced OTP verification, believing this would provide better security and eliminate the fraud that had cost the system billions of shillings.
However, the OTP system quickly revealed fundamental flaws that made it unsuitable for healthcare delivery. Patients reported delays in receiving OTPs due to technical glitches and network issues, which disrupted the timely delivery of healthcare services. The problems were particularly acute in emergency departments, where time-sensitive care became hostage to technological failures.
Healthcare providers found themselves caught in an impossible situation. Dr Brian Lishenga, National Chairman of Rural-Urban Private Hospitals Association, noted that "we spend more time verifying OTPs than attending to patients. The biometric system was seamless and quick. Now, our workflow is heavily disrupted."
Hospitals reported problems with system downtime, sluggish performance, and frequent updates. The situation became even more problematic in rural areas, where some facilities struggled with technical issues such as delays in receiving One-Time Passcodes for patient registration—sometimes up to 24 hours—causing patients to become frustrated and opt for out-of-pocket payments instead.
Recognising the crisis, Mr Duale yesterday announced the dramatic policy reversal: SHA will no longer accept OTP-based authorisation, and all approvals will now be completed using either biometric health ID or the Practice 360 app.
"This biometric system will help us eliminate fraud and misuse of benefits. It will also reduce paperwork, shorten queues for our patients, and ensure that more time is spent on patient care," Duale said.
However, questions remain about hospital preparedness for this reversal. Many smaller facilities had to adapt to the OTP system after dismantling biometric infrastructure when NHIF ended.
"This is a good move. I know we have had issues with OTP, for instance, delays, but how I wish that we could be well organised to stop all the confusion that is being caused in the middle of an implementation of a system. We get confused as hospitals, particularly for the many hospitals like us that struggled with basic system access issues," says one hospital administrator who sought anonymity for fear of being victimised.
"Better oversight"
He adds: "The return to biometrics, enhanced with better oversight through the Practice 360 app, suggests that the solution to fraud may not be abandoning working systems entirely, but rather improving their security safeguards."
The question remains: how sure can we be that the system will not be compromised like the NHIF one?
According to Dr Lishenga, biometric identification is far better than OTP since it requires patients to be physically present at the facility, unlike OTP, where a message can be sent even without the patient being in the hospital.
"The loophole for fraud was greater with OTP than with biometric because one needs to put their fingerprint at three touch points at the hospital: at the admission desk, authorisation of procedure, and at discharge. Combined with quality assurance officers, it improves the chance of eliminating fraud in hospitals," Dr Lishenga said.
He adds: "We support this since healthcare providers have invested a lot of money buying biometric devices and paying for software licences. We can now recoup the money we used by using the system. This is also going to be better for patient care since there will be no downtime of the portal. Unlike OTP, which is dependent on the network, biometric is a database and very fast."
However, healthcare providers are concerned with the immediate directive that hospitals should start implementing this immediately.
"The Ministry should have learnt that every change requires consistent transition and people need to be given time to adapt. Many facilities were never under NHIF and have since been contracted by SHA. They had no biometric identification and would need to purchase the gadgets; it would not happen overnight. They need time to implement this," Dr Lishenga said.
