Kenya's healthcare system is staring at a crisis, following a double blow that threatens to cripple service delivery across the country.
A recent High Court ruling that has stopped the NHIF Pending Bills Verification Committee from continuing its work of validating claims owed to hospitals, and the National Treasury's failure to make provision in the upcoming 2025/2026 budget to settle billions of shillings owed by the now defunct National Health Insurance Fund (NHIF), are putting the already strained healthcare system at further risk.
As a result, hospitals are struggling with unresolved claims, some dating back to 2021, with no clear path to recovery, affecting the operations of public, private and faith-based health facilities, jeopardising essential services and the health of millions of Kenyans who rely on government-backed insurance for access to care.
The Eldoret High Court has temporarily suspended the operations of the NHIF Pending Medical Claims Verification Committee pending the outcome of a constitutional petition challenging its legality.
"Pending the hearing and determination of this petition, an interim order is hereby made suspending the operations of the NHIF Pending Medical Claims Verification Committee and restraining the committee from making any report, recommendations or taking any action in terms of the said gazette notice, “Justice Reuben Nyakundi ruled.
The court also restrained Health Cabinet Secretary Aden Duale, the Principal Secretary and the Attorney General from facilitating the work of the committee or acting on the basis of the gazette notice.
The ruling followed an application by four petitioners who argued that the appointment of 19 people to perform a function reserved exclusively for the Auditor-General and his staff violated Article 252(1)(c) of the Constitution, among other things. The NHIF Pending Bills Verification Committee was established in January 2024 under the Minister of Finance.
Established in January 2024 under the Ministry of Health, the NHIF Pending Bills Verification Committee was tasked with reviewing and verifying old claims prior to payment. However, the situation has left thousands of claims in limbo, many dating back to 2021, despite hospitals submitting complete documentation to support their claims.
Dr Brian Lishenga, chairperson of the Rural and Urban Private Hospitals Association (Rupha), said the development would have a significant impact on healthcare delivery.
"I am consulting with providers. We have also not seen any budgetary allocation for NHIF arrears," said Dr Lishenga.
Meanwhile, Treasury's failure to allocate any of the outstanding billions has left public, private, missionary and faith-based hospitals financially paralysed.
These institutions provide a wide range of services under the NHIF, including dialysis, cancer treatment, surgery, maternity and chronic disease management. The lack of repayments has led many hospitals to delay staff salaries, reduce services, suspend insured treatments and default on loans taken to expand infrastructure.
The financial strain has also made it more difficult to procure essential medical supplies, as suppliers demand advance payments due to a loss of confidence in reimbursement systems.
Dr Lishenga warned that the Social Health Authority (SHA), which is replacing the NHIF under the new Social Health Insurance Fund (SHIF), had distanced itself from the NHIF's liabilities, further worsening the trust deficit in public health financing.
"The NHIF liabilities are not a new problem. The challenge has been the SHA's attempts to divest itself of these liabilities," said Dr Lishenga.
One of the worst affected institutions is the Aga Khan University Hospital, which is owed over Sh1.5 billion by the NHIF.
The hospital's Chief Executive Officer, Rashid Khalani, recently raised his concerns, noting that these delays were undermining the hospital's financial planning and threatening investment in medical infrastructure, training and research. While the hospital has maintained its clinical standards through strict internal quality controls, he warned that the current situation was unsustainable.
"These delays are affecting our financial planning, slowing expansion and threatening our investments in technology, research and medical training," said Mr Khalani.
"Everything has a cost - staff, equipment, drugs and laboratory work. If these costs are not paid, quality will eventually suffer. At the moment we are absorbing the shocks, but this is not sustainable in the long run."
Meanwhile, medical practitioners and health policy experts argue that failure to resolve NHIF's debt risks undermining Kenya's efforts to achieve universal health coverage.
Stakeholders, including the Kenya Medical Association and the Kenya Private Hospitals Association, are calling for urgent intervention, warning that failure to act fast could force hospitals to close, putting millions of lives at risk.
