When the government moved from the National Health Insurance Fund (NHIF) to the Social Health Authority (SHA), the aim was to revolutionise medical care by expanding access and improving services.
Before NHIF was phased out, its board identified gaps that needed to be addressed for a smooth transition. The concerns were overlooked, leading to the mess being witnessed today.
“There is need to increase focus on human resource. This will increase customers and add resources, white focusing on all aspects of health to achieve effective delivery in addition to ensuring available services,” the board said.
The Rural and Urban Private Hospitals Association of Kenya (Rupha) underlines the deteriorating situation as medical centres face financial and operational instability.
The NHIF Board, which was in office until June 2023, repeatedly said that the transition required careful management.
National Health Insurance Fund board chairman Michael Kamau (left) and acting CEO Samson Kuhora before the National Assembly’s Health committee at Parliament buildings on July 25, 2023..
Photo credit: Dennis Onsongo | Nation Media Group
The SHA Board officially took over in July 2023, rushing through structural changes without addressing key gaps.
One of the biggest oversights was failure to allow sufficient time for NHIF’s work to be completed before SHA took control.
The board said the transition needed thorough planning. The rushed implementation confused providers, insurers and policyholders, disrupted hospital operations, delayed patient services and complicated claims processing.
“We were unprepared. There was no time to understand the new system. This caused chaos in the hospitals,” Rupha officials say.
Technology was another area NHIF had identified risks. The board recommended that the SHA system be tested alongside NHIF’s existing infrastructure before transition. However, SHA opted for an abrupt transition, resulting in technical failures that slowed down claims processing and impeded policyholders’ access to services. This led to delayed reimbursements and frustrated hospitals.
Verification was particularly problematic. A February 16 report by Rupha said 83 per cent of healthcare providers struggled to verify patients due to delays in one-time passwords (OTPs), exacerbated by the fact that 59 per cent of the sick did not have access to phones.
“Technology should drive business and should be seamless. The two systems should have run parallel instead of having a direct changeover. There was a need to map out the systems beforehand for the new system to be implemented,” report said.
Stakeholder engagement was also neglected by the SHA. The NHIF Board said providers, insurers and contributors needed to be involved in shaping the transition.
Many of these key players were excluded from discussions. Because of that, hospitals, private insurers and devolved governments struggled to adapt, resulting in service disruptions and resistance to SHA.
Health Cabinet Secretary Deborah Barasa when she appeared before the National Assembly Departmental Committee on Health on February 20, 2025.
Photo credit: Dennis Onsongo I Nation Media Group
The lack of engagement led to financial strain, with hospitals reporting delayed payment and reduced capitation rates.
By December 2024, some 39 per cent of hospitals had not received any payment from SHA, and those that had experienced an average 23 per cent reduction.
“We are operating at a loss. The government owes us millions of shillings yet we are expected to continue treating patients,” said Rupha chairman Brian Lishenga.
The transition failed to take into account the importance of staff preparedness. The NHIF Board had stressed the need for proper training and orientation.
Hospitals struggled to process claims, insurance offices experienced backlogs and policyholders had difficulty accessing care.
“There are nurses and clerks who don’t know how to deal with SHA claims,” a union official told the Sunday Nation.
Financial instability has also become a key consequence of the overlooked warnings. The NHIF Board had said that SHA needed strong financial structures to achieve its universal health coverage objective.
Ignoring the warning led to delayed reimbursements and some hospitals restricting services to insured patients.
Grace Njoki and Diana Akoth (seated) when they stormed Health Cabinet Secretary Deborah Barasa’s media briefing at Afya House in Nairobi on January 15, 2024.
Photo credit: Billy Ogada | Nation Media Group
The latest report by Rupha shows that as of last month, hospitals were in a financial crisis, with unpaid arrears totalling Sh30 billion, some dating back to 2017.
Rupha said on February 20 that more than 600 affiliated hospitals would suspend SHA services from February 24.
The SHA team overlooked strategic communication. The NHIF Board said clear public education was essential in ensuring Kenyans understood the SHA benefits, contribution models and claims processes.
However, misinformation and confusion characterised the transition, leaving policyholders uncertain about their rights and access to care. Without a properly structured communications plan, SHA failed to gain trust, making the transition chaotic.
