Mass layoffs of workers in private hospitals over SHA pay crisis
The Social Health Authority building in Nairobi.
What you need to know:
- 66 per cent of nurses are among the hardest-hit healthcare workers in the country.
- Other affected groups include clinical officers (56 per cent), laboratory staff (41 per cent).
Seven out of 10 nurses in private and faith-based hospitals have been laid off due to financial difficulties caused by delayed Social Health Authority (SHA) payments.
Hospitals are demanding billions from SHA as pay for services offered with the debts largely inherited from defunct National Health Insurance Fund (NHIF).
The Rural and Urban Private Hospitals Association of Kenya (RUPHA) reported on Tuesday that 66 per cent of nurses are among the hardest-hit healthcare workers in the country, as private and faith-based hospitals have had to scale down their operations because of these financial issues.
Other affected groups include clinical officers (56 per cent), laboratory staff (41 per cent), pharmacy staff (34 per cent), and physicians or medical officers (30 percent).
In a meeting with the House Committee on Health, almost two weeks after RUPHA declared an indefinite suspension of Social Health Authority (SHA) services, Dr Brian Lishenga, RUPHA Chairperson, said that 82 per cent of hospitals scaled down operations in the past 12 months.
This, he said, affected services offered in clinical units, administrative and non-clinical departments, diagnostic units, and operating theatres. Some hospitals had even closed down entire hospital branches or satellite facilities.
In a presentation to the committee, Dr Lishenga stated that “87 per cent of them struggled to meet payroll, forcing staff layoffs. 55 per cent of providers faced debt-related issues, with 32 per cent of them at risk of asset auctions and 18 per cent involved in small claims court cases. 89 per cent of facilities had difficulty covering operational costs such as rent and utilities, while 74 per cent of facilities reported shortages in essential supplies, affecting service delivery.”
Some hospitals said Dr Lishenga, “experienced increased voluntary resignations, indicating a worsening crisis in workforce retention.”
Due to retrenchments, which have led to a human resource crisis, RUPHA notes that their healthcare facilities have resorted to “increased use of locum staff, restructuring of departments, hiring freezes, and outsourcing of services” in a bid to cope.
“40 per cent of facilities required patients to make out-of-pocket payments, increasing financial hardship for patients. Patients without proper identification were denied care, as SHA verification remains problematic. 51 per cent of facilities also reported turning away insured patients due to uncertainty of claim approvals,” said Dr Lishenga.
“Some providers have stopped offering certain services or limited care for SHA beneficiaries due to financial instability. Patients also face longer wait times or outright denial of care, especially in facilities that have scaled down essential services,” he added.
Dr Lishenga lamented that unresolved efficiencies in the NHIF-SHA transition, such as unresolved challenges in patient registration and verification, difficulties in reaching the SHA contact centre and errors in portal functionality, affected access to care for insured patients, hindered claims resolution and contract management, and affected claims processing and contract approvals, respectively.
Dr Kanyenje Gakombe, Chairperson of the Kenya Healthcare Federation, stated that over the past one and a half years, at least five hospitals had had their assets auctioned and that they have many cases in the small claims court. Other hospitals, he said, have been forced to take commercial loans on high interest rates to remain float while awaiting funds owed to them by the government to be released.
NHIF arrears remained a critical concern, with 56 per cent of facilities having completed reconciliation of claims, and 52 per cent of unpaid facilities asked to resubmit banking details. Those who have not reconciled the claims, said Dr Gakombe, struggled due to “lack of awareness and portal access restrictions.”
Dr Eric Musau, Chairperson of the Kenya Association of Private Hospitals, decried delayed payments and reimbursement challenges by Medical Administrators Kenya Limited (MAKL), which handles medical functions for the biggest private health insurance schemes in Kenya.
He explained that claims submitted in June 2024 were paid for in February 2025, forcing hospitals to borrow, incur salary arrears running up to three months, and restrict access to medical supplies.
“Some MAKL-contracted facilities were reimbursed at significantly lower rates than others for identical services, with no justification for the discrepancies. 100 per cent of surveyed MAKL-contracted providers reported claim reductions between 10 and 30 per cent, without clear reasons,” said Dr Musau.
“Facilities were also forced into accepting lower reimbursement rates in exchange for claim approvals, leading to substantial financial losses. 86 per cent of surveyed providers confirmed that MAKL forced them to refer patients to MAKL-preferred providers, even in cases where the referring facility could handle the cases, undermining patient choice and continuity of care. Providers also experienced delays in contract renewals and unexplained modifications to contract terms, leading to service interruptions and revenue unpredictability,” he added.
Dr Musau also noted that there was inconsistent adjudication of claims, where claims submitted for identical procedures received different approvals or rejections.
The three institutions are now urging the government to fast-track improvements to the SHA portal to ensure smooth registration of patients and processing of claims and payments and for the release of all immediate payments for all claims that have already been reviewed and verified and which are only awaiting availability of funds.
They have also urged the government to develop a clear plan to clear pending claims within the next three months, for the government to resolve all longstanding disputed claims, including those dating back to 2017, and to establish the Disputes Resolution Tribunal of SHA to manage claims and contract disputes, thus ensuring timely resolution.
mchelangat@ke.nationmedia.com