Private and rural hospitals are raising concerns over the Social Health Authority’s (SHA) newly introduced reimbursement model, known as the disease weights model. Healthcare providers warn that the lack of transparency in this system could result in financial instability and a decline in healthcare quality. The model applies only to outpatient treatments under Primary Health Care and excludes inpatient services and chronic illnesses like cancer and kidney disease.
The Rural-Urban Private Hospitals Association (Rupha) has strongly opposed the model, demanding full disclosure of the formula used to determine reimbursements for outpatient treatments. They argue that SHA’s secrecy gives it unchecked power to adjust payments at will, making it difficult for hospitals to plan financially and provide consistent services. According to Rupha chairman Brian Lishenga, the undisclosed nature of the formula means it can be altered at any time, leading to unpredictable fluctuations in reimbursements. He warns that this could force hospitals to prioritize treating conditions that offer higher financial returns while neglecting others.
For instance, Lishenga explained that if a hospital treats a patient for malaria and pneumonia in an outpatient setting, SHA will not reimburse based on the claim submitted. Instead, the authority will use an internal formula to determine the payment amount. This, he argues, creates a risk where hospitals may prioritize diseases with higher reimbursements over those that do not generate sufficient returns. He questioned the logic behind this approach, expressing concern that it could limit access to quality healthcare for Kenyans.
“If pneumonia brings in more revenue than malaria, hospitals might choose to focus on pneumonia cases. What happens to malaria patients? This could severely impact healthcare quality,” Lishenga stated. He added that the government’s decision to use this model was misguided and could have long-term negative consequences on the healthcare system.
Despite these concerns, the government has defended the model. Medical Services Principal Secretary Harry Kimtai dismissed claims of secrecy, stating that the approach aims to prevent fraudulent claims that were rampant under the defunct National Health Insurance Fund (NHIF). Kimtai emphasized that the system ensures fairness, with each disease assigned a standard weight that applies equally across all facilities.
“It is not that we are keeping this a secret. We just do not want a repeat of NHIF, where hospitals lodged claims for services they never provided. We are implementing safeguards to prevent abuse,” Kimtai said. He urged hospitals to focus on service delivery rather than worrying about reimbursement amounts.
Beyond concerns over the reimbursement model, private hospitals are also struggling with delayed payments from the government. Lishenga revealed that SHA owes hospitals Sh30 billion in unpaid claims, some of which date back to NHIF. However, the government disputes this figure, stating that only Sh9 billion remains unpaid. Officials claim that they cleared Sh10 billion in payments last year, covering half of the undisputed claims.
Previously, under NHIF, healthcare providers received reimbursements based on actual treatment costs, allowing for predictable payments. With the disease weights model, hospitals fear financial uncertainty could affect service delivery and limit healthcare access for millions of Kenyans.
