Kenya's new health scheme, the Social Health Authority (SHA), which was established to replace the graft-ridden National Health Insurance Fund (NHIF) and restore public confidence, is currently embroiled in a multifaceted crisis. This crisis is characterized by widespread fraud, unprecedented financial distress among private healthcare providers, and the spectacular failure of a multi-billion shilling digital system initially designed to prevent such malpractices. These issues have collectively ignited significant concerns over the prudent management of public funds and the long-term accessibility of healthcare services across the nation.

Health Cabinet Secretary Aden Duale recently disclosed that the SHA had rejected fraudulent claims totaling Sh10 billion from various hospitals. This revelation has intensified calls from a broad spectrum of health stakeholders and leaders throughout Kenya, urging Duale to accept personal responsibility for the pervasive fraud undermining the new health system. Despite the Kenya Kwanza administration's proactive efforts to overhaul the health sector, the SHA appears to be contending with similar, if not exacerbated, challenges that plagued its predecessor.

Adding to the deepening turmoil, Kenya's private health providers, through the Kenya Healthcare Federation (KHF), have issued a stark warning regarding the imminent collapse of their operational network. KHF, whose members are pivotal in delivering approximately 60 percent of medical care in Kenya, are facing severe financial distress due to an accumulating burden of unpaid claims. Many of these debts were inherited from the defunct NHIF. The federation has directly accused the government of failing to comply with President William Ruto’s directive, issued on March 5, to settle all NHIF debts that were below Sh10 million.

An internal memo from KHF articulated the gravity of the situation, stating, “This debt has reached an unsustainable level, and further accumulation will lead to lack of access and/or serious deterioration of quality.” The federation reported that numerous providers are being compelled into difficult decisions, including facility closures, staff layoffs, and even asset auctions, while simultaneously struggling to meet their fundamental contractual obligations. They further highlighted a prevailing atmosphere of hostility, characterized by the arbitrary rejection of claims without clear justifications and broad accusations of fraud, which has collectively eroded investor confidence within the health sector.

Compounding the crisis is the startling disclosure that a multi-billion shilling digital superhighway system, initially funded by taxpayers at a cost of Sh104 billion and intended specifically to curb fraudulent claims, has completely collapsed. The failure of this crucial system has rendered the claims process vulnerable to widespread manipulation, leading to an estimated Sh24 billion in potential losses. In a significant and concerning reversal, the Social Health Authority has been forced to revert to a manual system for the verification of claims following the realization of these suspected massive losses.

In response to mounting pressure, including explicit demands for his resignation from a group of Members of Parliament operating under the Kenya Moja coalition, Cabinet Secretary Aden Duale firmly dismissed these calls. He countered by accusing certain lawmakers of engaging in blackmail and exhibiting conflicts of interest, asserting that their own health facilities were among those flagged in the controversial SHA payment claims saga.

To navigate the escalating crisis, the KHF has proposed a comprehensive series of urgent measures. These include the issuance of default notices to patients whose care is covered by non-performing SHA-managed funds, mandating patients to sign liability undertakings, and actively engaging lawmakers to advocate for heightened accountability within the health sector. Furthermore, the federation has demanded enhanced transparency from SHA concerning claim payments, collections, and the overall performance of its administered schemes, alongside the establishment of a clear and effective appeals process for rejected claims. KHF issued a stark warning: without immediate intervention, “If SHA or any other payer does not pay, client engagement should revert to cash basis,” a scenario that could impose catastrophic out-of-pocket expenses on Kenyan citizens. Despite these profound challenges, KHF reiterated its unwavering commitment to ensuring broad access to healthcare, underscoring the indispensable role its members play in the nation’s health system.