Study exposes gaps in SHA

Institute of Economic Affairs programme coordinator John Mutua addresses the press in Nairobi on governance, financing and equity concerns over SHA. [Collins Oduor, Standard]

The Institute of Economic Affairs (IEA) has released findings from an analysis conducted between November 2025 and January 2026 on the Social Health Authority (SHA), showing a healthcare system that is not operating as it was envisaged.

The assessment examines the performance of SHA’s three funds: The Primary Health Care Fund (PHCF), Social Health Insurance Fund (SHIF), and Emergency, Chronic, and Critical Illness Fund (ECCIF).

While SHA has registered notable progress, such as registration of more than 29 million Kenyans, the study finds that the system has significant weaknesses that threaten its sustainability and effectiveness.

SHIF, which is the more popular of the two, is contributory. Salaried Kenyans pay 2.75 per cent of their gross salary into SHIF.”

But the majority of Kenyans – over 80 per cent – work in the informal sector.

“We take note that collecting contributions from this informal sector is a major challenge. This group contribute into SHIF pay based on a means testing tool.

“The tool has weaknesses that give us an inclusion-exclusion gap: eligible Kenyans become excluded from benefits, whereas those who are ineligible are included.

“We suggest that the country should adopt a hybrid tool that incorporates both qualitative and quantitative methods of verifying the ability of everyone to pay,” John Mutua, an officer with IEA, said.

SHA has been in operation since October 2024. It is about one year and three months old. Yet, its shortcomings are still being addressed.

“What we've established from this assessment is that the key challenge with SHA is the sufficiency of the resources that are generated. So far, what we've seen from the study is that the compliance rate is about 18 per cent: the section of SHA registered Kenyans actually paying into the fund,” Mutua added.

The IEA team acknowledged that the whole purpose of health insurance is to enable families to have access to healthcare regardless of their ability to pay cash when an illness occurs.

Their findings also indicate that between January and October 2025, the average monthly collection for SHIF was Sh6.5 billion, compared with the requirement of Sh8.3 billion.

Other key findings from the study include operational and capacity gaps, including sub-optimal digital connectivity, understaffing, especially of specialists, and inadequate health infrastructure, despite heavy investment in technology.

The team also took note of a crisis in claims processing and reimbursements, disrupting facility operations and health service delivery.

“There are gaps for SHIF. There are also gaps for ECCIF. But also PHC. The primary health care fund is very important because it's the gatekeeper in the health system.

“The reason for it or the importance of it being strengthened is that it will ensure that the referral system works as it's supposed to work.

“Because currently it doesn't receive sufficient resources, most of the health care, primary health care facilities, that are level two and level three, particularly in the rural areas, are not well equipped, and do not have sufficient medical personnel.

“So what ends up happening is people bypass and go to other facilities, which disrupts the referral pathway,” Mutua said.

Corruption, it emerged, is also hamstringing SHA’s delivery. For instance, some facilities inflate requisitions:” If services were offered by facility A for 12 patients, you find some cases where a facility is inflating that from 12 to claim for 20,” Mutua said.

On Tuesday, Faith-based health facilities that provide more than 40 per cent of healthcare services in Kenya warned of service cuts and possible closures as delayed reimbursements under the Social Health Insurance Fund (SHIF) and legacy National Hospital Insurance Fund (NHIF) arrears strain operations.

“Faith-based facilities are owed about Sh6 billion under SHIF, with a further Sh4 billion in outstanding NHIF claims,” said Dr Chris Barasa, Secretary General of the Christian Health Association of Kenya (CHAK).

“On paper, SHIF is one of the best models I have seen globally, but the challenge is in the rollout and implementation. Billions of shillings for services already rendered have not been disbursed.”

He said some facilities are already struggling to pay staff, warning that delayed payments threaten access to care for millions of Kenyans.

The funding pressure is compounded by declining donor support, with faith-based organisations increasingly expected to rely on domestic financing. Titus Munene M’maeti, Director of Commercial Services at the Mission for Essential Drugs and Supplies (MEDS), said faith-based providers remain a critical pillar of the health system.

“We complement what the government does, and patients continue to patronise our facilities because what matters is outcomes,” he said.

M’maeti noted that changes in donor-funded programmes, including the US President’s Emergency Plan for AIDS Relief (PEPFAR), have heightened the need for stronger government-to-government engagement, adding that the consortium supports healthcare delivery across more than 1,200 facilities nationwide.

Bishop John Warari of the Inter-Religious Council of Kenya (IRCK) said faith-based institutions are deeply embedded in communities, particularly in remote areas, but cannot sustain services without predictable financing.

“Anywhere you go in this country, even in very remote places, you will find a faith-based facility,” he said. “We have local presence and community trust, but we cannot do this alone.”

Imelda Namai of the National Council of Churches of Kenya (NCCK) said the faith community remains ready to work with the government to stabilise the sector. “The faith community in Kenya is ready to strengthen partnership and collaboration so that communities can continue receiving affordable, quality healthcare,” she said.