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Senate missing the point on hospital parking fee row

By XN Iraki | November 10th 2020 at 08:00:00 GMT +0300

Parking Services director, Frederick Ndunyu oversees a clamp down operation along City hall way. Ndunyu said Nairobi county earns approximately Sh2 million daily from parking revenue. [File, Standard]

A petition in the Senate proposing free parking in hospitals for patients appears a sound humanitarian gesture until it is filtered through economics. 

This petition seems to suggest that its originators do not understand the situation on the ground.  

While hospitals are vilified for charging for parking as an additional revenue stream, county governments in major urban centres and even churches that have big compounds do the same. Just drive along Nyerere road during the working hours. 

Parking is one of the easiest sources of “free money”. The operational costs are almost zero, particularly with automation. Add the fact that there is a serious shortage of parking, particularly in major urban centres.

Apart from airports, where else have you seen a major parking project? The increase in the number of cars seems to have taken authorities by surprise.  

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Any serious economist would ask: How do we ration out the few parking slots?

For starters, we could use the first-come-first-served basis. This is what happens in the city’s parking bays. 

Two, you could use a lottery to assign the slots. We could hold a lottery every day, week or month for those willing to park in specific bays. This would be the fairest method. If you miss out, you wait for the next lottery as is the case with the American green card system.

The third approach would be to buy a parking space. You could lease it if you want.  Noted how the new office and apartment blocks entice us with free parking?  

Fourth, would be to build parking bays and make them free, more like a public good. That would be very expensive. Where do you get all that land? Multi-storeyed parking bays would do, but they would still be expensive. 

The fifth approach would be to leave the service to the laws of economics - supply and demand.

You ration the few parking slots by using price; the price is set in a way that only those who can afford it use their cars.

The owners of the parking bays could keep raising the parking fee until demand falls or their revenue starts going down. 

You see the same pattern when it rains and matatus raise their fare. After a certain price, some commuters prefer to wait until fares normalise.

This is what happens with most products and services provided by the private sector; you charge what the market can bear.  

Why should hospitals be an exception to the laws of economics, yet they have limited parking space? Let’s remember that without charging for parking in hospitals, the slots would be taken over by “joyriders.” Charging parking fees is also about control. 

Think of it, why can’t I take a matatu from MP Shah or the Kenyatta National Hospital to the city centre and avoid paying Sh200 parking fees? If matatu fare is Sh50 two-way, I’d save Sh150. Cumulatively, that’s a lot of money.  

We need to stop seeing the service as idling. I thought finding a convenient place to park makes it easier to do business in urban centres.

Why punish those who bring business and money? When I asked one Kenyan living in California, Muriuki Mukurima, if he pays for parking at Walmart, his reply was: “No! A lot of parking space outside.”   

One supermarket in Westlands pays for your parking if you shop beyond a certain amount. The petition surprised me because it should have focused on hospital medical charges, not parking fees.

A sick person is least bothered by parking. It’s often a very small percentage of the medical bill.  I have scrutinised medical bills and they keep surprising me.  

For starters, you are likely to pay more if insured. The argument is that it takes time for the insurance to settle the bills.

But the other reason, which few hospitals are likely to admit, is that by taking insurance, you signal you are able to pay, no matter the cost. 

Two is the cost of lab tests. Hospitals can demand unnecessary tests which will cost you money.

I once paid Sh600 for prescription drugs after tests worth Sh9,000. As a patient with no medical knowledge, you are unlikely to say no to tests. The medical experts can argue they want to leave nothing to chance, hence a battery of tests. Should the petition not be focusing on such unnecessary tests? 

Three is the cost of inpatient services. How many patients are admitted unnecessarily, with “beds” giving the hospital huge amounts of money, just like parking charges?  

Next time you get a medical bill, go through it, and it will surprise you what you pay for. Covid-19 made the bills more surprising. 

We are not asking the Senate to control prices of medical services, but some regulation would do.

The medical “market” is not efficient. Restrictions like licensing and the rigours of training leaves the supply unmatched with demand, whether it’s ICU nurses or blockbuster drugs under patents.  

One wishes the Senate would focus on fighting for fair pricing of medical services rather than parking in hospitals.

- The writer is an associate professor at the University of Nairobi  

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