Will the new CEO heal Nairobi Hospital?

Nairobi Hospital Gate 2 entrance. [Elvis Ogina, Standard]

Mr James Nyamongo’s voice is firm, authoritative and marries well with his towering figure.

He easily laughs at his own musings, maybe as a way of acknowledging the wrongs at The Nairobi Hospital, which he now seeks to right. 

“If you do not have a financial policy, what do you expect?” poses Dr Nyamongo about the governance and financial woes that have bedevilled one of the region’s premier private hospitals.

During a recent roundtable with journalists at the hospital, he acknowledged the enormity of the task at hand in his new role as chief executive. 

“This is one area this institution has suffered, and it has been in the media. It is why I came here,” he said.

He was initially appointed acting CEO on December 7, 2020 for a six-month probationary term before being confirmed on June 17 last year amid a raging court battle with his predecessor, Dr Allan Pamba. 

The board fired Dr Pamba after just six months, following accusations of not crafting a performance enhancement plan. He had taken over as a substantive CEO after the acrimonious removal of Dr Gordon Odundo.

Dr Odundo’s firing triggered leadership wrangles at the health facility, the genesis of which came after the more than 230 members of the Kenya Hospital Association (KHA) — which owns the facility — petitioned the removal of eight directors.

Dr Odundo was sent on a 90-day compulsory leave on December 15, 2018, with the board saying the decision was to “allow completion of an ongoing forensic audit,” which revealed tender rigging, stalled projects and irregular variations of projects.

These included the construction of a 12-storey building, a convention centre with a 400-seat auditorium and one of the region’s biggest laundries.

The wrangles have tainted the image of one of the region’s ultramodern health facilities, presenting Dr Nyamongo with the arduous task of cleaning it up. 

In his words, The Nairobi Hospital was in crisis and looking for direction because of its culture of “business as usual.” It was also an institution without systems, which explains its rapid fall from grace at the height of the leadership wrangles. To get things back on track, Dr Nyamongo said he had to change not just the culture but also the faces that represent the hospital.

During the meeting, he introduced the new top management team, among them Director of Strategy and Innovation Nicodemus Odongo, who was at one time the acting CEO at the National Hospital Insurance Fund (NHIF), and Finance Director Samson Mwangi.

Dr Nyamongo has also brought on board an expert from the multinational audit firm PricewaterhouseCoopers (PwC) who will be in charge of business risk even as he admitted that the position of supply chain director has been challenging to fill.

This, he said, is a result of the bad reputation the institution has suffered in the wake of the leadership disputes.

“Whenever we get the best person, they say ‘this is not a place to stay’,” he said.

Nairobi Hospital CEO James Nyamongo. March 2022. [David Gichuru, Standard]

But it is not just the top management that has been replaced.

Reports indicate more than 200 junior staff have also been shown the door as part of the regime change at the facility. 

Dr Nyamongo explained that the hospital had to let go of all the staff whose skills were not aligned to what the facility wants to achieve business-wise.

But those who were left have seen their salaries reviewed upwards.

“Our staff were poorly paid. Nurses were migrating to the United Kingdom and the United States,” he said.

When he took over, he said the hospital had cash flow challenges with debts running into Sh3.2 billion. This has since been slashed to Sh2.2 billion.

“Our suppliers used to take 150 days to get paid. You provide a service and wait for six months! Now the waiting period is 60 days,” said Nyamongo.

He noted that the huge debt burden was partly due to poor record-keeping.

According to the hospital’s financial reports, the 2019 revenue and debt position was restated by Sh216 million, resulting from a data clean-up exercise undertaken in the year. Over the period, revenue reduced by 10 per cent to Sh9.9 billion in 2020 from Sh11 billion previously.

The report cites pharmacy, laboratory, bed fees, surgical income and radiology as the key contributors to revenue.

Nyamongo said he has prioritised growing the hospital’s core business – healthcare provision.

He admits that previous management might have erred in the direction they wanted the business to go.  

Some of these errors were investments worth billions of shillings in equipment and facilities that do not reflect the core business of the hospital. For instance, instead of building facilities such as conference halls, he said, the money should have gone to health systems.

Just recently, The Nairobi Hospital announced that it will be offering laundry services to the public, which amused many Kenyans who wondered why a hospital would engage in such business lines.

“I sometimes wonder why this machine was bought for this institution. The capacity is so big,” he said.

But Dr Nyamongo said the institution is also keen on diversifying its revenue streams.

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