Why health scheme is on its deathbed

Social Health Authority building in Nairobi. [Wilberforce Okwiri, Standard] Barely a year since its implementation, the Social Health Authority (SHA) is already facing an existential crisis, amid reports that it is struggling to stay afloat. The scheme, which central to President William Ruto's Universal Health Coverage (UHC) agenda, is collecting significantly less revenue than anticipated and is failing to meet patient needs or settle hospital bills. Many health facilities are now unable to pay staff, restock medicine, or keep their doors open. Insiders at SHA warn that the scheme is spending far more than it collects. A senior SHA official disclosed the authority currently collects about Sh6.7 billion monthly, translating to roughly Sh80 billion annually. However, it spends approximately Sh8.7 billion each month, or Sh104.4 billion per year, leaving a worrying funding gap. "We are basically spending more than we are collecting," the official admitted. "When the loss ratio becomes too high within a section of the population, it becomes problematic." The Rural Private Hospitals Association of Kenya (RUPHA) has cautioned that unless collections improve, the scheme could collapse. "Kenyans are told to register and get free services. It sounds good and may win elections, but if things continue as they are, SHA could collapse within three to four months," said RUPHA chair Dr Brian Lishenga. Under the Kenya Kwanza health plan, the government is supposed to pay premiums for vulnerable populations. However, this allocation has been inadequate, leaving public hospitals burdened by arrears. Insiders warn that unless the state mobilises additional resources to cover the poor, the risk pool will remain too shallow to sustain the scheme. "The scope of cover is too broad to be funded with the limited resources available," the SHA official said. A senior Ministry of Health official told The Standard that while contributions from the formal sector-through the mandatory 2.75 per cent salary deduction-have remained consistent, this group represents only 17 per cent of the population. "Can 17 per cent sustain the rest?" the official posed. Multiple factors have driven SHA's ballooning expenditure. The benefit package was expanded, allowing patients to access more services per person. In addition, a mandatory waiting period before new members could access benefits was removed, leading to immediate, often high-cost claims. "If someone contributes Sh10,000 and undergoes a knee replacement worth Sh300,000, how sustainable is that?" Premium collections have also remained low, with many Kenyans reluctant to contribute, leaving hospitals overwhelmed by unpaid claims. Dr Lishenga attributes SHA's problems to rising liabilities, financially distressed facilities, and meagre contributions from the informal sector. The government projected it would raise Sh160 billion annually through SHA: Sh38 billion from salaried workers and Sh122 billion from the informal sector. Of this, Sh70 billion was earmarked for the Emergency, Chronic and Critical Illness (ECCI) Fund and Sh45 billion for the Public Healthcare Fund. Populist narrative In contrast, NHIF collected Sh82.1 billion in 2022/23 and Sh80 billion in 2023/24. Between October 2024 and July 2025, SHA collected only Sh45 billion, just over half its annual target. SHA operates three funds: the Social Health Insurance Fund (SHIF), ECCI, and the Public Health Care (PHC) Fund. Contributions of 2.75 per cent go to SHIF, while ECCI and PHC rely on Treasury allocations. The total amount required to fully finance UHC is estimated at Sh275 billion. Dr Lishenga says the government must move from focus on registration to encouraging premium payment. "We must move away from the populist narrative that UHC is free. Kenyans should be encouraged to register and contribute. Without contributions, the system cannot be financially sustainable," he said. He added that if eight to 10 million informal workers contributed Sh300 to Sh400 monthly-either as daily or weekly micro-payments-it would raise Sh2.4 to Sh4 billion per month, enough to plug the deficit if disbursements were timely and transparent. The Social Health Insurance Act 2023 caps premiums at 2.75 per cent of income for all Kenyans, both salaried and non-salaried. Unlike NHIF, which had a premium ceiling of Sh1,700, SHA has no upper limit. For non-salaried Kenyans, means testing determines contribution rates. The lowest premium is Sh300 per month. Despite these reforms, actual collections remain poor. Out of 26 million registered members, only 4.5 million are actively contributing, bringing in just Sh5.4 billion monthly against claims of Sh8.7 billion. Hospitals are owed Sh43 billion under SHA, with Sh33 billion carried over from NHIF, pushing total pending claims beyond Sh76 billion. A Standard investigation across hospitals found facilities countrywide struggling to stay afloat. Some are unable to buy medicine, pay staff, or keep their doors open. At Mutuini Sub-County Hospital in Dagoretti South, Nairobi, unpaid claims running into millions have plunged the facility into debt. SHA documents seen by The Standard show Mutuini is owed Sh45 million from NHIF and Sh22 million from SHA, totalling Sh67 million. Over the last three months, the facility submitted 993 claims worth Sh14.7 million, but only 28 were approved, receiving Sh233,200. "With zero payments, services are suffering. Suppliers are pulling out, and we're unable to pay staff on time," said CEO Martin Wafula. With 461 staff-358 from the county and 103 under the hospital payroll-sustainability is at risk. "How do you run a hospital with Sh67 million in debt? I dread answering supplier calls," Wafula added. "SHA is a good house with a leaking roof. If reimbursements were timely and full, we could expand services." This situation is mirrored across the country. Nairobi County hospitals alone are owed Sh500 million. Appearing before the Nairobi County Assembly, Chief Officer of Public Health Tom Nyakaba said: "We are running facilities with no money. We are offering no service. Nairobi facilities are collapsing because SHA is not reimbursing them." In addition, the defunct NHIF still owes Nairobi hospitals Sh800 million-despite President Ruto's March directive that NHIF debts under Sh10 million be cleared. Top referral hospitals like Kenyatta National Hospital (KNH) and Moi Teaching and Referral Hospital (MTRH) are owed over Sh3 billion. Dr Lishenga warns that failure to support lower-level hospitals (Levels 2, 3, and 4) is pushing patients into overburdened referral centres. Patients bear the brunt For 71-year-old Gatamo Waigwa from Nyeri County, the SHA crisis is painfully personal. Diagnosed with prostate cancer in 2020, he relied on NHIF to cover treatment costs. The previous scheme gave him up to Sh600,000 annually for drugs, injections, and imaging. Under SHA, this has been cut to Sh567,000-already exhausted due to soaring cancer treatment costs. On 9 September, Waigwa spent Sh45,800 on abiraterone, a critical cancer drug. His quarterly injection costs Sh26,000, not including scans and tests. "I now need Sh71,000 every month, but I have no job," he said."It is unfair that after paying my premiums, I still cannot get treatment."Waigwa says he pays most of his medical bills out-of-pocket. SHA currently allocates Sh400,000 annually for chronic and critical care, plus Sh150,000 under the Emergency and Critical Illness Fund-far below what many cancer patients require. "The government knows cancer patients like me need at least Sh600,000. NHIF covered that. SHA does not," Waigwa said. His is the story of thousands of patients left behind by a system meant to ensure access to affordable care. Of SHA's disbursed funds, 40 per cent goes to specialised services. Kenya spent Sh7.7 billion on orthopaedic surgeries-equal to the entire primary healthcare budget. "We are spending disproportionately on a few hospitals," Dr Lishenga observed. He also questioned whether the government properly costed healthcare services. For instance, current tariffs allocate just Sh975 annually per household for outpatient care-a figure that cannot realistically cover consultations, lab tests, and treatment. Optical services are capped at Sh1,000 per household, with eyeglass prescriptions limited to Sh950. In many hospitals, these services are unavailable. Under the Social Health Insurance Act 2023, outpatient services are to be offered at Levels 2, 3, and 4 hospitals, and include consultations, lab tests, X-rays, ultrasounds, prescriptions, drug dispensing, and more. Despite growing concerns, top SHA officials have remained silent. Efforts by The Standard to reach CEO Dr Mercy Mwangangi were unsuccessful. She neither picked calls nor responded to messages. SHA chairperson Abdi Mohammed and PS for Medical Services Dr Ouma Oluga were also contacted. "Sorry, I am unable to take your call now. Can I call you back?" Dr Mohammed replied-repeating a message often sent.

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