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Kenya: Private healthcare requires intensive care and better regulation

By Morris Kiruga, in Nairobi
Posted on Friday, 7 February 2020 11:01

The business model of private hospitals in Nairobi is coming under scrutiny. REUTERS/Baz Ratner

Private healthcare facilities in Kenya are under scrutiny after local Twitter users detailed multiple instances of systemic exploitation.

Screenshots leaked on Twitter of a WhatsApp workgroup from the Nairobi Women’s Hospital, a private equity fund-owned enterprise, showed executives pushing their staff to drive up admission numbers and lock discharges.

The Nairobi Women’s Hospital, founded in the early 2000s by a Kenyan doctor, was bought by Abraaj Group and Swedfund in the early 2010s. The US-based PE fund TPG Growth acquired it and Abraaj’s other assets (including the coffee chain Java House) after Abraaj’s collapse in 2018.

In Kenya, these assets included 18 clinics and 10 hospitals, which are now owned by TPG’s Evercare Health Fund.

The fund’s investors include the Bill & Melinda Gates Foundation and the World Bank’s International Finance Corporation.

  • Following the scandal, the insurance industry is turning its back on the hospital, with health insurers such as Old Mutual, Britam and Jubilee saying they will not honour future bills from the Nairobi Women’s Hospital.
  • The Kenyan Revenue Authority is also suspending the hospital from its list of approved healthcare providers.

On Monday, the hospital responded in an official statement, saying,

  • “Although we don’t believe this is the case, and in fact it is antithetical to our foundational principles, we take these allegations very seriously and are conducting an internal review as well as cooperating with the Kenya Medical Practitioners and Dentist Council as they carry out their independent review.”

Why the fuss?

The leaked screenshots, mainly from 2018, reveal Nairobi Women’s Hospital’s CEO, Dr Felix Wanjala, and his COO, setting hourly and daily targets for their staff at a branch three hours from Nairobi.

In one message, the CEO tells someone to “urgently fix” discharges, because “yesterday you discharged 14, today planned 12” and this is “not sustainable”.

In another, he writes after listing the current statistics, “Very slow movement. Let’s walk patient’s journey. Keep pushing for more ip numbers…harder keep calling for referrals….keep occupancy locked.” And then he adds, “Get us 4 more [presumably admissions] by 8 pm.”

While the leaks show a culture of systemic exploitation at one hospital chain, they are emblematic of the result of heavy unregulated investment into Kenya’s private healthcare sector.

In addition to gaming admissions and discharges, Kenyans described multiple scenarios where they were made to do unnecessary tests as well as prescribed expensive, unnecessary medications.

“The targets were achieved through tests and they weren’t only encouraged but ordered to give as many tests as possible,” another Twitter user said, describing his friend’s experience as staff at another Nairobi healthcare facility. “The person with the most sales each month would be commended.”

As part of the East African country’s Vision 2030, the plan to improve healthcare was to systematically reduce the government’s role in service provision while encouraging private sector investments.

“Some of the key features of those plans include social health insurance to increase access to health care, a reduced role for the Ministry of Health in service delivery, more delegation of authority to provincial and district level, and promoting more public-private partnerships (PPPs),” the World Bank wrote in an assessment in 2010.

While there are fewer privately-owned health facilities than public (22.3% run privately as opposed to 48.5% by the government), they have been growing over the last decade as the government pulls back.

Failure of regulation

The funding is not a bad thing per se: the private sector healthcare has been among the fastest-growing employers and contributors to GDP in Kenya.

It does ask questions of the regulator, whose job it is to enforce standards.

While investment into facilities to provide services is extensive, there has not been commensurate changes in the country’s health care systems and laws.

A November 2019 study found most top executives of Kenyan hospitals are male, and do not have a proper understanding of health provision in the digital age.

The lack of a framework for this rapid expansion, which would include expanding patient protection, data privacy, and such laws have only started in the recent past.

Without these structures, private healthcare has been primarily profit-driven, leading to what several professionals told The Africa Report are “unhealthy work environments” that resemble “trading floors”.

Even Chinese migrants in Kenya fear the public healthcare system and would rather seek help back home because of the high cost of private healthcare.

In late 2019, Nairobi legislator Esther Passaris was criticised after she travelled to India for medical care, saying there were no medical experts in Kenya.

  • “Most of our medical consultants can compete with the best in the world but we choose not to acknowledge them due to a misplaced and ridiculous class system,” wrote a legal researcher in an opinion piece.

Bottom line: Regulators have promised to investigate the hospitals for exploitation, among other things, but Kenya still needs to update its laws and systems to handle the dynamics and downsides of being part of global commerce.

It, and other African countries, could learn from Europe and the US, which passed laws and policies to control the behaviour of private equity firms after the 2008 financial crisis. And private equity healthcare fund investors need to do more to control the corporate behaviour of the funds with which they work.

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