Hospitals warn SHA’s secretive reimbursement model could hurt healthcare quality
Medical Services Principal Secretary Harry Kimtai dismissed claims of secrecy, assuring that the government is implementing safeguards to prevent abuse of the system.
Private and rural hospitals have raised concerns over a new reimbursement model introduced by the Social Health Authority (SHA), dubbed the disease weights model, warning that its lack of transparency could lead to financial instability and compromised healthcare services.
Through the Rural-Urban Private Hospitals Association (Rupha), healthcare providers are demanding full disclosure of the formula used to determine reimbursements for outpatient treatments. They argue that the undisclosed model gives SHA unchecked power to arbitrarily adjust prices, making it difficult for hospitals to budget and sustain operations.
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“If the formula remains undisclosed, it can be altered at any time, meaning reimbursements could fluctuate unpredictably. Providers may be forced to prioritize treating conditions that yield higher returns while neglecting others,” Rupha chairman Brian Lishenga warned.
The disease weights model, which applies only to outpatient treatments under Primary Health Care, excludes inpatient services and chronic conditions such as cancer and kidney disease.
Lishenga highlighted a major concern, explaining, “For instance, if I treat a patient for malaria and pneumonia in the outpatient department, then log the claims in the system, SHA will not pay me based on the claim but rather use their formula to determine the reimbursement.”
He cautioned that this could result in hospitals prioritising certain conditions to maximise reimbursement, ultimately affecting the quality of healthcare.
“Care will be expensive because, for those conditions that do not offer providers financial returns, where will those patients go for treatment?” he posed.
“Assume pneumonia fetches me more money than malaria, then the probability that I will concentrate on pneumonia cases is very high since I am not getting any return on malaria. This will reduce the quality of healthcare that Kenyans are getting. I wonder why the government decided to go that route with the healthcare system,” Lishenga added.
Dismissed claims
However, Medical Services Principal Secretary Harry Kimtai dismissed claims of secrecy, assuring that the government is implementing safeguards to prevent abuse of the system.
“It is not that we are keeping this a secret. We just do not want a repeat of what happened with NHIF, where hospitals lodged claims for services they did not offer and reaped from the authority. We are just taking precautions; this is not about punishing hospital owners,” Kimtai said.
He explained that each disease has a standard weight that applies uniformly across all facilities.
“No facility is going to earn more for treating disease X than another. Let us work with this for the betterment of Kenyans. We are too focused on what we get instead of concentrating on services,” he said.
Beyond the reimbursement model concerns, private hospitals are also grappling with outstanding payments from the government. Lishenga noted that SHA owes hospitals Sh30 billion in unpaid claims, some dating back to the defunct National Health Insurance Fund (NHIF), which SHA replaced.
The government, however, disputes this figure. It maintains that it only owes hospitals about Sh9 billion, having already paid Sh10 billion last year, which it says covers half of the undisputed claims.
Previously, under NHIF, healthcare providers were reimbursed based on the actual costs incurred during treatment, allowing for predictable payments.
With the new model in place, hospitals fear the financial uncertainty could impact service delivery and healthcare access for Kenyans.
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