A new survey by Kenya’s healthcare provider associations shows widespread distress among hospitals one year after the launch of the Social Health Authority (SHA).
The report released on Monday reveals delayed payments, digital failures, and cash shortages forcing facilities to cut services, lay off staff, and borrow heavily to stay afloat.
A new survey commissioned by the Kenya Healthcare Federation (KHF), Kenya Association of Private Hospitals (KAPH), the Rural and Urban Private Hospitals Association of Kenya (RUPHA), and the Christian Health Association of Kenya (CHAK) paints a grim picture of how providers are struggling to adapt to the replacement of the National Hospital Insurance Fund (NHIF) by SHA.
According to the report, 81% of facilities are dissatisfied with SHA’s digital integration, while 92% reported frequent system downtimes that delayed claims processing.
The result has been massive payment backlogs, with 43% of facilities waiting over three months for approvals and another 40% receiving approvals within two months.
Over half of the hospitals, 52%, now operate on credit-only terms for SHA patients, a practice that has eroded liquidity and forced many to seek loans to sustain operations.
The financial impact is dire. 78% of facilities reported borrowing to bridge cash flow gaps, with more than a third taking loans exceeding Sh3 million.
Nearly 53% say they have less than three months of operating runway, while 50% have faced threats of asset auctions or repossession.
Delayed payments have translated into painful operational consequences.
90% of hospitals have delayed salaries, 93% have postponed supplier payments, and 75% have laid off staff, with nurses being the hardest hit.
Almost half of the affected facilities report salary arrears of three months or more.
The ripple effects have been severe, 76% reduced services, 55% closed certain units, and 7% shut down entirely.
Outpatient clinics, maternity wards, and theatres were the most affected, accounting for over two-thirds of all closures.
The survey also highlights the unresolved burden of legacy NHIF arrears, with 73% of providers still owed reimbursements, and 85% describing settlement as a high priority.
Many respondents said the SHA had worsened their situation compared to the NHIF era, with 74% rating SHA’s performance as worse and only 11% saying it was better.
The report identifies Level 3 facilities, such as health centres and mission hospitals as bearing the “breadth pressure,” often reducing services and struggling with prolonged salary delays.
Level 4 hospitals, meanwhile, face “severity pressure,” carrying larger debts and heavier layoffs among critical staff.
Private hospitals appear to be the most exposed, with 84% borrowing to cover costs and nearly half considering closure.
By contrast, public facilities were somewhat shielded but represented a smaller share of the sample.
To restore stability, the report recommends several urgent interventions, including approving simple claims within 14 days and paying verified amounts within a week, improving system uptime to at least 90% weekly to reduce repeat documentation and errors, clearing verified NHIF arrears within 90 days on a public schedule, providing temporary financial protection such as short-term loans against verified claims to prevent hospital closures and to target support by facility level, prioritising liquidity for small hospitals and staff protection for larger ones.