Kenya’s leading referral hospitals are grappling with massive supplier debts amounting to billions of shillings, raising fears of possible disruption of services.
An audit report shows that three top-level facilities; Moi Teaching and Referral Hospital (MTRH), Kenyatta National Hospital (KNH), and Kenyatta University Teaching, Referral and Research Hospital (KUTRRH) — accounted for more than half of the Sh14.1 billion owed by public hospitals by June 2024.
The findings by Auditor-General Nancy Gathungu indicate that the three level six hospitals alone carried debts of Sh7.4 billion, a figure that reflects the financial strain facing the country’s largest referral centres.
Out of the total debt, MTRH topped the list with Sh3.09 billion, translating to about 22 percent of what all 250 hospitals surveyed collectively owed. KNH followed with Sh2.39 billion, while KUTRRH’s arrears stood at Sh1.9 billion.
“The amount of Sh14,103,500,087 comprised Sh7,401,468,215 relating to Level 6 hospitals, Sh3,223,219,534 relating to Level 5 hospitals and Sh3,478,812,339 relating to Level 4 Hospitals,” Auditor-General Nancy Gathungu said.
The audit warned that the mounting debts could cripple health services if suppliers choose to withhold essential goods and medicines.
“Failure to settle payables may result in suppliers withholding the supply of goods and pharmaceutical items and hence adversely affecting service delivery,” said Gathungu.
The three institutions serve a critical role as the highest-level referral hospitals in Kenya, handling thousands of patients every year, many of whom are referred from lower-tier hospitals.
KNH alone attends to over 1.7 million patients annually, underscoring the national risk if their operations were interrupted.
While MTRH carried the heaviest debt burden among level six hospitals, the audit showed that Nakuru County Referral Hospital owed Sh699.5 million, the highest among level five hospitals.
At level four, Naivasha County Referral Hospital had the biggest arrears at Sh511.6 million. In total, the audit covered three level six hospitals, 14 level five facilities, and 187 level four institutions.
Alongside unpaid debts, hospitals were also flagged for weak revenue collection systems. The Auditor-General found that 223 hospitals failed to collect Sh11.35 billion in revenue during the year.
The breakdown showed Sh5.87 billion uncollected in level six hospitals, Sh2.65 billion in level five, and Sh2.83 billion in level four facilities. MTRH once again recorded the highest amount of uncollected revenue at Sh4.2 billion, followed by KUTRRH at Sh1.65 billion.
The audit report has amplified questions about the financial management of public health facilities, with concerns that unless addressed, the growing debts and poor revenue collection could severely undermine service delivery across the country.
