Kenyatta National Hospital has been left carrying losses of Sh678.4 million, with the Auditor General warning that underpriced health schemes and stalled construction projects are draining the country’s largest referral facility.
Auditor General Nancy Gathungu, in her report for the year ending June 2024, disclosed that KNH continued to absorb heavy costs from contracts signed with the now-defunct National Health Insurance Fund (NHIF) and the Linda Mama programme.
The NHIF alone accounted for Sh459.2 million in deficits, while maternity care reimbursements under Linda Mama contributed Sh219.2 million.
The audit traced a sharp 17 per cent rise in NHIF-related losses, climbing from Sh379.1 million the year before, despite renegotiations that came into force in July 2022.
Although the agreement expanded the number of claimable services, KNH still found itself losing nearly half a billion shillings every year.
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“The NHIF loss arises where the medical cost incurred by a patient who is a contributor is greater than the rebate reimbursed by the fund, based on the existing medical services contract," the report noted.
"In the circumstances, the hospital continues to bear the losses unless the NHIF reimbursable amounts are reviewed upwards.”
Losses tied to Linda Mama were also rising, up by Sh29 million compared to the previous year’s Sh190.1 million.
The programme pays the hospital Sh17,500 for every delivery, but the audit observed that cases requiring critical or neonatal care often exceed Sh100,000.
A policy adjustment in 2017 allowed KNH to claim an additional Sh4,000 per day when complications occur, but the relief remained inadequate.
“In the circumstances, the hospital continues to bear the losses arising from free maternity programmes unless the tariffs are reviewed upwards,” the report stated.
Away from healthcare contracts, Gathungu pointed to stalled capital projects that have locked up billions of shillings.
The Paediatrics’ Emergency and Burns Management Centre, budgeted at Sh2.99 billion, had escalated by Sh435 million to Sh3.4 billion due to delays that attracted interest charges.
Despite financing from a Sh1.2 billion development loan and Sh1.7 billion from the government, the project, expected to be finished in August 2020, is still incomplete.
“In the circumstances, value for money on amounts spent on the construction of the paediatric emergency and burns management centre could not be confirmed,” Gathungu cautioned.
The audit also flagged the Sh365.7 million Medical Oxygen Generating Plant. Commissioned in May 2022 and due for completion six months later, the facility was still unfinished by December 2024.
Gathungu reported that the contractor’s advance payment guarantee and performance bond had expired in October 2023 without evidence of renewal, a breach of procurement law requiring proper monitoring of such contracts.
The report paints a picture of a hospital grappling not only with underfunded care packages but also with long-delayed projects, leaving questions over how effectively public resources meant for health services are being utilised
