Revealed: How ghost hospitals are paid billions as real ones denied cash

The Ministry of Health is once again under scrutiny after revelations that ghost hospitals received payouts from the Social Health Authority (SHA).

The scandal has heightened animosity between hospitals and the ministry, as Kenyans demand transparency and accountability from the new health scheme, which replaced the National Health Insurance Fund (NHIF).

Private hospitals, under the umbrella of the Rural and Urban Private Hospitals Association of Kenya (RUPHA), now allege that influential individuals are hand-picking which facilities receive claim payments and determining how much they are paid.

In an interview with The Standard, the association’s chairperson, Brian Lishenga, accused SHA leadership of favouring politically connected players, with payments going to the highest bidder.

He said this undermines the government’s much-touted digital superhighway, as claims are not processed fairly or equitably.

According to Dr Lishenga, billions of shillings have been irregularly paid to ghost hospitals, raising questions about the credibility of Kenya’s new universal health scheme.

“It is strange that SHA would suggest that human interference resulted in some facilities being paid.

‘‘Payments are made to those who are politically right and connected, and in some cases to the highest bidder,” said Lishenga.

He said claims worth billions of shillings from private hospitals are reportedly held under “review” or outright rejected, a situation RUPHA says is designed to protect certain vendors under the government’s National Equipment Service Project.

Currently, about 600 facilities are said to have unpaid claims, with arrears for surgical procedures dating back to November 2023.

“As of this week, total claims submitted stand at Sh93.7 billion. Approved claims are Sh90 billion, but SHA has only paid Sh15 billion. The outstanding liability has surpassed the historical debt left by NHIF,” said Lishenga.

RUPHA cited the case of Nyandiwa Dispensary in Homa Bay County, which received Sh19.9 million despite not being functional, a payment that has raised uproar among Kenyans.

In a quick response through a press release, SHA Chief Executive Officer Mercy Mwangangi defended the payment.

She explained that Nyandiwa had been operational since the 1970s and had received Sh751,504 under primary healthcare and Sh82,080,706 under the Social Health Insurance Fund (SHIF).

According to Dr Mwangangi, the facility was elevated to a Level 4 dispensary and had missed payments spanning six months.

But infuriated Kenyans online have flagged several hospitals for receiving payments from SHA despite not offering the services listed by the Ministry of Health.

Apart from Nyandiwa, a Level 3 hospital in Homa Bay is also reported to have received Sh6.8 million in June.

Another facility, located at the Ethiopian border, received Sh6 million in June and Sh1 million in May

Waudo Siganga, an angered Kenyan, claimed the facility is non-existent.

“According to the ministry, it’s listed as a nursing home with more than 34 beds and classified as Level 3, but in reality, it doesn’t exist,” said Siganga.

In Garissa County, a facility in Modogashe was also paid Sh6.8 million in June, despite operating out of a single room.

Ministry records, however, indicate it has 20 inpatient beds, including 15 general beds, five maternity beds, and two emergency casualty beds. “These are records from the Ministry of Health. Now, based on the picture above, can 20 beds fit in one shop-sized room? They are looting us,” a Kenyan questioned on X.

Another facility was flagged in rural Mandera, which reportedly received Sh5.53 million in June and an additional Sh1.5 million in May.

RUPHA warned that the combined debt of SHA and NHIF now stands at Sh73 billion, a level they say threatens the entire health sector with collapse.

The association is calling for the reinstatement of a flat-rate contribution system that was used under NHIF, allowing non-salaried Kenyans to pay as little as Sh300 per month.

According to RUPHA, the current model of annual premiums for informal workers is unsustainable.