National hospital changes its face to shore up revenue from big companies

Kenyatta National Hospital (KNH) has invested in new income-generating projects as it seeks to cut reliance on Treasury.

The referral hospital is seeking Sh6.14 billion from Treasury next financial year according to the Medium-Term Expenditure Framework on Health Sector 2012/13.

The public hospital, previously depicted as a facility for poor patients, has made headlines for reasons such as congested wards, non-payment of medical bills by patients and lack of medical equipment, is now seeking to shed its old image with a spruced-up corporate centre for high-end outpatient clients.

For Sh1,000 consultation fee or a medical insurance card, a corporate client can get services akin to those offered in private hospitals like Aga Khan University Hospital, Nairobi Hospital, Mater or their satellite clinics which charge on average Sh2,000 consultation fee.

This is more than double the Sh450 that KNH charges for consultation in the general outpatient unit.

The new corporate centre offers specialised high-quality treatment as the hospital eyes higher revenue amid low earnings and pressure from the government to be self-reliant.

“We find ourselves in the shoes of public universities when the government cut their funding, forcing them to opt for parallel programmes,” said KNH chief executive Richard Lesiyampe.

Mr Lesiyampe said the hospital gets an annual revenue of Sh1.8 billion, while the hospital’s expenses run to Sh6.8 billion per year. This leaves the largest referral hospital in the region with a budget deficit of Sh5 billion a year.

KNH is now investing in modern equipment such as CT scanners and MRI machines that are used for a specialised type of X-ray diagnosis and are upgrading their cardiac lab to match private outfits.

“We have also invested in a system that will help to manufacture our own intravenous fluids that we otherwise used to buy from outside, and this we expect will save us a lot of money,” said Morris Karaine, the deputy chief administrative officer and project coordinator.

The one-stop medical centre is equipped with doctors and specialists to review patients who will require further assessment and management pointing to the hospital’s commitment to cater to high-end clientele. The centre is also linked to the 225 bed KNH private wing for patients who require admission. Corporate inpatient clients will pay Sh3,000 per night.

Private hospitals have increased their charges by up to 15 per cent, citing high cost of drugs, food and other supplies. For inpatients, the cheapest bed rates in the private wing in KNH rose from Sh1,950 per night to Sh3,000 as Nairobi Hospital increased its general adult ward bed costs to Sh7,600 from Sh6,820.

Consultation fees and bed charges have increased by the highest margins – 11 per cent to take 18 per cent of the total outpatient spend in 2010 – according to data from AoN Kenya, an insurance brokerage and consultancy firm.

For instance, consultation fees at Aga Khan rose to Sh1,500 from Sh1,300 while KNH increased the fee to Sh550 from Sh350.

KNH attributed the rise to the high cost of feeding the 2,000 inpatients which has increased by up to 50 per cent in the past one year.
“The cost of running the hospital has risen, leaving us with a financing gap,” said the chief executive.