Top hospitals depress patients with increase in medical bills

Top hospitals have increased their charges by up to 15 per cent, adding more financial pressure on families at a time when they are grappling with the erosion of purchasing power.

Kenyatta National Hospital (KNH), Nairobi and the Aga Khan hospitals are some of the health service providers that have increased their bed and consultation charges from this month, citing the rising cost of operations.

“While every effort has been made to rationalise costs, the adverse economic realities have compelled us to adjust our prices upwards by an average of 15.5 per cent on all our services,” said Galeb Gulam, the chief finance officer at the Aga Khan University Hospital (AKUH) in a notice to medical insurance providers.

Executives at KNH and the Nairobi Hospital also attributed the review to rising cost of food, utilities and medical equipment. “Manufacturers and suppliers are yet to reduce the prices of supplies, making us unable to absorb the costs,” said Cleopa Mailu, the chief executive of Nairobi Hospital.

The steep rise in the cost of medical services is also piling pressure on insurance premiums with demands that consumers pay more to access services.

The increase adds to the high cost of food, energy and transport that have been the main drivers of inflation which has climbed from 5.42 per cent in January last year to 18.93 per cent last month. Besides the possibility of locking out low-income earners from accessing quality medical care, the increase in medical charges is expected to take a huge chunk of expenditure from the upper and middle-class families, eroding their purchasing power on discretionary expenses.

It is also expected to put pressure on the earnings of medical insurance providers who collectively posted a loss of Sh529 million in 2010 from Sh235 million in 2009, according to the Association of Kenya Insurers (AKI).

“When hospitals increase their bills, insurance companies cannot raise their premiums immediately, they have to wait for the period when the policy is renewed the following year,” said Ashok Shah, the former chief executive of APA Insurance.

“The insurer, therefore, bears the additional cost.”

Reduced dollar inflows amid rising demand for foreign currency to purchase import goods such as oil, metal and machinery saw the shilling sink to 107 against the dollar last year before recovering to Sh88.

A weak shilling automatically increases the cost of imported medicine and medical equipment that is ultimately passed on to consumers. Kenya imports 60 per cent of its medicines and 90 per cent of medical equipment.

Drugs for treating chronic diseases like hypertension are among those whose prices have been revised with that of Exforge jumping from about Sh6,262 mid 2011 to about 8,349 this year.

Epilepsy patients, who consume Rivotril to manage the condition, saw the cost of the drug surge from about Sh572 to about Sh720 per dose in the same period.

“We reviewed upwards the prices of drugs by seven per cent last year to cover for the weak Kenyan currency,” said Frans Labuschargne, managing director of Bayer East Africa, a German supplier of drugs to local hospitals.

Kenyatta National Hospital said the cost of feeding 2,000 inpatients had increased by up to 50 per cent in the past one year.