Ideas & Debate

Private hospitals improve patients’ access to care


Most of the private hospitals in Kenya are run on a not-for -profit-basis indicating that there is no dividend payout. FILE PHOTO | NMG

The risk of a child dying before the age of five years in Africa is still eight times that of Europe, according to the World Health Organization.

The WHO also informs that global life expectancy at birth is 71 years compared to that of Kenya estimated at between 58 and 62 years.

Kenya has among the highest maternal mortality rates in the world ranging between 250 and 680 (estimated average 488 in 2013) per 100,000 deliveries making Kenya among the top ten countries with the highest maternal mortality rates in the world.

Private hospitals are part of the wider health sector in Kenya. They have worked to increase access to health services among wananchi [the common man]. “Access” includes geographical and financial. Geographic access is about how the patients find their way to the hospital. Distance is a determinant of patient’s choice of hospital.

This is felt more by the elderly and those from rural areas and poorer neighbourhoods. Private hospitals have seen a growth in the physical facilities with expansion of outpatient services thus increasing geographical access through a proliferation of clinics. For example, Aga Khan University Hospital has 42 private outpatient clinics across the country.

This growth in physical facilities has also seen an increase in inpatient bed capacity as apparent in Nairobi Hospital, Avenue Hospital and MP Shah hospital and planned increase at Aga Khan University Hospital in Nairobi and Aga Khan hospitals in Mombasa and Kisumu. The increased bed capacity is accompanied by a rise in facilities with specialised equipment.

This improvement in facilities and equipment is driven by increased demand as well as highly skilled personnel who hitherto were unavailable in Kenya.

Aga Khan University Hospital, Nairobi, now routinely undertakes minimally invasive complex brain surgery without opening up and exposing the entire brain, and heart valve replacement without having to open up the heart.

Minimally evasive gynaecological and general surgery have become so common - that they are now incorporated as part of the standard curricula taught at Aga Khan University’s Medical College in Nairobi. This implies rigorous quality checks (internal and external to the institution) for diagnostic services.

For clinical practices, this means benchmarking services to those of international best practices. This is done through subscribing to international accreditation services such as the Joint Commission International among many others.

Such accreditation services require benchmarking of individual clinician performance to that of peers as well as international standards. All these cost money.

Facility upgrade, capital equipment purchase and maintenance, as well as the remuneration of highly skilled clinical staff, cost a lot of money just as is the case for various aspects of quality control and accreditation.

Most of the private hospitals in Kenya are run on a “not for profit” basis indicating that there is no dividend pay-out; surplus generated is retained for investment and growth and a, a significant portion of the total revenue allocated to welfare.

The law also rightfully obliges hospitals to treat all emergencies irrespective of ability to pay. The government does not reimburse this.

At the Aga Khan University Hospital, about 200 patients were treated last year as an emergency at the Accident and Emergency department without any payment.

READ: Aga Khan University partnership takes health services to EA mothers, children

In private health sector in Kenya where the surplus is usually less than 17 per cent, Aga Khan University Hospital, Nairobi as an illustrative example spends three per cent of the revenue on welfare - which goes to treating patients who cannot afford the services (mainly cancer and cardiac patients) and free medical camps.

An additional 10.5 per cent goes to the cost of training much-needed specialists deployed across the country upon completion of training. About 2.5 per cent further depletes the surplus due to bad debts.

Further, additional 3.5 per cent is used in servicing loans. Thus the net margins in private hospitals, in spite of the perception of being expensive are razor-thin and this reduces operational flexibility.

Thus the only option available is to strive for high operational efficiency. The razor-thin margins are what is used for growth and development.

Putting more pressure, the large private hospitals have components within that are loss making but essential for providing comprehensive service.

Such critical care units include Intensive care units (ICU), Neonatal ICU that are supported by profit centres within the hospital.

It is, therefore, unfair for the government to allow free-standing profit centres such as imaging (x-ray) centres and laboratories that can undercut the diagnostic services of the large hospitals.

The cost structure of the large private hospitals implies that they are unable to compete on the basis of price.

Dr Majid Twahir is Associate Dean, Clinical Affairs and Chief of Staff at Aga Khan University Hospital, Nairobi.