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Covid cuts Sh1bn sales at Nairobi Hospital

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The Nairobi Hospital entrance. The hospital said it has been struggling financially like other institutions hit by the Covid-19 pandemic. FILE PHOTO | NMG

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Summary

  • The hospital’s revenue dipped from Sh11.1 billion in 2019 to Sh9.95 billion in the year to December.
  • Lower hospital visits translated to reduced revenues for health facilities, prompting some medical institutions to implement layoffs and salary cuts.

Nairobi Hospital revenue dropped by Sh1.15 billion last year in the wake of Covid-19 pandemic that cut hospital visits and lab income, keeping the premier facility in losses.

The hospital’s revenue dipped from Sh11.1 billion in 2019 to Sh9.95 billion in the year to December— the lowest in four years as patients avoided hospitals for fear of contracting the infectious virus.

Lower hospital visits translated to reduced revenues for health facilities, prompting some medical institutions to implement layoffs and salary cuts.

The extent of the low hospital visits reflected in the earnings of medical insurers who posted a record Sh1.3 billion in underwriting profits last year on slowed healthcare claim.

Nairobi Hospital cut losses to Sh561 million from Sh1.04 billion in 2019 when it dipped into loss after posting a debt write off of Sh1 billion.

"The hospital’s occupancy declined, as patients avoided the perceived Covid-19 prone zones," said James Nyamongo, the Nairobi hospital CEO.

Hospital admissions fell 23 percent to 14,477 patients while accident and emergency cases dropped by 35 per cent to 111,571 — both being lows of over five years.

REVENUE DIP

This prompted a dip in revenues from lab tests to theatre and cancer care.

The hospital also halted day surgeries, which caused a 32 percent decline in the revenue stream to Sh709 million.

The premier hospital generates 54.2 percent of its revenues or Sh5.1 billion from selling medicines and laboratory fees.

Nairobi Hospital said even though the net financial position improved in 2020 over 2019, the hospital’s source market in Kenya and the neighbouring countries remain fragile.

Kenya reported the first Covid-19 case on March 13, prompting the State to impose measures such as a dusk-to-dawn curfew, social distancing and work-from-home calls.

The Nairobi Hospital has laid off more than 200 workers in a move aimed at cutting costs and clearing out staff implicated in a recent graft audit.

The losses comes as the hospital recovers from boardroom fights over tenders that saw the ouster of former chief executive officer Allan Pamba.

Dr Pamba was fired in October, just six months after his appointment, on claims that he had failed to provide a performance improvement plan for the hospital—an assertion the deposed CEO denies.

He instead blamed his ouster on a fallout over his alleged refusal to prioritise the award of a fully funded Sh118 million tender for the installation of a new security system for the hospital to Opticom Kenya despite the existence of an efficiently functioning one.

Mr Nyamongo assumed office as CEO in December 2020.