The Ministry of Health says it will grant Mathari Hospital autonomy to enable it prepare its own budgets and run independently.
Health Cabinet Secretary Sicily Kariuki, who visited the hospital Tuesday, said: "We are working on a formula to delink it from the ministry so that it can independently focus on policy standardisation and offer the best possible services," she said.
Ms Kariuki added that the ministry would also increase resources to the facility, which currently has a Sh1 billion budget gap.
Owing to the gap, the only public hospital offering specialised psychiatric services and training lacks critical equipment such as Computerised Tomography (CT) Scan and Magnetic Resonance Imaging (MRI) machines. This means that it cannot offer psychiatric patients from across the country who rely on it proper diagnosis.
An Auditor-General report last year revealed that average bed occupancy at the referral hospital is at 115 percent even as it grapples with inadequate funding from the government.
Review of financial records by the chief auditor indicates that funding for its recurrent budget has been dwindling, making it difficult for it to operate as it should.