By Daniel Otieno, Kakamega
When Kenya’s Social Health Authority (SHA) officially replaced the National Hospital Insurance Fund (NHIF) in October 2024, it was celebrated as a bold leap toward achieving universal health coverage (UHC).
One year later, the transition has delivered mixed results marked by digital innovation on paper, but deep financial strain on the ground.
A new survey by the Consortium of Healthcare Providers (CoHP) which brings together the Kenya Healthcare Federation (KHF), Kenya Association of Private Hospitals (KAPH), Rural and Urban Private Hospitals Association (RUPHA), and the Christian Health Association of Kenya (CHAK) offers the clearest look yet at SHA’s first year.
Conducted across 293 health facilities in September 2025, the assessment paints a complex picture of progress and pain, optimism and exhaustion.
According to the report, 98 percent of Kenya’s hospitals and clinics are now accredited under SHA, signalling strong uptake of the new national health financing framework. But beneath that administrative success lies a sector in distress.
The study found that hospitals are battling delayed payments, unstable digital systems, and mounting debts — problems that have threatened to derail the promise of equitable healthcare.
At the heart of the challenge is the Digital Health Agency (DHA), a key pillar of the SHA reform.
The agency was created to manage an automated claims and reimbursement system, designed to replace the manual, corruption-prone processes that crippled NHIF. But instead of streamlining operations, DHA’s digital system has become a major pain point.
Eighty-one percent of the facilities surveyed said they were dissatisfied with the system’s integration, while 92 percent experienced frequent downtimes.
The report shows that 78 percent of facilities have taken loans to maintain operations, and 38 percent borrowed more than KSh3 million. Yet, even with borrowed funds, more than half admitted they could only sustain services for three months or less if reimbursements did not accelerate.
Two-thirds faced validation errors that made it difficult to submit or track claims. As a result, 43 percent of providers waited more than three months for claim approvals, forcing hospitals to run on credit and absorb losses.
“We’ve had to treat patients under SHA on credit for months,” said a hospital administrator in Kakamega. “Claims take forever to be processed, and the system keeps crashing. We’ve reached a point where we are borrowing just to pay nurses.”
The delayed reimbursements have triggered a cascading financial crisis. More than half of the hospitals surveyed (52 percent) reported serving SHA patients purely on credit, while another 36 percent adopted hybrid payment models, part cash, part credit.
As a result, 93 percent delayed payments to suppliers, 90 percent postponed staff salaries, and 75 percent laid off workers, mostly nurses and support staff.
The report shows that 78 percent of facilities have taken loans to maintain operations, and 38 percent borrowed more than KSh3 million. Yet, even with borrowed funds, more than half admitted they could only sustain services for three months or less if reimbursements did not accelerate.
Almost half reported facing auction or repossession threats, while one in two said they had considered shutting down.
The survey also found that SHA’s impact has not been uniform across Kenya’s health system. Level 3 facilities, dispensaries and health centres that form the backbone of primary healthcare were the hardest hit. They reported the highest number of service cuts, staff layoffs, and salary delays.
Level 4 hospitals, on the other hand, carried the heaviest financial load due to larger patient volumes and high-value claims. Faith-based hospitals, which provide up to 40 percent of health services in rural Kenya, were among the most vulnerable.
Even as SHA tries to find its footing, legacy issues from the NHIF era continue to haunt the transition. Seventy-three percent of surveyed facilities said they are still owed reimbursements by NHIF, and 85 percent insisted that clearing those arrears is essential for restoring confidence in the new system.
Despite the grim statistics, the CoHP report outlines a series of recovery measures. It urges SHA to fast-track simple claims within two weeks, ensure at least 90 percent system uptime, and publish a transparent arrears clearance schedule.
It also recommends temporary financial protection for indebted facilities and the establishment of a short-term credit fund tied to verified claims.
Experts argue that the coming year will be decisive for Kenya’s new health financing regime. If reforms stall, the credibility of UHC could erode further. If the government delivers on its promises, SHA could still fulfill its founding vision to make healthcare accessible, affordable, and equitable for every Kenyan.
