One of the most profound yet under-acknowledged consequences of the Social Health Authority (SHA) failing to pay healthcare providers is the impoverishment of doctors and health workers. Health facilities are increasingly unable to meet their wage bills, forcing many to take loans simply to keep their doors open. Across the country, providers are laying off staff, facilities are being auctioned, and some proprietors have been compelled to sell their hospitals altogether due to unsustainable cash-flow constraints caused by non-payment.
The ripple effects extend beyond institutions to individuals. Kenya Medical Association SACCO (KMA SACCO) has recorded rising defaults in savings and loan repayments during this difficult period. Paradoxically, the same hardship has driven increased uptake of SACCO products. One notable innovation has been the short-term emergency loan—a three-month facility designed to rescue members from predatory mobile lending platforms, Hustler Fund loans, expensive shylocks, and high-interest bank products. This product emerged directly in response to the financial distress faced by KMA SACCO members.
A Human Story Behind the Statistics
Consider the case of a medical officer with ten years’ experience since graduating from medical school who has never secured permanent employment. He survives entirely on locum work in a town with several private facilities. Over time, he has borrowed from nearly every mobile lending platform—Tala, KCB, Hustler Fund, among others—and accumulated significant debt.
Is he lazy? Quite the opposite. He works relentlessly. When he sought my help, I referred him to a colleague who owns a hospital. Ironically, he already worked part-time at that very hospital. However, because SHA owes the hospital substantial sums, the facility can no longer sustain locum payments. He also worked locums at a county hospital to bridge service delivery gaps, but these arrangements were terminated following industrial action.
Now picture this: a medical officer who cannot afford to pay his own SHA contributions, despite having diligently provided healthcare services to Kenyans. The hospital he works in has not received legacy NHIF payments now inherited by SHA, leaving it unable to pay him. Despite his skills—including performing surgeries, running clinics, and working long hours—he remains unpaid.
He seeks additional locum work in another town at a public county hospital, only for these opportunities to disappear due to industrial unrest. In desperation, he turns to KMA SACCO for assistance, only to discover that his account is dormant because he could not maintain regular contributions during periods of non-payment. To reactivate his account, he must deposit funds he simply does not have. Meanwhile, he is trapped in a web of high-interest mobile loans—ironically promoted by government as solutions for young people to build livelihoods.
This is a debt trap created not by indolence, but by systemic failure.
This single story illustrates the devastating impact of SHA’s failure to pay for services already rendered—whether due to fiscal deficits, a persistent fraud narrative, prioritisation of vendors, or outright impunity.
Broader Economic and Health System Impact
The non-payment of legacy NHIF debts and ongoing SHA liabilities has far-reaching consequences. It undermines the broader economy, cripples healthcare providers’ ability to access the very services they offer, and drives doctors and institutions into cycles of debt. These providers have already delivered care to Kenyans, often under difficult circumstances, while the government continues to claim credit for health outcomes achieved on their backs.
How Do We Fix This?
Those entrusted with public service must place the common good above private gain. In healthcare, government must listen to providers. Health workers are the bridge between Mwananchi and policymakers. The Ministry of Health must stop talking down to healthcare providers and instead engage them meaningfully to co-create sustainable solutions.
The The Ministry of Health must also end the practice of enforcing contractual obligations unilaterally on providers while allowing government—the true duty bearer—to evade its own responsibilities. It is untenable for SHA to dictate how healthcare is practiced in Kenya while subjecting providers to algorithmic and administrative errors propagated through the Digital Health Authority (DHA).
Practical and Achievable Solutions
Simple solutions exist:
1. Government must fund its share of healthcare.
The state must stop parasitising the contributory Social Health Insurance Fund (SHIF). Twenty percent of already over-taxed formally employed Kenyans cannot finance the entire health system. Government must fully fund:
• Primary Healthcare Fund (PHCF): KES 50 billion
• Emergency, Chronic and Critical Illness Fund (ECCF): KES 75 billion
2. Pay legacy NHIF debts.
SHA must settle the inherited NHIF debt of KES 33 billion to resuscitate healthcare providers, many of whom are on the brink of financial collapse despite delivering quality care.
3. Clear current SHA arrears.
SHA must pay outstanding current debts estimated at KES 43 billion as per the latest survey. Claims continue to accrue daily, worsening the crisis.
4. Stop unjustified rejection of valid claims.
The DHA must stop using agentic AI systems to reject legitimate claims—over KES 10 billion worth, as acknowledged in the President’s last address. The newly introduced “Not Validated” category appears designed to delay payment rather than resolve issues.
5. Prioritise providers over vendors.
Funds paid to system and claims-management vendors should be re-prioritised to clear provider arrears. Vendors cannot be more important than those who actually deliver healthcare. Systems do not treat patients—people do.
6. End the blanket fraud narrative.
Address fraud decisively, but acknowledge that many investigated facilities have been cleared. Fraud allegations must not be used as a pretext for indiscriminate non-payment.
7. Fix regulatory and systems mismatches.
DHA must establish accurate and timely interfaces with the Kenya Medical Practitioners and Dentists Council (KMPDC). The notorious Level 3B–3A mismatch led to widespread non-payment and loss of business for many facilities. Regulatory errors should never punish healthcare providers.
A Long-Term Reform
Ultimately, SHA should pay for services rendered, not the level at which they are delivered. As a gynaecologist, I can treat a patient under a tree, at a health centre, or in a referral hospital. The service is the same; only the venue differs.
Healthcare financing must recognise this reality
Dr Simon Kigondu is a commentator on healthcare mmatters and a gynaecologist