State has no control over SHA system – Gathungu

The multibillion-shilling system used to manage social health insurance is not controlled by the government but by individuals.

And some patients are being turned away, a report by the auditor general has said.

The audit said the Sh104 billion system that contains Kenyans’ health data is in the hands of private individuals.

Auditor General Nancy Gathungu said her review revealed that control was in the hands of the consortium that won the tender.

Details emerging for the first time show that the consortium owns the system, its components and intellectual property rights.

Only the infrastructure would be transferred to the procuring entity, the State Department for Medical Services.

“Ownership of the system, system components and all intellectual property rights shall remain in the ownership of the consortium except for the infrastructure which is to be transferred to the procurement entity,” she said.

The review established the escrow agent appointed by both parties is expected to collect Sh111 billion in 10 years.

This means the private individuals behind the contract, which was linked to Indian firm Adani Holdings, will be making about Sh11 billion a year.

According to the audit report, the consortium collects 2.5 per cent from every contribution by members, five per cent from claims by health facilities, and 1.5 per cent for track and trace solutions.

Further, the government is prohibited from developing another similar system similar to compete with the SHA system.

It is prohibited from developing a product with similar functionalities. Gathungu identified immense risks in the event of any incidents that would affect the system or any technological changes.

The auditor said a clause in the tightly guarded contract says that even “an attempt to create a competing system” would be problematic.

As a result, Kenyans may not get value for money in the Sh104 billion health system introduced by President William Ruto’s administration.

The June 30, 2024, audit cites irregularities in the procurement, unfavourable clauses in the contract and the secrecy around the deal.

Kenya Kwanza unveiled the Healthcare Information Technology Digitisation System to replace the one used by the defunct National Health Insurance Fund.

The new system is fraught with challenges, including concerns about delayed settlement of claims.

A healthcare crisis is looming as patients are being turned away over social health insurance debts. Various players, including MPs have raised concerns about the SHA mess and have implored President Ruto to sort it out.

Religious organisations with health facilities have also deplored the lack of payment for claims running into billions of shillings.

Catholic Bishop Antony Muheria said faith-based hospitals were not receiving the disbursements in time.

“The system is not working,” he recently said.

The Ministry of Health recently acknowledged that it owes hospitals about Sh10 billion in claims.

A number of private hospitals have also blacklisted SHA over debts and are turning away patients seeking services under the system.

Although the government has assured patients and facilities that “teething problems” would be solved, concerns are rife that bureaucrats are slow to fix them.

As the problems mount, it is emerging the government broke the law in using a specially permitted procurement procedure to directly source the supplier.

The report states the system was irregularly procured as it was neither planned nor budgeted for in the medium-term spending plan.

“This process was contrary to Article 227 of the Constitution...” Gathungu said.