The Social Health Authority will stop reimbursing the drug portion of treatment costs in public referral hospitals where patients are not given prescribed medicines, in a new directive aimed at tightening accountability in the health system and sealing gaps that have led to misuse of public funds.
Health Cabinet Secretary Aden Duale told senators on Wednesday that the decision is based on data from the government’s Digital Health Superhighway, which has exposed repeated cases where patients receive consultations, laboratory services and even surgical procedures in Level 4 and Level 5 hospitals, but are still forced to buy drugs from outside pharmacies.
According to the Ministry of Health, the system has revealed a growing pattern in which patients complete treatment inside public facilities but leave without medicine from hospital pharmacies, raising concerns about service delivery and possible diversion of patients to private drug outlets.
Appearing before the Senate on Wednesday, Duale said the government had identified widespread gaps in several counties where patients were not being issued with drugs despite being fully treated within public hospitals.
“What we have done is that if a patient goes through the system and does not receive medicine, SHA will pay for all other services except the drugs,” he told senators.
He pointed to Kakamega County’s referral hospital as one of the worst affected facilities, where more than 52,000 patients are said to have gone through treatment without receiving medicines. Similar trends, he added, have been recorded in Nairobi and Bomet counties.
Duale linked the problem to the rise of private pharmacies operating near public hospitals, where patients are often redirected to buy medication out of pocket even after being treated within government facilities.
The Digital Health Superhighway, which integrates patients, health providers and insurers into one system, has enabled real-time monitoring of services across both public and private facilities, exposing gaps that were previously hard to track.
Duale said the new rule will ensure SHA only pays for drug costs where medicines are actually issued within the hospital system, while still covering other approved medical services.
He also said the move is meant to push hospitals to rely more on the Kenya Medical Supplies Authority, whose supply performance has improved. Kemsa’s current order fill rate stands at 92 per cent, with a target of full capacity by the end of the year.
The ministry is also engaging county governments to strengthen procurement systems through Kemsa following reforms aimed at improving its operations and funding.
At the same time, Duale said digitisation has helped uncover fraud in the health sector, leading to the closure of more than 1,200 health facilities found to be involved in malpractice. He also revealed that 22 doctors and 40 clinicians have been barred from practicing due to violations linked to the system.
On pending claims, the government has set aside Sh4 billion to settle verified debts inherited from the defunct National Hospital Insurance Fund, especially those below Sh10 million, as part of efforts to restore trust among healthcare providers during the transition to SHA.
Duale said the authority has so far achieved a 74 per cent claims settlement rate, supported by a strict 90-day payment policy across all levels of care.
Beyond financing reforms, the Ministry of Health is also expanding public health programmes, including stronger tobacco control measures backed by the Solatium Compensatory Contribution, and rolling out the Kenya Climate Change and Health Strategy (2024–2029) to address climate-related health risks.
In cancer care, he said the government plans to boost treatment capacity through the installation of an additional linear accelerator at Kenyatta National Hospital and the establishment of regional cancer centres in Kisii, Nyeri, Meru and Kisumu to improve access to care across the country.