Nairobi Hospital lays off over 200 amid fraud purge

Nairobi Hospital Complex. FILE PHOTO | NMG

By LYNET IGADWAH
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Summary

• Like other medical institutions in the country, the Nairobi Hospital has been struggling financially amid swelling operational costs and lower revenues in the wake of an economic slowdown worsened by the outbreak of the Covid-19 pandemic.
• Lower hospital visits translated to reduced revenues for health facilities, prompting some medical institutions to implement layoffs and salary cuts.
• The extent of the low hospital visits reflected in the earnings of medical insurers who posted a record Sh1.3 billion in underwriting profits last year on slowed healthcare claims. 

The Nairobi Hospital has laid off more than 200 workers in a move aimed at cutting costs and clearing out staff implicated in a recent graft audit.

The hospital said the affected workers had either performed poorly or had been involved in unethical practices that were exposed in a recent forensic audit of its operations.

“Besides the staff affected by normal rationalisation, the hospital is disengaging with all staff who have perennial performance issues or were implicated in unethical practices during forensic audits of the hospital’s operations,” it said in a statement.

“It is important to note that while our structure will have less staff in some categories, such as support services, more staff will be engaged in core clinical and nursing services to achieve an optimal balance between the skills and demand from our patients.”

Like other medical institutions in the country, the Nairobi Hospital has been struggling financially amid swelling operational costs and lower revenues in the wake of an economic slowdown worsened by the outbreak of the Covid-19 pandemic.

Lower hospital visits translated to reduced revenues for health facilities, prompting some medical institutions to implement layoffs and salary cuts.

The extent of the low hospital visits reflected in the earnings of medical insurers who posted a record Sh1.3 billion in underwriting profits last year on slowed healthcare claims, as patients avoided the facilities for fear of contracting the coronavirus.

Hospitals have also had to deal with high costs attributed high of prices of medicine, doctors’ fees and medical equipment that is passed on to end-users to remain in business. Kenya National Bureau of Statistics (KNBS) data shows that healthcare inflation hit 4.45 percent in January, signalling high cost of medicare.

Nairobi Hospital’s earnings dipped to a deficit of Sh824.6 million in 2019 compared to a surplus of Sh900.4 million in 2018. The hospital spent Sh1.37 billion on salaries and wages in 2019, representing a 13.45 percent increase from the Sh1.2 billion spent the year before.

“The reasoning behind the latest retrenchment is to increase the number of staff in the Clinical and Nursing divisions and reducing staff in the non-clinical departments,” said a board member who did not wish to be named in the story.

The director said that the hospital’s kitchen was overstaffed and that nurses were earning the lowest average pay and were demoralised amid the pandemic.

The Covid-19 outbreak has put nurses right at the battle front despite them being ill-prepared to cope with an influx of infected patients.

Kenya has been battling the third wave of the coronavirus infections that has seen hospitals get overcrowded, intensive care units (ICUs) filled to capacity and oxygen cylinders running empty.

The country has so far recorded 160,559 positive cases, with a positivity rate of 8.3 percent from a high of 26.6 percent on March 29.

The staff rationalisation at the Nairobi Hospital comes amid boardroom fights over tenders at the premier private health facility that saw the ouster of former chief executive officer Allan Pamba.

Dr Pamba was fired in October, just six months after his appointment, on claims that he had failed to provide a performance improvement plan for the hospital—an assertion the deposed CEO denies.

He instead blamed his ouster on a fallout over his alleged refusal to prioritise the award of a fully funded Sh118 million tender for the installation of a new security system for the hospital to Opticom Kenya despite the existence of an efficiently functioning one. Dr Pamba further claimed that he was targeted after he declined to prequalify a law firm, Diro Advocates LLP, to the panel of advocates representing the hospital and to hire Earstar (EA) Limited for debt collection services despite requests by some members of the hospital’s board.

James Nyamongo assumed office as CEO in December 2020 despite Dr Pamba obtaining court orders blocking the appointment until his case is heard.

Dr Pamba’s predecessor at the hospital, Gordon Odundo, was sacked in April 2019 amid similar claims of tender wars.