How Mediheal Group of Hospitals sunk

The management of the troubled Mediheal Group of hospitals have revealed that the facility started facing financial downturn in 2022.

Dr Pallavi Mishra, the Director and co-founder, was speaking to the National Assembly Health Committee led by its chairperson Endebess MP Robert Pukose, who toured the facility on a fact-finding mission.

She said that before the unprecedented fall, the management had big dreams that saw expansion of the facilities countrywide in Eldoret, Nairobi, Nakuru, and Kakamega towns.

These expansions, she said, led to securing of huge loans from banks, which have become a thorn in the flesh of the reputable facility.

Dr Pallavi, a gynaecologist running the fertility centre in Eldoret, said that the facility had been doing well and the Eldoret branch was specialising in fertility and IVF centre.

The hospital's other branches were carrying out successful complex surgeries, including kidney transplants.

"We started in Eldoret, and then we moved to Nairobi, Nakuru, later we opened a branch in Eastleigh. In 2021 we opened the Parklands facility in Nairobi and we were moving to Naivasha. We wanted our facility to serve countrywide. We were in the process of opening a branch in Kisumu," she told the committee.

"Since our establishment in 2004, we have witnessed growth of our departments and units including the renal and dialysis, kidney transplant and orthopaedic which attracted many clients from across the country," she added.

Impressed by the immense growth, Dr Pallavi said that the institution settled on establishing an ultra-modern cancer centre in Nairobi.

"The nurse-to-patient ratio was high, even the number of technicians working in the labs was very high. We had an ICU 1:1 ratio which is at par with international standards," she stated.

She said the facilities across the country were frequented by a growing number of clients.

However, this became short-lived as they suffered a major setback when a major insurance company cut ties with the facility in December 2022, signalling the downfall of the once vibrant facility.

"They did not give us any valid reason. Suddenly, there was a 45 per cent drop in the number of our inpatient and outpatient clients," she recounted.

The teachers health cover was also withdrawn from the facility and in January 2023, the facility's director said that the police insurance cover followed suit.

"This further reduced our revenue by about 25-30 per cent. Now, we had a revenue loss of more than 60 per cent within a period of three months," she explained.

Dr Pallavi said that with the initial expansion of its various units resulting in unpaid loans and its dwindling fortunes it became difficult to sustain the growth of the facilities.

The committee heard that regular and private insurance companies then started moving away since the out-patient clients were not getting the required services as the patient satisfaction was affected.

"In Eldoret for instance, where we would get over 500 out-patients in a day the number reduced to about 200 clients per day. Right now, we have about 50-60 out-patient clients. That is not sustainable, yet we have bills to pay," she started.

She explained that the woes had a spiraling effect as the facility could not pay its staff in time, leading to the staff taking the legal way and won a case against the facility.

"The court then ordered that the facility should not be paid monies owed to it by some partners who owed us, including the NHIF. With the stay order in place, the NHIF has not yet paid us our dues for services we offered," Dr Pallavi explained.

Questioned whether payment of the dues by NHIF will be helpful to the hospital, Dr Pallavi said that the monies will be significant in helping them pay some of their debts and access supplies for their clients.

She said that the move by the court dealt them a blow, leading to their staff lacking motivation over non-payment and finally closure of all their in-patient departments in their five hospitals.

Dr Pallavi however affirmed that the facility through its chairman, her husband, and Former Kesses MP Dr Swarup Mishra is working on getting funding in order to service their loans and pay salaries and rents.

She said that the facility has been working on cutting costs and minimizing expenditure.

"Getting funding is the only option left to ensure that our debts are offset and that we can be able to pay for our medical supplies and cater for our patients' needs as we work towards revival of the institution," she stated.

The National Assembly health committee chairman Dr Pukose revealed that the Mediheal hospital is owed Sh51 million by the NHIF.He said that since 2021, NHIF has paid the facility more than Sh1.7 million.

"The facility has had a good working relationship with NHIF. This is a NHIF accredited facility. However, we have toured the wards and almost all the wards are closed, most services are not rendered save for Dr Pallavi's fertility clinic and the outpatient unit which is running," he noted.

The committee members pointed out that there has been an outcry over the closure of the hospitals, noting that the facility has been instrumental in achieving Universal Health Coverage (UHC) and in providing employment to thousands of people.

"The facility employs more than 2,500 people countrywide, while the Eldoret branch alone has 600 employees," the committee was told.Last month, a section of Eldoret residents petitioned President William Ruto to intervene and save the struggling Mediheal Group of Hospitals.

Mishra obtained a temporary injunction from the High Court in Eldoret restraining Legacy Auctioneer Services and Commercial International Bank (CIB) Kenya Limited from auctioning the hospital property.

Mishra and his wife Pallavi filed a suit in the High Court in Eldoret against the auctioneers and the bank from which he secured the loan and registered the hospital as security.