Nairobi Hospital suspends price hikes after insurers' outcry

Patients at The Nairobi Hospital can breathe a sigh of relief after management suspended its proposed price hikes, which were due to take effect today August 12.

This follows a consultative meeting on Monday with major insurance providers who had protested against the revised rates, some of which had risen by up to 61 per cent. The insurers included CIC, Britam, Old Mutual, AAR, and Minet.

“Following a productive strategic meeting held today with key insurance providers, The Nairobi Hospital has agreed to suspend the implementation of its recently announced price review, effective immediately,” Chief Executive Officer Felix Osano said.

The increases, implemented on July 30, had included a rise in Pap smear and HPV test costs from Sh5,000 to Sh16,000, CT scans to Sh30,000, and ICU charges to Sh45,000 per day.

Insurers had warned the hikes were unsustainable. CIC called the rates “unremediable,” while AAR said efforts to negotiate a sustainable model had failed.

Health economist John Nyangi warned against treating healthcare like a free-market commodity, noting that medical demand is inelastic and vulnerable to price exploitation. He cited global warnings that unregulated health markets can lead to monopolies and poor health outcomes.

Pacis Insurance Company Limited, in a letter to clients, said the recent unilateral price adjustment would significantly affect its medical insurance plans.

“In our firm commitment to maintaining the affordability and long-term viability of your cover, and to avoid burdening you with mid-term premium increases, we are unable to absorb these unanticipated cost escalations,” wrote Belinda Kubania, the company’s Head of Medical Business.

She assured clients that access to quality care would continue in other accredited hospitals within Nairobi and across the country.

“Please rest assured that your access to quality healthcare will remain uninterrupted. We have a robust panel of accredited providers within the Nairobi region and beyond, all offering the same high standards of medical care and service excellence,” added the letter.

AAR Insurance also expressed concern over the upward revision of service rates, saying that while it recognised the hospital’s need to invest in quality care, “the magnitude of these increases is, in our view, not sustainable over the long term.”

The insurer noted that several engagements with the hospital to resolve the matter had been unsuccessful.

“We engaged The Nairobi Hospital in opne and constructive discussions, aimed to agree on a more sustainable. Volume based model that would safeguard both quality and affordability. Despite sincere effort from both parties, we were unable to reach mutual acceptable terms at this,” added AAR statement.

But in a statement on Monday, Osano noted that the open and constructive discussions with the insurance providers addressed concerns regarding the proposed pricing structure, ensuring alignment with shared commitment to patient-centered care.

“The Nairobi Hospital remains dedicated to fostering strong partnerships with all stakeholders while upholding its mission to deliver accessible, high-quality healthcare to the community,” read Osano’s statement in parts.

“We look forward to continued engagement with our insurance partners to ensure sustainable solutions that prioritize the well-being of our patients,” he added.