NAIROBI, Kenya — Health Cabinet Secretary Aden Duale has announced a new financing arrangement between the Social Health Authority (SHA) and the Kenya Medical Supplies Authority (KEMSA) aimed at stabilising the supply of medicines in the country’s top referral hospitals.
The agreement, signed during a high-level consultative meeting with the chief executive officers of Kenya’s Level 6 national referral hospitals, introduces a revised healthcare provider contract designed to strengthen the medical commodities supply chain.
At the centre of the reforms is a split payment mechanism that will allow SHA to remit a designated portion of approved hospital claims directly to KEMSA for the procurement of essential medicines and health products.
“This automated check-off system will ensure timely replenishment of critical commodities, reduce the risk of stock-outs in referral facilities, and strengthen financial discipline across the health system,” Duale said after chairing the meeting.
Tackling Persistent Medicine Shortages
Kenya’s public health facilities have long struggled with intermittent shortages of essential medicines, often linked to procurement delays, unpaid supplier bills, and weak supply-chain coordination.
Officials say the new arrangement will help ring-fence funds meant for health commodities by automatically allocating part of hospital reimbursements to KEMSA.
The reform is expected to guarantee consistent availability of essential medicines and medical supplies under what the ministry described as the Health Products and Technologies (HPT) Commodity Security Framework.
“This is a practical step to guarantee the steady availability of essential medicines and medical supplies,” the ministry said.
Digital Platform to Boost Transparency
The new financing model will also be supported by a centralised digital system managed by the Digital Health Agency (DHA).
The platform will allow real-time monitoring of ordering, distribution, and consumption of medical commodities across referral hospitals.
Health officials say the system will improve transparency and accountability in reimbursements made to healthcare providers while enabling better forecasting of supply needs.
Among those who attended the meeting were Director-General for Health Patrick Amoth, SHA Chief Executive Mercy Mwangangi, DHA head Anthony Lenayara, and KEMSA Chief Executive Waqo Ejersa, alongside CEOs of national referral hospitals.
Push Toward Universal Health Coverage
The reforms are part of the government’s broader healthcare overhaul linked to Kenya’s Universal Health Coverage agenda.
Duale said the new system supports flagship programmes under the government’s health reforms, including Bima Bora and Afya Nyumbani, which aim to expand access to affordable healthcare services.
“A reliable and transparent supply chain is fundamental to Universal Health Coverage,” he said.
Kenya’s health financing structure has been undergoing significant reforms following the transition from the former National Hospital Insurance Fund (NHIF) to the Social Health Authority, part of a wider restructuring intended to improve efficiency and accountability in healthcare funding.
Officials say the new supply-chain financing model could significantly reduce medicine shortages in public referral hospitals if fully implemented, while improving financial discipline across the national health system.
The government says the reforms ultimately aim to ensure that every Kenyan can access quality and affordable healthcare without facing disruptions caused by medicine stock-outs.
