Starting a Private Hospital in Kenya: The Ministry of Health recently gazetted 35 hospitals that had been upgraded to Level Five category. Among these was the RFH Specialist Hospital in Nairobi. RFH is is affiliated to Ruai Family Hospital. RFH joined prominent hospitals such as the The Aga Khan University Hospital, Coptic Hospital, Gertrudes Garden Children’s Hospital, MP Shah Hospital, The Karen Hospital, Mater Hospital and Nairobi Hospital.
But the uniqueness of RFH is how its founding hospital, Ruai Family Hospital, was started. The hospital was started by Maxwell Okoth at only the age of 25. Dr. Okoth is now aged 31. So how did he do it? Here is his story was first published in the Business Daily:
The bug bit him in his mid-twenties, something akin to stories of innovators who launch earth-shaking and life-changing ideas from their colleges.
A medical doctor, he began the journey of providing health services to people in September 2011 while in his third and final term of an industrial attachment at Kiambu District Hospital.
Mr Okoth, 30, was convinced that opening a hospital was the only way he could help to improve a sector that, in Kenya, grapples with a myriad of challenges, including strikes, lack of right and enough personnel, equipment and medicines.
“While in Kiambu I realised that there is a huge health gap that needs to be met especially in maternal and child health,” Dr Okoth says.
Actualising this dream, however, remained a major headache. But his resolve also remained stronger than the related fears.
Still attached to the district hospital, he scouted for a suitable location to base his hospital. Indeed, introductory entrepreneurship classes list the right site as an important factor when setting up.
While his idea was to open a hospital in Pipeline Estate, his then girlfriend and now wife, suggested that he envision it to resemble Ruai township which was then quiet with little activity.
Equipping the clinic
“I needed a place to grow with and that is how I settled on Ruai after visiting it for the first time,” he said. He opened a clinic at the Ruai shopping centre using Sh. 150,000, which was a loan from his mother. He also got Sh. 100,000 from his wife, who is a pharmacist.
Starting off, the facility had basic equipment. He hired a clinical officer and a lab technician.
He was still attached at Kiambu District Hospital and could, therefore, only sneak in the evenings and return to Kiambu.
He, however, remained hopeful that the clinic would pick up, sooner rather than later. The hospital could barely sustain itself and at some point he gave up his rented house in Kiambu and opted to sleep in the clinic.
“I was paying the employees, rent and buying clinic supplies from my pocket.”
As fate would determine, he got posted to Nyeri Provincial Hospital, meaning he would not find time to assess what was happening at the new outfit that required his physical presence and increasing financial resources.
One day while travelling to Nairobi to do his routine checks at the clinic, he got involved in a grisly accident that left his car a write-off.
Instead of using the compensation cash from the insurance company to replace the car, he approached Crown Health Care for equipment that he hoped would increase the traffic to his clinic.
Equipping the clinic was one of the steps he needed to make to empower his employees to practise real medicine as it was demanded, he said.
After a down payment of Sh600,000, the clinic got X-ray and ultrasound machines as well as equipment to kit out his theatre. That was in December 2012. “I do not know how they accepted but even in my shaky financial status they gave me equipment worth about Sh4 million,” he said.
“I was also required to pay Sh232,000 every month to repay the loan and I had no idea where I was going to get the money. I only had faith that things would work out in my favour.”
With new equipment installed, Mr Okoth was hoping to tap patients that visited public hospitals like Mama Lucy Hospital located close to his hospital for basic procedures.
“I remember the theatre was in some small room but it could save a life when the occasion called for it,” he said, reminiscing about his clinic.
The business was not picking up as he anticipated and was forced to take a loan to make the first payment to Crown Health Care, the equipment suppliers.
It was during his leave days when he finally got a chance to be at the clinic the entire day and was shocked that they made Sh26,000 in 12 hours.
“When I was in Nyeri the employees would report that there had seen no patient or had had a good day after making Sh2,000 but never had we gone past Sh5,000,” he said, adding how he realised that the clinic had been making money that was not reported. “I had to let everyone go and start all over again.”
Mr Okoth then hired a clinical officer who he had supervised during his internship at the Nyeri Provincial Hospital to oversee the operations.
Slowly, things began to pick up that the clinic became self-sustaining.
Starting a Private Hospital in Kenya: Larger space
In July 2014, they moved to a bigger space as demand for services had outgrown the clinic’s premises. He got Sh1.8 million from the Youth Enterprise Fund, a government support for upcoming entrepreneurs, to help him actualise the plan.
Ruai Family Hospital is a 40-bed hospital. Mr Okoth is setting up a newborn unit of about seven incubators at the facility, which is now accepting National Hospital Insurance Fund (NHIF) cards.
Ruai receives about 70 people every day and recently recorded the highest births in December since its inception after delivering 112 mothers.
He plans to replicate the model in all 47 counties and has identified five counties to start with and estimates that it would cost Sh. 15 million to open one model. Starting a Private Hospital in Kenya.