16 February 2017

Rwanda: Private Firm to Manage Rwanda's Referral Hospital

The management of Rwanda's biggest national referral -- King Faisal Hospital -- has been handed to an Angola-based company.

The new managers are expected to upgrade the hospital's services and facilities to international standards.

With an initial investment of Rwf17 billion ($23 million), Oshen Healthcare Rwanda Ltd, a subsidiary of Oshen Group South Africa, announced in April last year that it had acquired rights to manage the hospital for a period of five years, after signing a lease agreement with the government.

In order to turn it into a profitable referral hospital, the new management said it will run the 160-bed hospital like a private business, geared to offer medical services that are scarce in the region. One of the incentives that Rwandan government offered to the new investor is that any outstanding debts will be settled by the government and not the investor.

"We will not transfer any debts to the new investor," said Minister for Health Diane Gashumba.

Despite bringing in Rwf10 billion annually, profitability at King Faisal has been a pipedream for decades, and it has a debt of about Rwf300 million ($361,445) on its books.

This is due to the difficulties it finds in recovering money owed by patients who are enrolled under the social health insurance programme -- Mutuelles de Sante.

Under the insurance scheme, patients are expected to pay 10 per cent of their medical bills while government pays the rest. However, many of the patients default on payments.

According to documents seen by The EastAfrican, the hospital suffered a losses of Rwf300 million ($361,445) last year, after failing to collect Rwf600 million ($722,000) from Mutuelles de Sante users. According to Dr Emile Rwamasirabo, CEO of the hospital, observed that more emphasis is now being placed on collecting payments from defaulters.

"KFH is in good financial shape right now; but one of the big challenges is how to collect payments from Mutuelles de Sante clients whom we offered services. If it weren't for this challenge, the hospital's receivables and payables would easily balance," Dr Rwamasirabo said.


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