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Kenya's hospital market tipped to hit Sh349 billion
Medics from Rapha Hospital in Eldoret City, Uasin Gishu County do free check up on members of the public who went to seek services at Eldoret Huduma Centre in Eldoret City on October 07, 2024.
The value of Kenya’s hospital market is expected to hit Sh349 billion ($2.7billion) by 2029, from Sh239 billion ($1.85 billion), a new forecast showed, reflecting increasing demand for healthcare services.
The 45.95 percent jump forecast by the international research firm TechSci Research shows that Kenya's hospital market is expected to post a compound annual growth rate (CAGR) of 6.45 percent between 2023 and 2029.
"The main driver of this market expansion is the growing demand for healthcare services. Kenya's population, which now exceeds 55 million, is expected to continue to grow, particularly in urban areas,” the forecast report notes.
“This growth is coupled with an increasing prevalence of chronic diseases such as cancer, diabetes, and hypertension, which are driving demand for specialised treatments and advanced medical care. In addition, there is a growing awareness of health and wellness, with more people seeking preventive care and regular check-ups," it adds.
The report also attributes the market's growth to the expanding middle class, which is increasingly demanding higher standards of healthcare, including access to specialised and comprehensive medical services.
"As Kenya's middle class grows and disposable income increases, individuals are more willing to invest in hospitals that offer advanced treatments, specialised care, and personalised services. This demand is encouraging hospitals to improve their offerings, invest in new technologies, and expand their range of services, contributing to overall market growth," the report read.
In addition, the private sector has made significant investments in expanding health services.
Major private hospitals such as Nairobi Hospital, Aga Khan University Hospital, Kenyatta National Hospital, Avenue Healthcare Limited, Mombasa Hospital, Gertrude's Children's Hospital, Coptic Hospitals, AIC Kijabe Hospital, and MP Shah Hospital have grown rapidly to meet the rising demand for specialised medical services.
"These facilities have invested in state-of-the-art medical equipment, adopted digital health technologies, and improved their infrastructure to cater to a more affluent middle class willing to pay for higher quality healthcare. The private sector's focus on delivering faster and better quality care has further fuelled the growth of the Kenyan hospital market," the report stated.
Kenya's Master Facility List (MFL), which includes all officially registered health facilities in the country, totals over 9,600.
Of these, over 4,600 are public sector facilities, 3,600 are privately owned and 1,300 are operated by faith-based organisations (FBOs), non-governmental organisations (NGOs), and community-based organisations (CBOs).
The growing access gap
The distribution shows that the Ministry of Health oversees 42.9 percent of the country's health facilities, while the private sector manages 37.8 percent.
While the report paints a rossy picture of healthcare business in urban areas, rural areas continue to face significant challenges owing to underinvestment.
Private sector investment in rural healthcare remains limited, as many private hospitals find it economically unfeasible to establish facilities in low-income, sparsely populated areas.
The report also highlighted that the rise of digital health solutions, such as telemedicine, electronic health records (EHRs), and mobile health applications, is transforming healthcare delivery in the country.
Digital health platforms allow patients to access consultations remotely, reducing the need for physical visits to hospitals. This makes healthcare services more accessible, especially in remote areas, and improves the efficiency of hospital operations.
"Real-time access to data empowers health officials to make informed decisions in a timely manner, leading to more effective healthcare delivery in all our level four hospitals," Murang’a County Governor Irungu Kang'ata said.
Despite these positive growth trends, Kenya's hospital market faces several challenges that could hinder its long-term sustainability. A key issue is limited funding for healthcare, particularly for public hospitals, which continue to struggle with inadequate resources.
The public sector health budget almost tripled from Sh94 billion (7.8 percent of the total government budget) in the financial year 2012/13 (pre-devolution) to Sh280 billion in 2023/24 (79.7 percent of the total government budget). For the financial year 2024/25 budget, the sector was allocated Sh127 billion.
“Although the government has increased its healthcare budget, these facilities often operate at capacity, leading to overcrowding and a decline in the quality of care,” read the report.
Kenya also faces a shortage of skilled health workers, particularly in specialised areas. Demand for qualified doctors, nurses, and technicians is outstripping supply, leading to higher labour costs and increased reliance on foreign-trained professionals.
This shortage is expected to worsen as the healthcare sector continues to expand, creating an urgent need for investment in medical education and professional development.
"We have many highly qualified medical professionals who have graduated but have yet to secure stable employment. This situation is not only about unemployment but also about underemployment as many doctors are forced to accept positions that do not match their qualifications and expertise," said the Kenya Medical Practitioners, Pharmacists and Dentists Union (KMPDU).
According to the Kenya National Bureau of Statistics (KNBS), there are only 19 doctors for every 100,000 people, resulting in a doctor-patient ratio of 1: 5,263.
