Chairmans Statement

On behalf of the Board of Management, I am pleased to present to you the Annual Report of the Kenya Hospital Association (KHA) for the year ended 31 December 2003. 

The Economy
Strong growth in the services sector was hampered by weaknesses in tourism resulting from the temporary flight bans and travel advisories imposed by some foreign governments during the year 2003. In general, economic growth for the year fell short of expectations as implementation of the necessary policies to facilitate economic pick up were delayed. However, interest rates on the 91 days Treasury Bills declined during the year from 8.4 % in December 2002 to 1.5 % in December 2003. The Equity Market rose significantly during the year by 101% based on the Nairobi Stock Exchange share index. Towards the end of the year, external financial assistance were resumed. Although the effects of some of the positive trends will be realised in future years, economic growth in 2003 was below expectation with GDP estimated to have grown by 1.4% in real terms in 2003 compared with 1.1% growth in 2002.

The Results
Due to the difficult economic environment, the year under review was challenging. The performance of the hospital during the first six months of the year was modest with good bed occupancy rates and revenue generation. However during the second half of the year there was a reduction in occupancy which impacted on overall revenue generation. This trend appears to be reflected in the whole sector. Activity levels either remained the same as in 2002 or changed only marginally. The bed occupancy dropped from 74% in 2002 with 195 beds to 72% in 2003. Outpatient numbers increased marginally from 66,201 in 2002 to 66,550 in 2003. Whilst the level of activities in Laboratory and X-ray were lower than in the year 2002 by 5% and 8% respectively, CAT Scan and Physiotherapy improved by 36% and 15 % respectively. A 5% price increase, on average was effected in January 2003.

Inflationary pressures affected costs. The 12-month inflation rose from 1.9% in 2002 to 9.8% in 2003. Wages and salary increases reflected adjustments to ensure that the Hospital was able to compensate staff competitively. Nursing staff salaries were adjusted upwards to stem the loss of our experienced nurses to other countries, especially the UK. Telephone and postage costs increased following tariff increases by the service providers. We continued to spend more money on repairs and maintenance to retain the equipment in good working order. Insurance costs also increased as a result of capital acquisition and utility costs were higher than the previous year due to price increases during the year. Management continues to explore various ways of containing the costs.

Provisions for bad debts increased as a result increased difficulties in collecting the outstanding debts and the collapse of one Health Management Organisation. 
The hospital realised a surplus of Kshs 19.7 million compared to Kshs 54.5 million in 2002.

Equipment and Facilities
The board continues to invest in new equipment and facilities. During the year under review, we invested Kshs 66.6 million to improve the Hospital’s infrastructure, medical equipment and office equipment. Of the total investment referred to, Kshs 34.9 Million was spent on various medical equipment and related facilities, Kshs 6 million on other equipment and installations, Kshs 7.6 million on furniture and fittings, Kshs 7.1million on building renovation and refurbishment and Kshs 11 million on Computers.

In continuation of our emphasis on improving customer care, I am proud to report that a number of important and significant projects were completed last year as follows:

We have gone through the evaluation process to upgrade the Hospitals computer systems. The process of identifying a new Enterprise Resource Planning solution, which will replace the existing system, provide more useful management information and enhance our efficiency in serving patients and clients, is at an advanced stage.

Staff Development
Training and Development and is a key to our future. The Hospital uses the Personal Development Planning (PDP) system, which was introduced in 2000 to identify training and development needs which are relevant to meet operational needs. During the year, KShs 19.7 million was invested in training and development. Out of this expenditure, 60% was allocated to the clinical departments (doctors, nursing, laboratory, pharmacy, physiotherapy and radiography) and the balance to non-clinical department. The sponsored a total of 11 nursing staff to degree programmes. 

The Cicely McDonell School of Nursing continued to play its role of facilitating both basic and post Basic education. During the year, we developed and reviewed various curricula for continuing education including Registered Paedriatic Nursing Course which was approved by the Nursing Council, Critical Care Nursing and Pain Control Management. We conducted various post basic courses to enhance the competency levels of practising nurses and professional development. We initiated communication with other institutions in an effort to establish partnerships which we expect will enhance the level of co operation within the industry in Kenya. In February 2004, 59 nurses graduated in a colourful ceremony, which was presided over by the Deputy Director of Medical Services.

KHA Secretariat/League of Friends
On behalf of the Board of Management, I wish to thank the League of Friends for their continued commitment, and support of patients and the Hospital. The trolley service, which provides essential items to patients, is appreciated. I would also like to pay tribute to Mrs. Irene Jones and Hazel Blacklock, members of the League of Friends who have spent a part of their lifetime in support of the hospital.

Board of Management and Advisors
I wish to thank Mr. R Shaw, Dr (Mrs) A Kapila and Mrs J Campell-Clause who having served on the Board of Management retired in July 2003. Special mention and appreciation goes to Mr. B. Kiplagat, who served on the Board of Management for a number of years including being the Chairman of the Board, during which period, he made a significant contribution to the hospital. Mr. Kiplagat resigned from the Board of Management in March 2004 due to his busy schedule. I also sincerely thank Mr. M. Ruben for his contribution to the hospital over many years and more recently as a member of the Board of Management. Mr. Ruben resigned from the Board in October 2003. I also thank Dr. J.T W Kabutu, Dr. S W Gathua, Dr S.O Muhudhia and Dr. P R Patel who retired from the Medical Advisory Committee. Finally I take this opportunity to thank all the Board of Management and Medical Advisory Committee members for their dedication and contribution to the Hospital and the Kenya Hospital Association.

Management and Staff
During the year Dr. Cleopa Mailu joined the Hospital as Chief Executive Officer. Dr Taabu Simiyu was appointed the Accident and Emergency Co-ordinator. I wish to acknowledge the contributions of Dr Shem Musoke who has been the A&E Co-ordinator since inception of the Unit. We welcome all the new staff who joined the Hospital and appreciate the continued contribution by all staff. I would especially wish to single out our nurses who over the years have made our Hospital well known for the excellent nursing care provided.

Golden Jubilee Celebrations
On 23rd April 2004, the Hospital celebrated the 50th Anniversary of the founding of Nairobi Hospital at a function which was graced by HE The President and Commander in Chief of the Armed Forces of Kenya, Hon. Mwai Kibaki who officially opened the new reception.

To mark this occasion, the Board of Management agreed to give a facelift to the Front Reception, part of the front and rear car park, and the relocation of the washrooms. The completion of these projects will give the hospital a “New-Look”.

Various other activities have been carried out to mark the 50th anniversary which included medical camps; a Scientific Conference whose theme is ‘Building on 50 years of Experience’, outreach activity at our Eldoret Laboratory Annex and a dinner dance.

As we celebrate, I would like to pay tribute to the admitting staff, who have so ably steered the quality of clinical practice in this hospital. I would also like to acknowledge the staff for their contribution over the years.

Future outlook
As we look to the future, the management of the hospital remains committed to providing quality service, while ensuring access and affordability. As a team, we have achieved much in the past and we are confident that with our hardworking staff we shall continue to offer excellent healthcare. The Board’s strategic direction is to expand and introduce more specialised services. In addition, while we keep at the edge of modern advances in medical critical care, we recognise the need for counselling services, especially to deal with HIV/AIDS. To achieve this, we shall embark on a fundraising exercise to complete the Short Stay Unit on the first floor of the Accident and Emergency Department. This facility will not only provide day surgery services, but also house specialised clinics to cater for patients.

Finally, it is our intention to improve our clinical services by purchasing modern equipment for our laboratory services, diagnostic radiology services, the cancer centre, and generally improve the infrastructure of the hospital. We shall also explore available options to provide more offices for our consultants, so that as many of them as possible can be near their patients. As the backbone of our care, we shall continue to develop nursing specialists for the various medical specialities, so that the quality of their work can continuously improve and to keep up with modern trends for the benefit of the hospital and patients.

Dr. Chris Obura
Chairman, Board of Management
May 2004