PE funds make money in two ways: by charging an annual management fee of the money they have been trusted with, calculated as a percentage, and by taking a cut of the profits they make when they sell the companies they buy. So their primary motivation is to get more investor money, and to restructure companies as fast as possible to attract a higher price than they bought it for.
Meanwhile, Arif Naviq remains in the UK, and not by choice. Last May, after spending a year in custody, he was granted a record $20 million bail. By October, he was also being investigated for bribing Pakistani politicians.
While this complicated game of international finance was happening, the private hospitals in Kenya were still operational, and working to make profits for the fund.
In a text forwarded to the Nakuru Hyrax staff on September 11 2018, CEO Felix Wanjala outlined the revenues so far, and the targets he expected them to contribute to that same day.
The Nairobi Women’s Hospital group was making Sh12.81 million a day against a target of Sh15.47 million, and cumulatively was Sh33 million off a total target of Sh136 million.
“Team, this revenue is too low for the numbers that we have, are we billing?” he posed to the staff.
As part of the shift from Dr Thenya’s ownership to the new owners, the PE funds had launched what was typical corporate behaviour after acquiring a new asset. Nairobi Women’s Hospital had, over time, stopped hiring doctors, professionally known as medical officers (MOs), most of whom were postgraduate students or specialists in training, to serve outpatient patients. It had instead turned to hiring young clinical officers (COs), who only had a diploma earned after three years of training, to do the job.
To staff its rapid expansion, Nairobi Women’s was now depending on COs to serve patients who were not already admitted in the hospital. It was also encouraging them, according to multiple insiders, to meet admission and revenue targets, which were analysed every hour of every day, day and night.
While the hospital still hired doctors, it hired fewer than it required because MOs would get better salaries, and gave clinical officers the job of determining which patient needed to be admitted.
It also gave the COs a financial incentive, at one point Sh710 for every patient they admitted. This structure meant that, while COs would find and push for admissions, even (and especially when) they were unnecessary, more qualified medical officers would only encounter the patients when they had already been admitted, and were already paying for the bed, food, tests and medicines.
They were already, in lingo used frequently in the leaked WhatsApp group messages, “customers”.
Once they were in the hospital, the top management of Nairobi Women’s encouraged the staff, everyone in the WhatsApp group, medical and non-medical staff included, to keep them admitted for longer.
In another text, for example, CEO Wanjala asked his staff: “How did we end up at 18 discharges from 10 planned?” The text included an emoji of a sad face, suggesting he was unhappy with the situation.
His COO Eunice Munyingi then asked someone called Victoria to answer the CEO. Victoria then passed the question to two other people, before the CEO responded “Vikki calm down … we expect better performance in future. Obviously this is not good for us.”
Medical officers and other specialists who worked at Nairobi Women’s at the time describe multiple instances of being pushed to keep patients for longer than necessary. In a text sent at 8:04am on November 11, 2018, COO Munyingi told the staff to “lock discharges at seven” and to “kindly start now”.
This meant that if you were admitted at this particular Nairobi Women’s Hospital, and should have been released to go home, the decision of whether to let you go was based on revenue and admission targets, and not your health.
In the texts, the senior executives ask staff to post hourly updates of the branch’s status, specifically how many people and how much money they had brought in, and cheer them on in a language a media practitioner described as “better suited for a trading floor than a hospital management team”.
The comparison to a trading floor is poignant, because insiders describe an internal system that fits on the script of the popular TV series “Billions”, with a similar dynamic to that of the characters Bobby Axelrod and Mike “Wags” Wagner have in the show.
The similarities with a fictional TV show do not end there, because the two characters run a ruthless private equity firm that buys companies, restructures them by any means necessary, legal or otherwise, and sells them over for a profit.
Like a PE firm, the top management of Nairobi Women’s also kept tabs on its reputation. In one screenshot from 2017, the then clinical services in-charge, Victoria Wawira, posted a screenshot of a Facebook post written by a woman who had commented on their hurry to admit her child. Whenever she took her daughter to the hospital, “the doc sees her and immediately its admission; no second thought about medication,” she’d written on the Nakuru County Mums group on Facebook.
In follow-up messages, Victoria told two clinical officers that the post was “trending on FB” and that they should “vet admissions”. In any other context, this would mean that the two COs should make sure they were admitting only patients who needed to be admitted. But in this particular context, it meant one thing: that they should check that they didn’t admit potentially problematic patients who would be suspicious of the need for them to move from outpatient to inpatient.
Bad publicity meant not just harm to reputation, but could also hurt the bottom line if future buyers found the posts and figured out how Nairobi Women’s was achieving its spectacular service and revenue targets.
The chaos, and reasons we seek medical attention, meant patients caught up in this great game of corporate greed, and trusting their doctors to know what was best to restore their health, did not know better.
They would sell assets, sacrifice savings, hold fundraisers both online and offline, and do whatever was necessary to pay their hospital bills, without ever knowing that they had been unknowing victims of the vagaries of modern finance, and the sudden focus on Africa that followed the 2008 mortgage crisis.
Additional reporting by Angela Oketch and Nasibo Kabale