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Sh38bn hospital equipment leasing deal the best thing that could happen
What you need to know:
- First, the notion that county governments will be paying a fee to the equipment manufacturers every month is a total myth. How do you pay on a contract you did not sign? Mark you, the agreement with the equipment suppliers does not carry the signatures of governors.
- Second, we must all accept that the capital cost of the project at a whopping Sh38 billion is beyond the reach of county governments. Indeed, even the central government does not have this kind of money.
- Fourth, the arrangement will allow the sharing of services of specialists such as oncologists across counties. This is particularly important if you take into account the fact that we have only 12 oncologists in the public sector to serve all Kenyans.
I do not want to go into the politics of the Sh38 billion medical equipment deal. Granted, the governors may very well have a point when they argue about the constitutionality of the whole arrangement.
However, I refuse to approach the debate from the contemporary obsessions of the political elite.
I am convinced that this is a genuine innovation, the sort to change the game of provision of medical equipment in public hospitals. In the hyper-partisan political environment we live in today, we miss the significance of important developments happening right under our noses.
The government is not about to dump expensive medical equipment on county hospitals. It is only going to purchase services from three equipment suppliers. I fully support this arrangement and here are the reasons.
First, the notion that county governments will be paying a fee to the equipment manufacturers every month is a total myth. How do you pay on a contract you did not sign? Mark you, the agreement with the equipment suppliers does not carry the signatures of governors.
Clearly, the claim that county governments are financially exposed in this transaction is baseless.
Second, we must all accept that the capital cost of the project at a whopping Sh38 billion is beyond the reach of county governments. Indeed, even the central government does not have this kind of money.
That is why, instead of an outright purchase, the equipment manufacturers were invited — in a competitively procured process — to come up with proposals where the government will only be required to pay for services.
The arrangement is that whenever the machines break down and service is interrupted, the government does not pay even a cent to the service provider
The manufacturers will also bear the cost of installing, running, and maintaining the equipment. When technology changes within the tenure of the contract, the equipment manufacturer bears the cost of upgrading it. On expiry of the contract, the government will not have to bargain with the providers about the residual prices of the equipment; it will be their job to unplug and dispose of it.
Third, is the economies-of-scale argument, if each county were to separately approach the big international medical equipment manufacturers for a similar deal, the chances are that they would not get any serious takers.
The reason the government has managed to procure and contract three top international brands — namely, General Electric, Philips International, and Mid Ray International of China — is the sheer size of the contract.
Fourth, the arrangement will allow the sharing of services of specialists such as oncologists across counties. This is particularly important if you take into account the fact that we have only 12 oncologists in the public sector to serve all Kenyans.
I think that during the ceremony in Machakos last week, the government did a poor public relations job of explaining how the new regime would entrench the practice of telemedicine.
That stunt where they tried to demonstrate how the technology will allow a specialist sitting in Nairobi to serve hospitals in far-flung areas through the practice of telemedicine did not wash.
Although I claim no interpretive authority in matters to do with medicine, I get wowed by technological breakthroughs and what I consider to be genuine innovation.
I become miffed when I see red tape-obsessed bureaucrats and public officials holding back the kind of big and risky innovations the government must make to take service delivery to the next level. If there is a point which this transaction drives home, it is that the government has no business committing taxpayers’ money to purchasing depreciating assets.
Whichever way you look at it, the Sh38 billion “managed equipment deal” being implemented by the national government is a genuine innovation. This type of transaction also allows you to spread the cost of acquiring the equipment over its useful economic life.
We must remind the government all the time that its core business is to deliver service to the people, not to own expensive gadgets which not only depreciate fast, but are also difficult to maintain.
Instead of tying cash in vehicles, construction equipment, and other assets that depreciate in value over time, county governments should embrace the leasing option.
