Kenyan grows healthcare group from one-bed apartment to eight hospitals

The RFH specialist hospital offers a wide range of advanced services.

Dr. Maxwel Okoth (35) founded today’s RFH Healthcare Group in 2011 in a one-room apartment. Over the next ten years, he expanded the business to eight hospitals and medical centers.

The origins of RFH Healthcare

Okoth is a graduate of the University of Nairobi Medical School. In 2010 he started his internship in a public hospital in central Kenya. Although it would have been easier for Okoth to get into a large hospital or existing practice, he decided to become an entrepreneur. During his internship, he identified a gap in the existing value proposition. In Kenya, the established private medical facilities mostly serve the upper end of the market. There was a huge void for a brand that was cheap but offered an acceptable quality of service.

RFH Healthcare began in a one-room apartment in Ruai, a suburb to the east of the Kenyan capital, Nairobi. To attract patients, a plywood board advertised Okoth’s services and indicated that the facility was open 24/7, an important proposition. The reception and waiting area were clean and tidy and news soon spread. Patients began to request consultations. “You soon became tied to me and not to the institution. When I wasn’t there, they came back when I had the time, ”he explains.

Okoth’s mother loaned him $ 3,000 as seed money to start the business. When he was involved in a car accident in 2012, the insurance company paid out around $ 6,000. This included urgently needed X-ray and ultrasound machines as well as anesthesia machines for the operating room. It enabled him to perform basic surgeries and offer services such as X-rays.

Okoth eventually realized that many people did not go to the practice even though they needed medical help because the facility was simply too small. He started looking for something bigger.

RFH Healthcare's Ruiru office.

RFH Healthcare’s Ruiru office.

Growth of the hospital group

Okoth contacted the landlord of an unfinished building in Ruai who was so keen on the idea of ​​having a hospital in the area that he completed the construction, installed windows and tiles, and painted the building; something that the tenant of a commercial building is usually responsible for.

To finance the equipment of the new Ruai Family Hospital, Okoth applied for a loan from the Youth Enterprise Development Fund. While it was being approved, payment was delayed and he had to sell his wife’s car to meet immediate capital needs. With these funds he completed the new premises and built 10 beds, a theater, an X-ray room and ultrasound machines. People began to visit them in greater numbers. Over time, the Ruai hospital grew to 40 beds and an ambulance was added. It offers general counseling, inpatient and delivery services, imaging, dialysis, general surgery, medical specialists, laboratory services and a pharmacy. Okoth relied on a bank loan to fund this growth.

The Ruai Family Hospital focuses on the low and middle paid with prices adjusted to the guidelines of the National Health Insurance Fund. The area where the first hospital was located was immortalized in the name: Ruai Family Hospital Healthcare or RFH Healthcare.

RFH Healthcare’s second family hospital was created due to the large number of referrals to the facility in Ruai from the city of Tala, about 35 miles east of Nairobi. Curious about where they get referrals from, Okoth and his staff visited Tala and decided to open a 10-bed hospital there.

In 2016 he became aware of a place in a gated community in the Nairobi suburb of Embakasi with around 5,600 households. Okoth set up an outpatient center in Embakasi, the RFH Medical Center, aimed at middle-income earners to whom it offers a full range of medical services.

Okoth had a vision of developing a hospital where more advanced services could be offered. In 2017, he took out a loan from the bank and bought land in the Ruai suburb, where the company built the RFH specialty hospital, which began operations in 2019. The construction of the hospital was initially financed from its own resources, which paralyzed business as it shifted working capital into real estate. To remedy this, Okoth received a loan from Business Partners International to complete the building. He also had to turn to a local bank for funding to buy new equipment and fund working capital.

Between 2019 and 2021, the group opened another four facilities in several suburbs of Nairobi to bring the total number of hospitals to eight.

As for the medical staff, most of the staff work for RFH Healthcare, including general practitioners. Only the specialists or consultants are not in-house. You use the operating theaters and consultation rooms of the various RFH Healthcare facilities. You invoice RFH for the medical services you have provided; the company, in turn, bills the patient.

The reception area of ​​a medical facility of the RFH.

Offer health insurance

Kenya only has about 5% health insurance penetration, according to Okoth. RFH Healthcare has developed two insurance products: Baraka Prepaid Maternity Card and Red Leaf.

Baraka Prepaid is a rest model for people with previous illnesses and pregnant mothers; it works like a wallet. Pregnant women, for example, can save money with Baraka for nine months. RFH Healthcare offers wallet holders services with a 5% discount.

Red Leaf is RFH’s in-house microinsurance product. It works in such a way that the policyholder has to contact one of the RFH facilities in the event of illness.

Success strategies

When asked about the strategies RFH Healthcare is pursuing to be successful, Okoth emphasizes the importance of his team and attracting patients through a brand that inspires confidence in their services. “Focus, consistency and a team that believes in our dream. People who stayed even when there was no money. People who weren’t motivated by money but by dreams. Sometimes they didn’t get a salary because there was no money, but they still worked. “

RFH Healthcare provided essential services to patients at an affordable price, filling the niche in the market. Although there were a small number of other providers, RFH Healthcare was known for its facilities and quality of services, which built community trust in the brand. The care of patients in emergencies and the 24-hour opening have further increased confidence in the business.

Additionally, RFH Healthcare had the advantage of initially targeting remote suburban areas that competitors avoided.

“Given my circumstances and what was available to me, I wouldn’t do anything differently. It is not possible to have done anything faster than we did, ”notes Okoth.

The majority of the medical staff in the RFH hospitals is employed directly in the group.

Along the road

Okoth believes Kenya is positioning itself as a center for medical tourism in East and Central Africa; RFH Healthcare is already receiving many patients from the Democratic Republic of the Congo, Ethiopia, Sudan and Zambia.

Kenya’s medical infrastructure is viewed positively and other hospital groups from countries such as India are joining in to build facilities. Okoth believes the industry will see more mergers and acquisitions as smaller players cannot survive.

RFH Healthcare recently secured funding from AfricInvest, a private corporation based in Tunisia. The group has a number of new facilities in the pipeline as it expands its wings into downtown Nairobi. It is also in the process of establishing a pharmaceutical distribution company as well as a medical training center.

According to Okoth, RFH Healthcare remains open to private equity investments with a strategic partner, be it domestic or international. This will help the group expand into the region. It is also interested in acquiring or partnering with an existing player to form a large group that is well represented locally.

Johan Burger is Business Development Manager at the College of Business and Economics at UAE University, Research Fellow at the NTU-SBF Center for African Studies in Singapore and Research Associate at the Institute for Futures Research at the University of Stellenbosch Business School in South Africa.

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