After coming face-to-face with the challenges besetting a chronically under-funded health system, Dr Maxwell Okoth decided it was time for change.
He was 25-years old and working as an intern at a public hospital in central Kenya when he came face-to-face with the enormity of the challenges besetting his country’s health system.
“We would be in a delivery room with an expectant mother and the facility would intermittently suffer power outages, while other times basic medical kits to perform an operation would lack and as a consequence, patients would be shortchanged in service delivery,” Okoth remembered. Emotionally shattered by the experience, he decided to do something about the situation.
That experience catapulted the 2010 medical graduate at the University of Nairobi into a new career – as the country’s youngest health entrepreneur. Today, he owns and runs a world-class referral hospital with a 100-bed capacity.
While doing rounds in the theater that he had had a moment of inspiration.
“While working as an intern I saw a gap in the area of access and provision of affordable health care and that’s when this dream started. There was a huge health need in the country that needed to be fixed, especially in maternal and child health care,” he explained.
Within a year of graduating from medical school, Okoth was already on track to a very different career than many of his classmates. His road, though different to other graduates, was not entirely foreign, however.
“While at the university I was involved in Kenya’s first e-commerce platform, known as mkopa.co.ke, which I shut down when I got into my fifth year at the med school for I found it difficult to run a business and at the same time concentrate on my education,” said Okoth.
Convinced that a gap existed in the local medical ecosystem, he began scouting locations for a site to set up an enterprise.
He settled on Ruai, a dusty, peri-urban dormitory town located in the furthest eastern part of Nairobi, because there were few professionally-run facilities in the area.
When he opened the doors of the facility on September 11, 2011, he named it Ruai Hospital. Using a loan of Ksh300, 000 (just under 3,000 US dollars) from his mother’s retirement fund to set up operations, he was forced to moonlight to take care of extra bills at his hospital.
Okoth’ attributes his success to a tough upbringing by his parents, who taught him how to live frugally.
“Growing up, mum would give you anything you wanted in terms of books, shoes, school fees, but not money. She brought us up with tough love. Imagine if I topped in class and I walked into the house to inform her of my achievement, she would only say ‘that’s good’ and the matter would end there,” says Okoth said. His formative years were spent in Homa Bay, 270 km southwest of Nairobi, on the shores of Lake Victoria.
He still wonders what melted his mother’s heart sufficiently for her to hand him the funds he needed to kick-start his project.
“I recall one day when I was tempted to steal a thousand shillings (US$ 9) from my mum’s handbag for the purposes of going to the movies with my peers. When my mother discovered what I had tried to do, she whipped me thoroughly. And from that day I vowed never to involve myself with any form of impropriety,” he said.
On opening the hospital, he hired a clinical officer and a lab technician. However, he was still attached to the District Hospital. He needed the work to maintain his dream, which he would visit by sneaking out in the evenings. The clinic wasn’t sufficiently self-sustaining and he had to give up his rented house, opting to sleep in the clinic.
“I was paying the employees including rent and buying clinic supplies from my pocket and as an intern, I was just being paid 48,000 shillings (US$436.64),” he said.
His business would be severely tested when he was transferred to Nyeri Provincial Hospital, some 150 km northeast of Nairobi, in 2012.
However, in December 2012, while travelling to Nairobi to carry out a routine check at the clinic, he was involved in a grisly accident that left his car written off. He was paid Ksh 600,000 (around 5,450 US dollars) as compensation.
After agonizing for a while about buying a replacement vehicle, he eventually chose to instead buy medical equipment, using the full amount to make a down payment for X-ray and ultrasound machines, as well as theater equipment.
“I did not know how they accepted but even in my poor financial status they gave me equipment worth about Sh4 million (US$ 36,427),” he said.
“I was also required to fork out Ksh232, 000 (US$ 2112) monthly as a loan repayment and I had no idea where I was going to get the money. I only had faith that things would work out in my favor,” he explained.
With the new equipment, Okoth hoped to attract patients visiting public hospitals that were within the Ruai neighbourhood.
“I remember the theater was in some small room but it could save a life when the occasion called for it,” he said.
Unfortunately, the business failed to pick up as he had anticipated and he was forced to take another loan from a bank to make the first payment to the medical equipment suppliers.
When he finally got an opportunity to spend time at the clinic, however, he was surprised to find that within 12 hours the books reflected several hundreds of dollars worth of business.
“The team I had employed was telling me no patients were showing up and when the going was good they were only able to record 2,000 shillings (20 US dollars) daily which was a rare occurrence. So I was routinely forced to pay them from my pocket. It’s then that I realized they had been stealing from me,” Okoth said.
Okoth worked out that the staff were under-reporting the clients they had served, so that on many an occasion, he was forced to subsidize the clinic to keep it running – to a point he was about to give up. But on the first day camped there, he saw 20 patients – as opposed to the average six patients the clinic had been reporting.
“So I fired all of them,” he says, ” This was like a rebirth of Ruai Family Hospital. It’s always dark before dawn,” he said.
In June 2014, a month before his internship in Nyeri ended, he received a financial boost from the government-run Youth Development Enterprise Fund (YDEF) which loaned him 1.8 million shillings (some US $16,370). According to Okoth, no-one should be afraid of taking a loan if they have a vision.
“Don’t be scared of risks – because the biggest risks have the biggest rewards,” he said.
A month later the clinic relocated to a bigger space.
“I spoke with the landlord of this premises and he was very kind to us. I also convinced my girlfriend to sell her car. We used the cash to clear our debts and also partition the new building,” he said.
The Ruai Family Hospital occupied three floors of an imposing building in Ruai Town and was the biggest private health facility in the town.
“It was a journey and we were now making ends meet,” said Okoth.
The hospital now had 40 beds and 12 permanent employees and could afford to hire top doctors on an as-needed basis.
“On average, we served 60 patients daily and we were now listed with all major insurance companies in Kenya, including the government-run National Health Insurance Fund (NHIF),” he said.
In 2017 he bought land within Ruai and he began building a landmark hospital in 2019. His celebrated 100-bed RFH Specialist Hospital was born and the name changed to indicate the focus of Okoth’s ambition – while keeping the “DNA” of the early business. Okoth now owns four hospitals, all focused on serving what he calls the “lower mass market.”
“I want RFH to be the next disrupter in healthcare. I see the brand becoming a pan African group. And the biggest challenge in Africa is getting access to health care and mostly not because of location but because of cost and value of health care and that is the disruption we are working towards. I see a continental brand.”
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