Gertrude’s Children’s Hospital has become the latest healthcare institution to expand its capacity as service providers seek to tap into the growing middle class, with a Sh500 million investment.

The hospital has set up a new building at its Muthaiga branch that will expand its bed capacity from 83 to 103 and

offer new services like heart surgeries and specialised burns treatment.

Its expansion follows Nairobi Hospital’s multi-million-shilling investment in a new cancer treatment unit last year and Aga Khan Hospital’s investment in a similar facility in 2011.

“The private sector is stepping in to meet the high demand for healthcare in the country,” said Gordon Odundo, the CEO of Gertrude’s.

“This investment enables us to offer new services, increase capacity, and acquire better equipment,” he said.

Dr Manu Chandaria, one of Kenya’s leading philanthropists, has donated Sh25 million to Gertrude’s to fund the project and has committed to disburse a total of Sh100 million to the hospital in the short-term.

The facility, named The Chandaria Medical Centre, is expected to be complete in March and offer services to the hospital’s target base of young patients in Kenya and the region.

Aggressive expansion of private hospitals has been linked to a rising spend on healthcare by the country’s middle class as government hospitals suffer from congestion and frequent strikes.
This has seen charitable trusts and private equity firms increase their investments in the healthcare market with a view to promote social welfare and earn returns.

Research firm Business Monitor International (BMI) says growth in Kenya’s healthcare sector is being driven by population growth and increased awareness of preventative healthcare.

The country is also recording rising incidents of illnesses such as malaria and diseases of the respiratory systems.

“In comparison to many other African markets ...  Kenya offers more commercial promise and a more stable overall business environment,” BMI said in a research note.

The research firm estimates that the local healthcare sector grew 14.1 per cent to Sh167.4 billion in 2011 compared to Sh146.7 billion the year before.

While several private hospitals are focused on breaking even rather than making profits, the rising demand from middle class households has seen them post surpluses.