U.S. Senate Republicans set repeal vote as healthcare overhaul sinks

FILE PHOTO - U.S. Senate Majority Leader Mitch McConnell speaks to the media about plans to repeal and replace Obamacare on Capitol Hill in Washington, DC, U.S. on June 27, 2017. REUTERS/Aaron P. Bernstein/File Photo

By Susan Cornwell

WASHINGTON (Reuters) – U.S. Senate Republican leader Mitch McConnell set a vote on a straight repeal of Obamacare after efforts to overhaul the healthcare law collapsed, but the new approach unraveled within hours on Tuesday in a sharp setback for President Donald Trump and his Republican Party.

The disarray in the Republican-controlled Senate rattled financial markets and cast doubt on the chances for getting Trump’s other domestic policy priorities, such as tax reform, through a divided Congress.

Repealing and replacing Obamacare has been a top Republican goal for seven years, and Trump made the promise a centerpiece of his White House campaign. The overhaul’s failure calls into question not only his ability to get his agenda through Congress but that of the Republican Party to govern effectively.

Saying he was disappointed, Trump told reporters at the White House that “we’re probably in that position where we’ll just let Obamacare fail.”

“We’re not going to own it, I’m not going to own it. … Republicans are not going to own it. We will let Obamacare fail, and then the Democrats are going to come to us,” he said.

McConnell gave up on efforts to overhaul the 2010 Affordable Care Act late on Monday after it became clear he did not have the votes. Instead, he announced plans to vote in coming days on a two-year transition to simply repeal the healthcare law with no replacement.

“We will now try a different way to bring the American people relief from Obamacare,” McConnell said on Tuesday as he opened the Senate, where the Republicans hold a razor-thin 52-48 majority. “I think we owe them at least that much.”

But Republican Senators Shelley Moore Capito of West Virginia, Susan Collins of Maine and Lisa Murkowski of Alaska quickly announced they would not back repeal, dooming the fledgling effort. With Democrats united in opposition, Republicans can only afford to lose two votes to pass the measure in the Senate.

(Writing by John Whitesides; Additional reporting by Caroline Humer in New York and Ginger Gibson, Richard Cowan in Washington; Editing by Tom Brown, Nick Zieminski and Jonathan Oatis)

More hospital closings in rural America add risk for pregnant women

Dr. Nicole Arthur (R), visits Tariyana Wiggins, a high school teacher, shortly after the birth of Troy O’Brien Williams in the hospital room at the North Baldwin Infirmary, a 70-bed hospital in rural Bay Minette, Alabama, U.S. on June 22, 2017. REUTERS/Jilian Mincer

By Jilian Mincer

Bay Minette, Alabama (Reuters) – Dr. Nicole Arthur, a family practice physician, was trained to avoid Cesarean deliveries in child-birth, unless medically necessary, because surgery increases risks and recovery time.

But she has adjusted her approach since arriving last year at the 70-bed North Baldwin Infirmary in rural, southern Alabama.

Low patient admissions and high costs mean the hospital does not have doctors on site around-the-clock to administer anesthesia in the case of an unexpected emergency Cesarean.

As a result, Dr. Arthur performs the surgery if there are any signs of complication, rather than waiting and running the risk that comes with the 20 to 30 minutes it takes for an anesthesiologist to arrive in the middle of the night.

“It’s better for me to do a C-section when I suspect that something may happen,” she said of her new strategy. “Getting the baby out healthy and happy outweighs some of the risk.”

Physicians in rural communities across America are facing the same tough choices as Dr. Arthur. Hospitals are scaling back services, shutting their maternity wards or closing altogether, according to data from hospitals, state health departments, the federal government and rural health organizations.

Nationally, 119 rural hospitals that have shut since 2005, with 80 of those closures having occurred since 2010, according to the most recent data from the North Carolina Rural Health Research Program.

To save on insurance and staffing costs, maternity departments are often among the first to get shuttered inside financially stressed rural hospitals, according medical professionals and healthcare experts.

“It’s been a slow and steady decline,” said Michael Topchik, the National Leader for the Chartis Center for Rural Health, about maternity ward closings. “It’s very expensive care to offer, especially when it’s lower volume.”

More than 200 maternity wards closed between 2004 and 2014 because of higher costs, fewer births and staffing shortages, leaving 54 percent of rural counties across the United States without hospital-based obstetrics, data from the University of Minnesota’s Rural Health Research Center show.

The trend has escalated recently even though the national healthcare law, known as Obamacare, was designed in part to help rural hospitals thrive. But unpaid patient debt has risen among rural hospitals by 50 percent since the Affordable Care Act was passed, according to the National Rural Health Association, especially in states that decided not to expand Medicaid – the state and federal insurance program for the poor.

The outlook for these hospitals was not poised to improve had Congress approved legislation to replace Obamacare. Senate Republicans’ proposed cuts to Medicaid would have pushed about 150 more rural hospitals into the red, according to the Chartis Center for Rural Health, mainly in states that voted Republican in the last election.

But late on Monday, Senate Majority Leader Mitch McConnell said the Republican effort to repeal and immediately replace Obamacare will not be successful, after two of McConnell’s Senate conservatives announced that they would not support the bill.

PAIN FELT BEYOND THE BELTWAY

The consequences go beyond politics.

When local doctors and midwives leave town, rural women lose access to essential services. Many skip or delay prenatal care that could prevent complications, premature birth or even death. The U.S. infant mortality rate is among the highest in developing countries at 5.8 deaths per 1,000 births.

Pregnant woman in rural areas are more likely to have their deliveries induced or by Cesarean section that, while potentially life-saving, are more expensive and risky than a normal vaginal birth, according to patients, medical professionals and researchers.

Almost a year after her second son’s birth, Courtney Cross is still repaying money she borrowed because of the smaller paychecks and larger gas bills she had from driving 60 minutes each way to a specialist in Mobile, Alabama.

“There were some days I had to reschedule because of the money factor,” said Cross, a medical technician and mother of two, who some months made the trip multiple times. “I had to make money.”

Cross is not alone. The most common reasons for the hospital closures are people and money. More and more people are moving to urban areas in pursuit of work and a better paycheck. And in most states, lower revenue from insurance and U.S. government payments are pushing these hospitals into financial stress, particularly in states that did not build out their Medicaid programs as Obamacare allowed.

“The majority of births in rural America are paid for by Medicaid, and Medicaid is not the most generous payer,” said Diane Calmus, government affairs and policy manager for the National Rural Health Association. “For most hospitals it is a money losing proposition.”

This is the main reason why Connie Trujillo shuttered her midwife practice this spring in Las Vegas, New Mexico. The local hospital had closed its maternity ward, and the closest hospital to deliver babies was at least 60 miles away. She sees more elective inductions because the patients live far away and can’t afford to go back and forth.

“Some of them just don’t have the resources,” she said. A year after shuttering, the hospital is trying to hire additional staff to reopen the ward.

MORE SCHEDULED DELIVERIES

The number of induced U.S. deliveries nationally has doubled since 1990 to about 23.3 percent, but rates are significantly higher in rural areas, where it is routinely offered to women traveling long distances, especially if the weather is bad.

Induced labor and surgery come at a high cost. Commercial insurance and Medicaid paid about 50 percent more for Cesarean than vaginal births, according to a 2013 Truven Health Analytics report. The report said Medicaid payments for maternal and newborn care for a vaginal birth was $9,131 versus $13,590 for a C-section.

In largely rural West Virginia – where the Summersville Regional Medical Center became the latest hospital to stop delivering newborns earlier this year – elected inductions for first time mothers rose to 28.7 percent in 2015 from 24.1 percent in 2011, according to data provided to Reuters by the West Virginia Perinatal Partnership, a statewide effort to improve care.

“Inductions allow the physicians to manage their case loads and timing of deliveries,” said Amy Tolliver, director of the Perinatal Partnership. “We know that inductions are happening in small hospitals that have difficulty with staffing.”

To address staffing issues at Dr Arthur’s hospital in Alabama, the facility paid temporary doctors for a year to keep the department open when one of its two maternity doctors stopped doing deliveries.

“It’s important to have access (to obstetrics),” said hospital president Benjamin Hansert, who also organized a group of doctors from Mobile about 40 minutes away to cover some of the shifts so that staff doctors would not always be on call. “Where the mother goes for care, the rest of the family will follow.”

For the full graphic on hospital closures, click http://tmsnrt.rs/2us7qDM

(Editing by Caroline Humer and Edward Tobin)

Outbreak of hantavirus infections kills three in Washington state

A micrographic study of liver tissue seen from a Hantavirus pulmonary syndrome (HPS) patient seen in this undated photo obtained by Reuters, July 6, 2017. Centers for Disease Control and Prevention/Handout via REUTERS

By Laura Zuckerman

(Reuters) – Five people have been stricken with the rare, rodent-borne hantavirus illness in Washington state since February, three of whom have died, in the state’s worst outbreak of the disease in at least 18 years, public health officials reported on Thursday.

The three fatal cases also mark the highest death toll from hantavirus pulmonary syndrome in Washington state during a single year since the respiratory ailment was first identified in the “Four Corners” region of the U.S. Southwest in 1993.

The disease has been found to be transmitted to humans from deer mice, either through contact with urine, droppings, saliva or nesting materials of infected rodents or by inhaling dust contaminated with the virus.

Victims in the latest outbreak were men and women ranging in age from their 20s to their 50s from four counties across the state, said David Johnson, spokesman for the Washington State Department of Health.

The first diagnosed case this year was in February and the most recent was last month, when the infection killed a resident of Spokane County in the eastern part of the state near Washington’s border with Idaho. Three of the five cases, including another one that proved fatal, were confirmed in the Puget Sound region of King and Skagit counties.

The only common factor among those infected by the disease, which typically kills more than a third of its victims, is that they were all exposed to infected mice, Johnson said.

The last time five confirmed hantavirus cases were diagnosed in Washington state in a single year was in 1999, although just one of those proved fatal, Johnson said.

Washington has reported 49 of the 690 hantavirus cases tallied nationwide from 1993 to January 2016, ranking fifth among 10 Western states that account for the bulk of all documented infections, according to the federal Centers for Disease Control and Prevention (CDC) in Atlanta.

Eighteen infections with four deaths were reported nationally in 2015. The year before, the CDC counted 35 cases, of which 14 were fatal.

The most highly publicized hantavirus outbreak occurred in 2012, when 10 visitors to Yosemite National Park in California were diagnosed with the infection, three of whom died, prompting a worldwide alert. All but one of those were linked to tent cabins later found to have been infested by deer mice.

(Editing by Steve Gorman; Editing by Paul Tait)

Wall St. at record highs on technology, health stocks strength

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., June 2, 2017.

By Sinead Carew

NEW YORK (Reuters) – U.S. stocks rose on Monday, with the S&P 500 and the Dow Jones Industrial Average hitting record highs helped by a technology sector rebound and strength in healthcare and financial stocks.

Nasdaq’s biotechnology index rose 2.5 percent and was on track for its biggest one-day gain since February helped by stocks including Biogen Inc and Clovis Oncology while the S&P’s healthcare index  hit a record high.

The S&P technology sector was up 1.4 percent after its second straight weekly decline, which was triggered by fears of stretched valuations. Tech stocks have led the S&P 500’s 9.4 percent rally this year.

“(Technology) valuations are not cheap but it doesn’t seem to be a deterrent for buyers,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “Investors were temporarily chased from the space but many companies in the sector offer growth which is difficult to find in the market as a whole.”

Apple rose 3.8 percent to $146.07, providing the biggest boost to technology followed by Microsoft, Alphabet and Facebook.

The financial sector was also one of the benchmark’s strongest gainers with a 0.9 percent rise after New York Federal Reserve President William Dudley, a close ally of Fed Chair Janet Yellen, said U.S. inflation was a bit low but should rise alongside wages as the labor market continues to improve, allowing the U.S. central bank to continue gradually tightening monetary policy.

Yellen’s confidence as her team raised interest rates for the third time in six months last week surprised investors who had expected more caution about the economy following a set of weak U.S. economic data.

“That was notable in supporting the financial sector which does well under the prospects of better economic conditions and a steeper yield curve,” said Luschini.

The S&P 500 bank subsector was up 1.3 percent

At 2:48 P.M. (1848 GMT), the Dow Jones Industrial Average was up 119.2 points, or 0.56 percent, to 21,503.48, the S&P 500 had gained 16.44 points, or 0.68 percent, to 2,449.59 and the Nasdaq Composite had added 74.33 points, or 1.21 percent, to 6,226.08.

Biogen shares were one of the top three S&P percentage gainers with a 3.96 percent rise to $261.71, after it was upgraded to “neutral” from “sell” at UBS, which raise its price target to $270 from $262.

Shares of Clovis Oncology were up 46.9 percent at $88 after late-stage data on its already approved ovarian cancer drug.

The S&P tech sector is trading at about 18.7 times forward earnings, compared with the historical 10-year average of 14.5, according to Thomson Reuters Datastream.

Advancing issues outnumbered declining ones on the NYSE by a 1.68-to-1 ratio; on Nasdaq, a 1.92-to-1 ratio favored advancers.

The S&P 500 posted 49 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 99 new highs and 87 new lows.

(Additional reporting by Tanya Agrawal, Chuck Mikolajczak and Lewis Krauskopf; Editing by Saumyadeb Chakrabarty and James Dalgleish)

Anthem to leave Ohio’s Obamacare insurance market in 2018

FILE PHOTO: A sign at the office building of health insurer Anthem is seen in Los Angeles, California February 5, 2015. REUTERS/Gus Ruelas/File Photo

By Caroline Humer

(Reuters) – Anthem Inc, which has urged Republican lawmakers to commit to paying government subsidies for the Obamacare individual health insurance system, on Tuesday announced it would exit most of the Ohio market next year.

The high-profile health insurer, which sells Blue Cross Blue Shield plans in 14 states including New York and California, for months has said that uncertainty over the payments used to make insurance more affordable could cause it to exit markets next year.

Anthem CEO Joseph Swedish two weeks ago reiterated that the company was reviewing its participation in the individual markets that are a key piece of the Affordable Care Act, commonly called Obamacare.

Republican lawmakers and President Donald Trump have promised to repeal and replace the law, but have disagreed over the details, creating uncertainty at a time when insurers must submit plans and premium rates for 2018.

In addition, Republicans are trying to cut off these Obamacare subsidy payments in court proceedings and President Donald Trump has made conflicting statements about continuing paying them.

Insurance departments across the country have reported that insurers have submitted premium rate increases of up to 50 percent and 60 percent or even higher for 2018.

Anthem attributed the Ohio decision to volatility and uncertainty about whether the government would continue to provide cost-sharing subsidies. It said it would continue to sell Obamacare compliant plans outside of the exchange in Pike County, Ohio as well as other individual plans that were grandfathered when the law went into effect.

Anthem is the only insurer selling health insurance exchange products in all 88 Ohio counties in 2017 and the only insurer in 20 counties, according to Ohio Department of Insurance spokesman Chris Brock.

In 2018, the move would leave about 10,500 people in at least 18 counties with no insurer.

“Congressional action is needed to restore stability,” Brock said. The insurance department is looking for options for those affected, he said.

Other large health insurers have also pulled out for 2018, including Aetna Inc and Humana Inc, leaving other areas facing the possibility of no insurer.

Anthem’s decision was made as rate filings were due to the state and after discussions with the insurance department.

“States can beg and plead, but much of this is out of their hands,” said Larry Levitt, health economist at the Kaiser Family Foundation.

Anthem shares rose $1.19, or 0.64 percent, to $187.88 in early afternoon trading.

(Reporting by Caroline Humer in New York; editing by Jeffrey Benkoe and Andrew Hay)

WHO says India reports cases of Zika virus

FILE PHOTO: Aedes aegypti mosquitoes are seen inside Oxitec laboratory in Campinas, Brazil, on February 2, 2016. REUTERS/Paulo Whitaker/File Photo

NEW DELHI (Reuters) – India has reported cases of the Zika virus, the World Health Organization said, adding that efforts should be made to strengthen surveillance.

The WHO said that on May 15 India’s health ministry reported three confirmed cases from the western state of Gujarat. Cases were detected during testing in February and November last year, while one was detected in January this year, according to the statement, which was released on Friday but did not gain public attention until Saturday.

A federal health ministry official said states were following standard protocols and there was “nothing to worry” about. The ministry had in March cited one confirmed case of Zika – from January of this year in Gujarat – while answering a question in India’s parliament.

“These findings suggest low level transmission of Zika virus and new cases may occur in the future,” the WHO said in the statement on its website.

“Zika virus is known to be circulating in South-East Asia Region and these findings do not change the global risk assessment.”

In its most recent outbreak, Zika, which is mainly a mosquito-borne disease, was identified in Brazil in 2015 and has been spreading globally.

When the virus infects a pregnant woman, it can cause a variety of birth defects including microcephaly, where the baby’s head is abnormally small.

(Reporting by Aditya Kalra; Editing by Tom Lasseter and Andrew Bolton)

‘War on sugar’ takes toll; Asia, Brazil struggle to make up shortfall

FILE PHOTO: A worker checks the flow of sugar inside the Gandavi sugar factory, 165 km (102 miles) south of Ahmedabad, India, March 26, 2012. REUTERS/Amit Dave/File Photo

By Ana Ionova and Chris Prentice

LONDON/NEW YORK (Reuters) – The “war on sugar” being waged by governments and consumers to combat public health emergencies like diabetes is slowing growth in global demand, which along with other factors could signal a fundamental shift in consumption ahead.

Consumption may grow at its slowest pace in seven years in 2017/18, according to analyst group Platts Kingsman. It forecasts a rise of 1.04 percent, nearly half the average growth of about 2 percent per year over the last decade.

“Consumption is generally stagnating in developed countries,” Tom McNeill, director at commodity analyst group Green Pool, told Reuters.

Falling consumption in more health-conscious markets has been exacerbated by higher prices and the use of alternatives like high-fructose corn syrup in developing countries that might otherwise have made up the shortfall.

Combined with weaker demand from food and beverage makers globally, this could represent a “step-change lower” – or a fundamental shift – in global consumption, according to Tropical Research Services.

“So, it may be that the real long-term ‘trend’ rate of global sugar demand growth has changed and is now lower,” the group said in a May 7 report.

At least 17 countries and a number of U.S. cities have added an extra tax on sweetened beverages. Another 11 nations are implementing or considering similar levies.

Many are going further: France has coupled a tax with measures like banning vending machines in schools. Chile last year introduced black stop-sign warning labels on foods high in sugar, salt and fat.

Mexico is another example. With one in three adults in the country affected by obesity, the country slapped a levy on sweetened soft drinks in 2014.

Although the impact on health will take years to assess, early data shows consumption of soft drinks in Mexico has fallen by 12 percent since the tax was introduced.

“There is an increasing understanding for the need to control intake of free sugars, in public policy and in culture in general,” said Francesco Branca, director of nutrition for health and development at the World Health Organization.

“With obesity and diabetes very quickly spreading, they are trying to do something about it early on.”

The slowing pace of growth globally is adding to worries the world sugar market is headed for a surplus in 2017/18, after two consecutive deficits. [nL5N1H03Y2]

It could also curtail ambitious plans by the European Union to sharply boost output in 2017/18 in an effort to again become a net exporter, after it ends subsidies and caps on exports in October. [nL5N1H03Y2]

INDIA, CHINA AND BRAZIL

High-income countries like Norway and Canada are already seeing a decline in sugar consumption, Euromonitor figures shows. Now the appetites of developing markets, whose rapid population growth was expected to drive future growth, also appear to be waning.

Sugar sales in India, the world’s biggest consumer, are set to fall by roughly 1 million tonnes this season, the Indian Sugar Mills Association (ISMA) estimates, due to higher domestic prices and a cash crunch that followed last year’s demonetisation of high-value bank notes. [nL8N1HX4HV]

The government’s decision earlier this year to abolish a sugar subsidy for poor families also dented consumption.

ISMA expects consumption to rebound next year as production in the country normalizes and domestic prices come down, but analysts say long-term growth remains uncertain as the government mulls higher taxes and stricter labeling on sugary foods. [nL3N1GT3TU]

“If India also jumps on the bandwagon with such a levy, as the world’s biggest sugar consumer, this could be felt in global growth,” said Stefan Uhlenbrock, senior analyst at F.O. Licht.

Sugar demand also seems to be stagnating in China, the second biggest consuming country, as cheaper sweeteners like high-fructose corn syrup (HFCS) grow in popularity.

Chinese beet and cane farmers rely on state support to offset steep production costs. Imports, meanwhile, are subject to hefty duties meant to protect the industry, with an additional tariff introduced just this week. [nL4N1IO1J8]

As a result, domestic sugar prices are around double those on the world market. This, coupled with an abundance of cheap corn, has made HFCS highly competitive.

The USDA last month highlighted the decline in Chinese sugar demand when it slashed its estimates for consumption in that country for 2015/16 and 2016/17 by roughly 10 percent and signaled more modest growth than previously expected.

“People in China are still eating ice cream and drinking soft drinks,” said John Stansfield, analyst at commodity trader Group Sopex.

“It’s just the fact that these products are now increasingly made from corn syrup rather than sugar.”

Brazil, the world’s third largest consuming nation, has also seen demand growth slow over the last three years as an enduring recession slashed the incomes of many Brazilians. Consumption was growing at roughly 2-3 percent over the previous decade.

SODA AND CONFECTIONARY

Manufacturers seem to think the anti-sugar movement is here to stay, and many food and beverage companies are pre-emptively reformulating their products as a result.

Coca-Cola <KO.N> has committed to reducing sugar in its drinks, with more than 200 reformulation initiatives underway. [nL4N1CW3UT]

PepsiCo <PEP.N> also said that by 2025 at least two-thirds of its drinks globally will have 100 calories or fewer from added sugar per 12-oz serving. [nL1N1CK13C]

Nestle <NESN.S> said in 2016 it is developing technology to reduce sugar in some confectionary products by up to 40 percent without affecting the taste. [nL8N1DW1D3]

“Globally, sugar is in the spotlight,” said Sara Petersson, nutrition analyst at Euromonitor. “The regulations are increasing with time. And if they’re being smart, they’re going to tackle this in advance.”

(Editing by Nigel Hunt, Veronica Brown and Sonya Hepinstall)

Scientists to test whether Zika can kill brain cancer cells

FILE PHOTO - Genetically modified male Aedes aegypti mosquitoes are pictured at Oxitec factory in Piracicaba, Brazil, October 26, 2016. REUTERS/Paulo Whitaker

By Kate Kelland

LONDON (Reuters) – Scientists in Britain plan to harness the Zika virus to try to kill brain tumor cells in experiments that they say could lead to new ways to fight an aggressive type of cancer.

The research will focus on glioblastoma, the most common form of brain cancer, which has a five-year survival rate of barely 5 percent.

Zika causes severe disability in babies by attacking developing stem cells in the brain – but in adults, whose brains are fully formed, it often causes no more than mild flu-like symptoms.

In glioblastoma, the cancer cells are similar to those in the developing brain, suggesting that the virus could be used to target them while sparing normal adult brain tissue.

Experts say existing treatments have to be given at low doses to avoid damaging healthy tissue.

Researchers led by Harry Bulstrode at Cambridge University will use tumor cells in the lab and in mice to assess Zika’s potential.

The mosquito-borne virus has spread to more than 60 countries and territories in a global outbreak that was first identified in Brazil in 2015.

“Zika virus infection in babies and children is a major global health concern, and the focus has been to discover more about the virus to find new possible treatments,” Bulstrode said in a statement.

“We’re taking a different approach, and want to use these new insights to see if the virus can be unleashed against one of the hardest-to-treat cancers …

“We hope to show that the Zika virus can slow down brain tumor growth in tests in the lab,” Bulstrode added. “If we can learn lessons from Zika’s ability to cross the blood-brain barrier and target brain stem cells selectively, we could be holding the key to future treatments.”

(Editing by Louise Ireland and Kevin Liffey)

U.S. suspends aid to Kenyan health ministry over corruption concerns

FILE PHOTO: A riot policeman stands guard as doctors chant slogans after their case to demand fulfilment of a 2013 agreement between their union and the government that would raise their pay and improve working conditions, was heard at the employment and labour relations courts in Nairobi, Kenya, February 13, 2017. REUTERS/Thomas Mukoya/File Photo

By Katharine Houreld

NAIROBI (Reuters) – The U.S. government has suspended $21 million in direct aid to Kenya’s Ministry of Health amid concern over corruption, the embassy said on Tuesday, giving emphasis to an issue that is a growing liability for the government before August elections.

Support for HIV drugs and other health programs outside the ministry would continue, the embassy said, adding that the United States invests more than $650 million on health in Kenya annually.

“We took this step because of ongoing concern about reports of corruption and weak accounting procedures at the Ministry,” the statement from the embassy said. “We are working with the Ministry on ways to improve accounting and internal controls.”

The announcement adds weight to a rising number of scandals plaguing the government of President Uhuru Kenyatta, who is seeking a second and final five-year term in presidential, parliamentary and local elections on Aug. 8.

The so-called Afya House scandal, named after the building housing the Ministry of Health, was based on an audit report leaked to Kenyan media in October.

The audit showed the ministry could not account for 5 billion Kenyan shillings ($49 million) and funds meant for free maternity care had been diverted, newspapers reported.

Officials at Kenya’s anti-corruption commission did not return calls seeking comment on Tuesday, but the ministry of health issued a statement.

“The ministry has been raising matters raised in the internal audit investigations following the Quality Assurance audit by the National Treasury,” the statement said.

“Other autonomous institutions … are undertaking independent investigations.”

Last year, Kenya’s anti-graft chief told Reuters that a third of its state budget – the equivalent of about $6 billion – was lost to corruption every year.

The government disputed the figure, blaming poor paperwork. In October, Kenyatta infuriated voters by telling them he could not tackle corruption because his “hands were tied”. He criticized the judiciary and other agencies for not doing more about the problem.

Kenyan doctors and nurses say the corruption means that hospitals are often left without basic equipment, from drugs to gloves. Kenyan doctors in public hospitals went on strike from December to March, demanding a pay increase and improved working conditions.

(Editing by Larry King)