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Transparency and Accountability in Kenya’s Health Financing Models

In August 2010, Kenya adopted a new constitution that created a devolved system of governance that consists of National Government and 47 County (sub-national) Governments. Under the new dispensation, health is a devolved function that is shared across the two levels. The responsibility for health service delivery is assigned to the Counties while policy, quality assurance, capacity building and management of national referral hospitals remain the national’s government responsibility. In 2017, the government of Kenya made a commitment of accelerating its progress to achieving Universal Health Coverage (UHC) by 2022 and has taken a number of steps to reform the healthcare system towards achieving this goal.

Globally, the United Nations 2030 Agenda for Sustainable Development identified 17 Sustainable Development Goals (SDGs), to succeed the Millennium Development Goals (MDGs) and to be achieved by 2030. Attainment of good health and well-being is SDG 3, with target 3.8 spelling out the need to achieve Universal Health Coverage (UHC), including financial risk protection, access to quality essential health services, and medicines and vaccines for all.

The Constitution, under the Bill of Rights puts a responsibility on the State to ensure equitable, affordable and quality health care to all Kenyans. Despite these Constitutional requirements and safeguards for the right to health services, there continues to be persistent inadequacies in the health sector that have faced Kenya since independence largely due to stagnant or declining budgets for health, system inefficiencies, human resource deficiencies, and unaffordable quality health services. Transparency and Accountability especially on resources for the Health sector has also been wanting.  It is in view of these shortcomings that the need to assess the effectiveness of health financing models in Kenya was necessary.

There are six major sources of financing health care in Kenya:

  1. Tax-based financing: Financing of healthcare using tax revenues through the ministry of health.
  2. Social health insurance (NHIF): Pay roll-based contributions by the formally employed and voluntary contributions by those in the informal sector. The government also provides funds to NHIF to provide coverage for different population groups.
  3. Private health insurance: Voluntary contributions as well as employer-based groups
  4. Community-based health insurance
  5. Donor funding
  6. Out-of-pocket payments: payments made at the point of care.

Key findings on Health Financing Models in Kenya:

  1. Allocation to health by the government has been declining with an average of 4.5% in the last 3 years, way below the proposed 15% in the Abuja Declaration.
  2. Despite legal requirements for the different health sector players to enhance mechanisms to ensure ease of access to information by the public, most institutions and counties do not have core information such as funds allocations, disbursements and expenditures accessible to the public. There is very little information on NHIF reimbursements for claims available to the public. This applies to institutions such as KEMSA that are tasked with providing core services to the health sector.
  3. A number of health policy interventions in Kenya are largely driven by policymakers with very little public participation. One such example is the Medical Equipment Scheme (MES) which was designed and executed by the National Government with very little participation by the counties and the public in general. This has resulted in very low utilisation of the leased equipments largely due to lack of required infrastructure and human resource.
  4. Both NHIF and private health insurance companies have registered higher reimbursements to Private facilities and very low reimbursements to public facilities. This has served to increase inequity in access to healthcare in Kenya largely due to low financial flows to public facilities which are their primary source of care for majority of the Kenyan poor. Moreover, the services in Private facilities are more expensive compared to pubic facilities. This to a large extent raises sustainability concerns especially as the government moves to ensure coverage for all.

Based on the findings of this review, there is no perfect model of financing healthcare in Kenya so far.  Most countries use a mix of two or more financing models to fund healthcare.  To  develop a sustainable health financing model for Kenya, there is need to  work on an essential benefit package of health services while  putting in place strategies to cushion the poor through subsidy programs. There is also need to ensure that public funds  are primarily invested in public goods. This can be achieved through establishment of an enabling environment, enhanced public participation and access to information to enhance oversight mechanisms and value for money. It is  important for the government to invest more in preventive and promotive healthcare interventions as they derive more value for money.  Financing healthcare should always be viewed as an investment towards a healthy and productive population who provide  the human capital towards economic growth of a nation.

Report on Study – Transparency and Accountability in Kenya’s Health Financing Models