The economics of prepaid health services

Abstract

Good health is a prerequisite to economic a development of any nation. This is because it increases availability of labor and productivity, saves recurrent resources and accelerates exploitation of natural resources. Though this is true, health services are inaccessible to most people in rural Kenya. The main reason being that the tax revenue is not adequate to finance health services for everyone.

The main aim of this study was to explore the possibility of using agricultural cooperative unions as an alternative health financing strategy. This was done by conducting an empirical study of households' willingness to join a cooperative Health programme (CHP) in a rural area in Kenya.

There are three main findings of this study: (1) At higher levels of premium that cooperative members would have to pay to join CHP; income remains the sole determinant of whether a cooperative member would enroll in CHP. (2) As the premium increases, the number of cooperators willing to enroll into CHP decreases. (3) Although CHP is cost-effective from the cooperative members perspective, it is not economically viable at premiums that the majority of cooperative members can afford to pay.