Effect of out-of-pocket Health Expenditure on Utilization of Healthcare in Kenya

Abstract

Healthcare services utilization is essential for wellbeing and reduction of both morbidity and mortality. Healthcare services utilization is dependent on the mode of healthcare financing. Accordingly, understanding how Out-Of-Pocket (OOP) expenditure on health, as a healthcare financing model, influences the utilization of healthcare services is key to enhancing healthcare financing and achieving Universal Healthcare Coverage (UHC). Using the Endogenous Switching Regression Model (ESRM) to analyze data obtained from the Kenya Household Health Expenditure and Utilization Survey (KHHEUS) conducted in 2018, the study sought to elucidate the factors influencing OOP expenses and their subsequent impact on the utilization of healthcare services in Kenya. This study found that proximity to healthcare facilities, rural residence, formal employment as well as the level of education impacting OOP healthcare expenses. This is in concurrence with Andersen's behavioral theory of healthcare utilization, which emphasizes the influence of sociocultural factors on healthcare-seeking behavior. Moreover, the study revealed that individuals accessing inpatient care incur higher OOP healthcare expenses, primarily due to longer hospital stays and more complex medical interventions associated with inpatient care. The second phase of the ERM analysis that explored the effect of OOP expenditures on healthcare utilization established a negative correlation between OOP healthcare expenses and healthcare utilization. This implies that OOP healthcare expenses decrease the likelihood of seeking healthcare services, holding other factors constant. OOP healthcare expenditures hinder individuals from seeking healthcare services. There is a need for effective financial protection to cushion individuals from OOP healthcare expenditures but also improve accessibility to healthcare facilities, improve people’s social-economic status through education and employment to further buttress healthcare services utilization and wellbeing.