Equity in health care financing and expenditure in Kenya

Abstract

Health care financing studies in Sub-Saharan Africa, Kenya included have tended to focus on single modes of financing at a time, such as user fees, insurance, government budget, donor funding, or on financing-related issues such as equity and quality of care. Relatively few studies have been conducted to analyze total national health financing or expenditures from all sources and to relate them to their various uses. Not only has less attention been paid to the equity in health care financing and expenditure in Kenya, but also very little research has been done to establish the extent to which public health care financing allocation is equitable.Yet the extent to, and the speed with which the public health sector can redress inequities in health care financing and expenditure can significantly reverse the declining health indicators. It is argued that the National Health Accounts (NHA) framework is a useful framework for answering basic health financing questions and for highlighting policy issues which may otherwise not be evident using more narrowlyfocused approaches. NHA tracks finances from sources to users in the health system as a whole as well as within disease- or intervention-specific sectors (i.e., HIV/AIDS, reproductive health).This study uses the broader framework of National Health Accounts (NHA) to analyze national health expenditures in Kenya and attempts to examine whether the health care resources are equitably allocated to different regions. The study uses data on health status and other socio-economic characteristics to develop distributional estimates of who makes the payment under each financing mechanism, and who receives the benefits of government health subsidies. The results show that there are considerable inequities in the distribution of health care resources in Kenya. The study reveals that a large percentage of the population could not afford the basic health care package in 2001/2002.lt was noted that actual expenditures fall below budgetary allocations. The current resource allocation formula is not in favour of poorer provinces. Thus relative resource allocation to such provinces should be given even greater priority given the large disparity in Human Development Indices. A key factor that has contributed to the slow progress towards equity has been the decline in annual real per capita government budget to the health sector. In some relatively disadvantaged provinces, such as Nyanza and Western provinces, the current resource formula is resulting in allocations, which are below their current spending levels. In order to ensure that budget changes are translated into real equity-promoting resource shifts within provinces and within districts, certain issues need to be urgently addressed. In particular efforts to redistribute financial resources should be accompanied by initiatives' to develop all facets of capacity at decentralised levels.