Analysis of the impact of health expenditures on key health indicators in Kenya

Abstract

This research paper analyses the impact of health expenditures on key health indicators in Kenya over the period 1975-2004. The study estimates the aggregate health production function. T he variables used a re government health expenditures p ercapita, percentage private health expenditures, expenditures on education percapita, percentage population with access to safe water, under five-mortality rate and life expectancy. The study attributes the declining health indicators to insufficient spending by the government and the inadequacies of the private health sector in financing health care in Kenya. The main objective was to statistically test the nature and the significance of the relationship between health indicators and health expenditures. The findings of the study indicate a strong contribution to health indicators by the health expenditures both private and public, access to safe water and education. The influences of the services that are dependent to consumer demand are more difficult to identify both for preventive services, such as immunization and for curative medical care. The study recommends that the resources must be channeled towards primary and preventive health care as well as boosting the private health sector. It recommends that the government should s top directing more resources to areas with no direct effect on social welfare. The government should encourage the role of local authorities in education and health and this should be clearly denied. The private health care provision should also be streamlined and regulated by the government so as to act as checks and balances in their role 0 f health care provision. T he government should specifically do something about the supply - induced demand common in private health sector that leads to the consumers being exploited and thus worsening health indicators.