The determinants of public health care expenditure in Kenya

Abstract

There is extensive literature on the determinants of health expenditure in OEeD countries, but the same is not true for developing countries. Kenya being a developing country experiences the same. The main purpose of this study is to investigate determinants of health care expenditure in Kenya. This study discusses the theoretical literature related to public expenditure theory, a dynamic theory of public spending and the Baumol model. The study reviews empirical literature and local research on health care expenditure. The study used descriptive study where the researcher gathered data from the published statistics and accounts from economic surveys and strategic plan from the Ministry of Finance and the Ministry of Health. This study also used secondary data which was obtained from economic surveys of Kenyan health care expenditure. Ratio analysis and various models were used to analyze the secondary data collected from 1983 to 2012. The study found that GDP and external funding have a significant int1uence on the Public health expenditure in Kenya. It found that; a unit change in GDP results in 0.011 units increase in Public health expenditure while a unit changes in external funding results in - 0.304 units decrease in Public health expenditure. Population age structure and technological progress are also significant when t - statistics is used. One unit change in population age structure results in 0.0000007 increases in Public health expenditure in Kenya while a unit change in technological progress results in l.747 unit increase in Public health expenditure in Kenya.