Kenya Must Urgently Find New Ways to Fund Public Health Services

By David Khaoya, PhD

Patients wait to be seen at Port Reitz Sub-County Hospital in Mombasa, Kenya. Photo: Arete / Albert Gonzalez Farran for HP+.

Kenya has set ambitious health goals, articulated in various strategy documents such as Vision 2030 and the Kenya Health Policy 2014–2030. The country has also made commitments aligned with global health initiatives such as the Sustainable Development Goals. More recently, the government launched the Universal Health Coverage policy to guide the country’s efforts towards achieving high-quality healthcare for all by 2022. These goals and commitments, however, are cast against a history of insufficient domestic funding for the health sector, which has been heavily supplemented over the years by foreign assistance. Some programs, such as HIV, are nearly fully funded by external resources. However, this financing landscape is now changing, and donor contribution is declining, which means that Kenya needs to pivot if the country is to achieve its health goals. As Kenya looks forward to a new government, it is important that the national health agenda should include securing sustainable, domestic financing for all healthcare.

Globally, donors transition out of countries that attain lower-middle-income economic status because they are considered capable of financing their health systems. Kenya became a lower-middle-income country in 2014 and is set to graduate to middle-income country status by 2030. There has been a gradual decline in total donor contribution to health in Kenya from a high of 35 percent contribution to total health expenditure in fiscal year (FY) 2009/10 to only 18 percent in FY 2018/19.

Bridging the Gap

How can Kenya bridge this resulting gap and what should the priorities of the new government be? The country must urgently find new and innovative ways to finance health services and reduce the cost of care borne by citizens. There is a significant body of evidence that the government can tap into to inform its efforts to increase and safeguard local resources for health services.

For instance, data from the recent 2016/17 to 2018/19 Kenya National Health Accounts (Ministry of Health, forthcoming) show that the government is still the largest financier of health services in Kenya, and that in FY 2020/21, the government allocated 11 percent of its total budget to health, an increase from 7.5 percent in FY 2014/15. In the coming financial years, the government must increase this allocation to at least 15 percent, as recommended in the Abuja Declaration (a commitment made by African Union member states, including Kenya in 2001, to allocate 15 percent of all government budget to health). Given the reality of increasing demand for public funds by other sectors, the government also needs to pursue other ways to mobilize local resources for health, for instance, by tapping into resources available from the private sector.

Furthermore, the incoming national and county governments can implement reforms that enhance the efficiency of the current healthcare service delivery system. There is data available that shows how funds allocated to health by national and county governments are spent, which can inform policy deliberations on the optimal use of resources. Evidence shows that past county governments spent the majority of their funds for healthcare on staff salaries. As a result, while the county governments increased the amounts allocated to health in the annual budgets over the last seven years, from KES 64 billion in FY 2014/15 to KES 133 billion in FY 2020/21, these increases were almost entirely directed to paying staff salaries, significantly limiting funds available for other key inputs to health such as drugs.

Relieving the Burden

Other data from the recent National Health Accounts (Ministry of Health, forthcoming) show that households carry a significant burden of financing healthcare through out-of-pocket payments made while seeking care. In FY 2018/19, households contributed nearly 27 percent of all funds for healthcare in the country, surpassed only by the government which contributed 48 percent.

Research data and other evidence will continue to play an important role as new governments, at national and county levels pursue their agendas. To fully transition Kenya from reliance on donors, it will be key to developing and implementing strategies for sustainable domestic funding for health. To further mitigate the impact of declining donor support, the government should fully implement the Kenya Health Financing Strategy and continue to address weaknesses and inefficiencies in the use of available resources in delivering health services.

David Khaoya is the Kenya and East Africa Country Director of the Health Policy Plus (HP+) project, funded by the U.S. Agency for International Development and implemented by a consortium of partners, led by Palladium. HP+ Kenya supports the national and county governments to generate evidence from budget analyses to inform their policy decisions towards sustainable healthcare financing.



USAID-funded project strengthening and advancing health policy priorities in family planning/reproductive health, HIV, and maternal health

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Health Policy Plus

USAID-funded project strengthening and advancing health policy priorities in family planning/reproductive health, HIV, and maternal health