An empirical model of access to health care, health care expenditure and impoverishment in Kenya: learning from past reforms and lessons for the future
Discussion paper, Number 3/2006
In the early 70s, Kenya basically had a predominantly tax-funded health system, but then gradually introduced a series of health financing policy changes. In particular user charges for health services were introduced in 1989. Today, these user fees still exist and their impact on health care access has been the subject of several empirical studies. A National Hospital Insurance Fund (NHIF) was also introduced but this was only compulsory for the formal sector workers and has been associated with an inadequate insurance benefit package. However, in November 2004, a new health financing reform was adopted in Parliament, involving the establishment of National Social Health Insurance Fund (NSHIF) with the intent to cover all of the Kenyan population. An overview of health financing reform in Kenya is given in section 2.
The implementation of a well run and effective NSHIF will be a formidable challenge. The main objective is to grant all population groups, including the poor, access to a comprehensive benefit package of inpatient and outpatient health services. In addition, any remaining out-of-pocket payments for insured health services, i.e. co-payments, should not be such that households remain confronted with catastrophic health care expenditures or fall into poverty.
The empirical research undertaken in this paper focuses on the impact of the Kenyan health financing system in the year 2003 on access to care and health spending. It will also shed light on the extent to which the prevailing system impoverished the population, as a result of the lack of a functional which there were waiver and exemption mechanisms built into the user fee system, at least on paper, which did not work in practise for various reasons. Research methods and data are discussed in section 3. We present the empirical results in section 4. These results will help to formulate a number of key lessons for Kenyan policy-makers in section 5. We conclude in section 6.