Government’s Budget for Health Sector Leaves Kenyans Spending Too Much Out of Their Pockets

By Soko Directory Team / Published February 22, 2019 | 10:12 am

Kenya’s allocation to the health sector has been increasing every other fiscal year, but why are the citizens paying too much out of their own pockets to get ‘proper’ healthcare?

Each year, approximately one million Kenyans fall below the poverty line due to health-care related expenditure. The widespread of poverty due to diseases, low income, unemployment rates, drought, and other vices further predisposes many Kenyans to diseases while at the same time slowing all aspects of growth in the economy.

Current trends across the world show that spending on health is growing faster than the rest of the global economy. In fact, a report by the World Health Organization (WHO) noted that the spending accounts for 10 percent of global gross domestic product (GDP).

Another new report by WHO shows that there is a swift upward trajectory of global health spending, which is particularly noticeable in low- and middle-income countries where health spending is growing on average 6 percent annually compared with 4 percent in high-income countries.

READ Health Still More Expensive Than Any Other Global Economies

Health sector budget allocations in Kenya

A close look at the budgetary allocation for the health sector in Kenya shows that the expenditure has been on the rise. In 2001/2002, Kenya spent 5.2 billion shillings on the health sector. The figure had consistently risen to 34.4 billion shillings by 2008/2009.

In the financial year 2013/14, the allocations to the Ministry of Health and related Ministries, Departments and Agencies (MDAs) stood at 41.70 billion, 54.10 billion in 2014/15, 61.70 billion in 2015/16, and 73.60 billion shillings in 2016/17.

In the financial year 2017/18, the government allocated approximately 60.9 billion shillings for healthcare services, compared to 60.3 billion shillings in 2016/17. The amount was projected to increase in the subsequent fiscal years to 61.9 billion and 62.7 billion shillings for 2018/19 and 2019/20 respectively.

On average, between 2013 and 2017, Kenya spent 7.1 percent of the total budget on the health sector as shown below.

Average health sector spending between 2013 and 2017.

Summary of 2018/19 Health Allocations

The amount is in Kenyan shillings

Free Maternal Healthcare program and leasing of medical equipment: 13.7 billion
Doctors/Clinical Officers/Nurses internship program: 2.9 billion
Cancer Services (leasing of Computed Tomography Scanners Equipment): 7 billion
Free Primary Healthcare: 2 billion
Health Insurance Subsidy Program (Elderly and Disabled): 0.8 billion
Roll out of Universal Health Coverage: 2.5 billion
Establishment of Cancer Institute: 400 million
Kenyatta National Hospital: 11.7 billion
Moi Teaching and Referral Hospital: 7.7 billion
KEMRI: 2.2 billion
KMTC: 4.7 billion

The current system of government devolved health services to the 47 counties leaving the central government with policy functions, research, and the regulation of the health sector.

Also, the government is responsible for Level Six hospitals, which are mainly referral facilities such as the National Spinal Injury Hospital in Nairobi, Moi Teaching and Referral Hospital in Eldoret, and the Kenyatta National Hospital in Nairobi.

The counties are responsible for facilities classified between level 1 and level 5.

People spending more from their pockets for health

The trend of an increase in budgetary allocation to the healthcare sector is a good thing, but why are people breaking their banks to get medical access in Kenya?

For one, the allocation in Kenya isn’t enough to offer financial security in terms of healthcare to the citizens. According to the WHO, Governments normally contribute an average of 51 percent of a country’s health spending, while more than 35 percent of health spending per country comes from out-of-pocket expenses.

The implication of this proportion is that 100 million people pushed into extreme poverty each year across the world, and Kenya is among those countries.

Kenya lies under the WHO’s low- and middle-income countries where there increases in domestic public funding for health are registered.

“Increased domestic spending is essential for achieving universal health coverage and the health-related Sustainable Development Goals,” Dr. Tedros Adhanom Ghebreyesus, WHO Director-General says.

“But health spending is not a cost, it’s an investment in poverty reduction, jobs, productivity, inclusive economic growth, and healthier, safer, fairer societies,” he adds.

The situation in Kenya is the exact opposite of what the WHO states. It is worth noting that when the when government spending on health increases, people are less likely to fall into poverty seeking health services.

Government spending, however, only reduces inequities in access when allocations are carefully planned to ensure that the entire population can obtain primary health care.

Kenya spends a lot on primary health care, but way more than 60 percent of the spending on primary health care comes from the people.

READ Is Kenya on course to Universal Healthcare Coverage?

Challenges

The reason why Kenyans still spend a lot on medical access is as a result of several challenges rocking the sector. First of all, the funding is inadequate, then there is the issue of the spread of non-communicable diseases.

The devolved healthcare services together with the Bill of Rights are eliciting huge funding demands. This has made the sustainability of gains made so far in the health sector more complex.

Kenya’s commitment to the Universal Health Care enshrined in 2015 by the international community for the 2030 vision at this point seems overambitious.

According to the Sustainable Development Goals set in the agenda, Kenya aims to become a competitive and prosperous nation with a high quality of life for all its citizens by 2030. But how will this be achieved if investing in a quality health delivery system still remains a challenge?

The government has made considerable progress, some would note, but not the citizens. The national health insurance scheme needs to be revamped to include everyone who can pay premiums instead of only those in formal employment.

This way, the burden of healthcare costs will be shifted from the individual to the collective by raising more money for healthcare services.

The issue here, however, is that four out of every five Kenyans have no access to medical insurance, and this calls for more innovative ways of financing the healthcare system.

Kenya has a long way to go in terms of ensuring health financial security. The total budgetary allocation is significantly below the rate set by the African Union leaders in 2001.

In April of that year, the heads of state met and pledged to set a target of allocating at least 15 percent of their annual budget to improve the health sector, which became a component of the Abuja Declaration of 2001.

But Kenya is falling short of this goal. In fact, the country is being outperformed by other East African countries like Uganda, which allocated 8 percent of its national budget to the health sector in 2014/15. During that period, Kenya allocated only 4 percent.

Kenya needs to adopt better ways of financing the healthcare sector. Giving it the highest priority and adopting alternative ways of financing will make the sector more sustainable.

“Health is a human right and all countries need to prioritize efficient, cost-effective primary health care as the path to achieving universal health coverage and the Sustainable Development Goals,” one Dr. Agnes Soucat said.

About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

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