The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms

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dc.contributor.authorOkungu, Vincent
dc.contributor.authorChuma, Jane
dc.contributor.authorMcIntyre, Di
dc.date.accessioned2021-10-08T07:04:18Z
dc.date.available2021-10-08T07:04:18Z
dc.date.issued2017
dc.description.abstractBACKGROUND: The need to provide quality and equitable health services and protect populations from impoverishing health care costs has pushed universal health coverage (UHC) to the top of global health policy agenda. In many developing countries where the majority of the population works in the informal sector, there are critical debates over the best financing mechanisms to progress towards UHC. In Kenya, government health policy has prioritized contributory financing strategy (social health insurance) as the main financing mechanism for UHC. However, there are currently no studies that have assessed the cost of either social health insurance (SHI) as the contributory approach or an alternative financing mechanism involving non-contributory (general tax funding) approaches to UHC in Kenya. The aim of this study was to critically assess the financial requirements of both contributory and non-contributory mechanisms to financing UHC in Kenya in the context of large informal sector populations. METHODS: SimIns Basic® model, Version 2.1, 2008 (WHO/GTZ), was used to assess the feasibility of UHC in Kenya and provide estimates of financial resource needs for UHC over a 17-year period (2013-2030). Data sources included review of national and international literature on inflation, demography, macro-economy, health insurance, health services unit costs and utilization rates. The data were triangulated across geographic regions for accuracy and integrity of the simulation. SimIns models for 10 years only so data from the final year of the model was used to project for another 7 years. The 17-year period was necessary because the Government of Kenya aims to achieve UHC by 2030. RESULTS AND CONCLUSIONS: The results show that SHI is financially sustainable (Sustainability in this study is used to mean that expenditure does not outstrip revenue.) (revenues and expenditure match) within the first five years of implementation, but it becomes less sustainable with time. Modelling for a non-contributory scenario, on the other hand, showed greater sustainability both in the short- and long-term. The financial resource requirements for universal access to health care through general government revenue are compared with a contributory health insurance scheme approach. Although both funding options would require considerable government subsidies, given the magnitude of the informal sector in Kenya and their limited financial capacity, a tax-funded system would be less costly and more sustainable in the long-term than an insurance scheme approach. However, more innovative financing for health care as well as giving the health sector higher priority in government expenditure will be required to make the non-contributory financing mechanism more sustainable.
dc.identifier.apacitationOkungu, V., Chuma, J., & McIntyre, D. (2017). The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms. <i>International Journal for Equity in Health</i>, 16(1), 174 - 177. http://hdl.handle.net/11427/34476en_ZA
dc.identifier.chicagocitationOkungu, Vincent, Jane Chuma, and Di McIntyre "The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms." <i>International Journal for Equity in Health</i> 16, 1. (2017): 174 - 177. http://hdl.handle.net/11427/34476en_ZA
dc.identifier.citationOkungu, V., Chuma, J. & McIntyre, D. 2017. The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms. <i>International Journal for Equity in Health.</i> 16(1):174 - 177. http://hdl.handle.net/11427/34476en_ZA
dc.identifier.issn1475-9276
dc.identifier.ris TY - Journal Article AU - Okungu, Vincent AU - Chuma, Jane AU - McIntyre, Di AB - BACKGROUND: The need to provide quality and equitable health services and protect populations from impoverishing health care costs has pushed universal health coverage (UHC) to the top of global health policy agenda. In many developing countries where the majority of the population works in the informal sector, there are critical debates over the best financing mechanisms to progress towards UHC. In Kenya, government health policy has prioritized contributory financing strategy (social health insurance) as the main financing mechanism for UHC. However, there are currently no studies that have assessed the cost of either social health insurance (SHI) as the contributory approach or an alternative financing mechanism involving non-contributory (general tax funding) approaches to UHC in Kenya. The aim of this study was to critically assess the financial requirements of both contributory and non-contributory mechanisms to financing UHC in Kenya in the context of large informal sector populations. METHODS: SimIns Basic® model, Version 2.1, 2008 (WHO/GTZ), was used to assess the feasibility of UHC in Kenya and provide estimates of financial resource needs for UHC over a 17-year period (2013-2030). Data sources included review of national and international literature on inflation, demography, macro-economy, health insurance, health services unit costs and utilization rates. The data were triangulated across geographic regions for accuracy and integrity of the simulation. SimIns models for 10 years only so data from the final year of the model was used to project for another 7 years. The 17-year period was necessary because the Government of Kenya aims to achieve UHC by 2030. RESULTS AND CONCLUSIONS: The results show that SHI is financially sustainable (Sustainability in this study is used to mean that expenditure does not outstrip revenue.) (revenues and expenditure match) within the first five years of implementation, but it becomes less sustainable with time. Modelling for a non-contributory scenario, on the other hand, showed greater sustainability both in the short- and long-term. The financial resource requirements for universal access to health care through general government revenue are compared with a contributory health insurance scheme approach. Although both funding options would require considerable government subsidies, given the magnitude of the informal sector in Kenya and their limited financial capacity, a tax-funded system would be less costly and more sustainable in the long-term than an insurance scheme approach. However, more innovative financing for health care as well as giving the health sector higher priority in government expenditure will be required to make the non-contributory financing mechanism more sustainable. DA - 2017 DB - OpenUCT DP - University of Cape Town IS - 1 J1 - International Journal for Equity in Health LK - https://open.uct.ac.za PY - 2017 SM - 1475-9276 T1 - The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms TI - The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms UR - http://hdl.handle.net/11427/34476 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/34476
dc.identifier.vancouvercitationOkungu V, Chuma J, McIntyre D. The cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms. International Journal for Equity in Health. 2017;16(1):174 - 177. http://hdl.handle.net/11427/34476.en_ZA
dc.language.isoeng
dc.publisher.departmentHealth Economics Unit
dc.publisher.facultyFaculty of Health Sciences
dc.sourceInternational Journal for Equity in Health
dc.source.journalissue1
dc.source.journalvolume16
dc.source.pagination174 - 177
dc.source.urihttps://dx.doi.org/10.1186/s12939-017-0535-9
dc.subject.otherContributory
dc.subject.otherInformal sector
dc.subject.otherNon-contributory
dc.subject.otherUniversal health coverage
dc.subject.otherDeveloping Countries
dc.subject.otherEmployment
dc.subject.otherFinancing, Government
dc.subject.otherHealth Care Costs
dc.subject.otherHealth Care Reform
dc.subject.otherHealth Expenditures
dc.subject.otherHealth Services
dc.subject.otherHealth Services Needs and Demand
dc.subject.otherHealthcare Financing
dc.subject.otherHumans
dc.subject.otherIncome
dc.subject.otherInsurance, Health
dc.subject.otherKenya
dc.subject.otherReimbursement Mechanisms
dc.subject.otherTaxes
dc.subject.otherUniversal Coverage
dc.titleThe cost of free health care for all Kenyans: assessing the financial sustainability of contributory and non-contributory financing mechanisms
dc.typeJournal Article
uct.type.publicationResearch
uct.type.resourceJournal Article
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