Health Care Expenditure Outcomes Kenya Health And Social Care Essay



The wellness of the people is cardinal to the attainment of peace and security and is dependent upon the fullest co-operation of persons and the province. Human wellness therefore has a major function to play in a Country ‘s Economic Development. There is a direct relationship between the wellness position of a population and its productiveness as demonstrated by industrialised states, which are now profiting from old ages of investing in wellness services. The proviso of good wellness satisfies one of the basic human demands and contributes significantly towards keeping and heightening the productiveness of the people.

The wellness sector is pluralistic where wellness services are provided by many participants in the field including the populace sector through the Government of Kenya ( GOK ) and parastatal organisations, the private sector consisting the Faith Based Organizations ( FBOs ) Non-Governmental Organizations ( NGOs ) and the Private for-profit installations. The public sector is the largest supplier and moneyman of wellness services and operates wellness attention installations throughout the state accounting for approximately 52 % of all installations.

In the Vision 2030 Master Plan, several structural alterations are envisaged to better and spread out the bing wellness sector in both public and private domains to turn to the challenges.

In Kenya, entire wellness disbursement stands at about US $ 6.2 per capita, far short of the World Health Organization ‘s ( WHO ) recommended degree of US $ 34 per capita. Life anticipation is besides on the diminution. Harmonizing to the World Health statistics 2008, life-expectancy among Kenyan males in 2006 was 57.49 and for adult females was 58.24 old ages. This puts Kenya at 188th in the universe rankings. HIV/AIDS, Malaria, Rabies, nutrient and water-borne diseases has been a flagellum of Kenya, and hence pose continual challenges to wellness attention suppliers in Kenya. The infant mortality rate ( under 1 ) was 68 in 1990 and 81 in 2008 per 1,000 unrecorded births ( UNICEF-Kenya statistics ) .

Over the old ages, the Government has had trouble in apportioning “ equal ” financess to the Ministry of Health. Per capita outgo on wellness has been fluctuating but easy increasing from KShs 395.50 in 2001/2002 to KShs 983.0 in 2007/08. In footings of US dollar, this is from $ 6.28 to $ 13.8 severally, manner below the WHO recommended figure of US $ 37 per capita. Ministry of Health outgo as a per centum of GDP has been every bit low. The challenge is non limited to the sum of financess available for wellness outgo but the allotment of the limited fiscal resources for different utilizations within the wellness sector has non been optimum and remained a challenge.

The under-financing of the wellness sector has reduced its ability to guarantee an equal degree of health care for the population. Therefore, the proviso of wellness and medical attention services in Kenya is partially dependent on givers. In 2002, more than 16 % of the entire outgo on health care originated from givers. There are besides other factors suppressing Kenya ‘s ability to supply equal health care for its citizens. These include: inefficient use of resources, the increasing load of diseases and the rapid population growing. Among those Kenyans who are sick and do non take to seek attention, 44 % are hindered by cost. Presently, there is a calculated attempt by the authorities to switch towards decentalisation of wellness attention proviso. The Ministry of Health ( MoH ) has embarked on developing the legal and regulative model and capacity edifice to devolve the full authorization for planning and fiscal direction to territories.

The wellness sector is nevertheless at the hamlets. Health statistics shows enormous diminution in the public presentation of the wellness indexs over the last 10 old ages despite the increased allotment in wellness outgo. This implies hence that the increased authorities disbursement may non needfully take to betterment in wellness position as would be expected.


A cardinal issue in wellness policy concerns the extent to which extra health care outgo yields patient benefits in the signifier of improved wellness results. Over the last twosome of decennaries it has been really stylish to reason for the power of wellness attention outgo in bettering public wellness in developing states. At the same clip, extra outgo on medical attention has been discredited as holding small or no impact on the overall degree of wellness in society. Evidence nevertheless confirms steady tendencies for improved wellness results with increasing wellness outgo.

Government Expenditure in the period 2005/06 was KShs 401,518,324,607 while Entire Health Expenditure ( THE ) in the same period was KShs 70,807,957,722. With a population of about 37,000,000 so, THE per capita was KShs 1,987 ( about US $ 27 ) , and THE as a per centum of entire Government Expenditure was 5.2 % . Kenya ‘s health care disbursement is hence below the WHO recommendation by about US $ 7 per caput. The challenge therefore remains how to bridge this resource spread, how to apportion the limited resources more expeditiously and how to raise more domestic resources for puting in the wellness sector. It should be noted that in 2001/02, authorities disbursement on wellness was 8 % of entire authorities outgo, 5.2 % was hence a decrease.

Health attention financing surveies in Kenya have tended to concentrate on individual manners of funding at a clip, such as user fees, insurance, authorities budget, giver support, or on funding related issues such as equity and quality of attention. Relatively few surveies have been conducted to analyse entire national wellness funding or outgos from all beginnings and to associate them to their assorted utilizations and results. It has been noted that existent outgos fall below budgetary allotments. A cardinal factor that has contributed to the worsening wellness results has been the diminution in one-year existent per capita authorities budget to the wellness sector. In some comparatively deprived states, such as Nyanza and Western states, the current resource expression is ensuing in allotments which are below their current disbursement degrees.

Financing health care has remained a challenge to the Government of Kenya for a long clip. Key challenges in funding health care include, Large out of pocket outgo which can non be budgeted or programmed for, low investing in wellness by authorities, inappropriate allotment of fiscal resources within the authorities wellness budget, low public consciousness on the demand for wellness insurance. With regard to resources, substructure challenges range from deficit of some critical substructure ; deficiency of care systems to guarantee serviceableness and functionality of bing substructure ; and deficit of skilled forces to utilize and keep the substructure. The human resource has been negatively affected by staff deficit and sub-optimal distribution of available staff. Sing handiness of trade goods, the current pattern whereby public installations are required to merely beginning their supplies from Kenya Medical Supplies Agency ( KEMSA ) has created a monopoly whose effectivity and efficiency are missing. KEMSA has adopted the “ push ” system and thereby coercing the installations to have medical specialties which they have no immediate usage for. This leads to miss of drugs in authorities infirmaries.

However, the challenges confronting the health care service bringing and the wellness sector as a whole can non merely be addressed by simply pumping more money into the sector. The constrictions impacting efficiency, effectivity and capacity use must foremost be tackled for increased disbursement to convey approximately coveted consequences.

Sustainable proviso of wellness attention requires a carefully thought out method for fiscal resources mobilisation. In Kenya, a policy model for funding wellness attention was developed in 1994. This policy model identified several methods through which the needed fiscal resources could be mobilized and these included ; revenue enhancement, user fees, givers and wellness insurance. The methods for fiscal resources mobilisation should peculiarly pay attending to the socio-economic position of the population it intends to function. There are two sides to serve proviso ; the cost of service bringing and the ability of the population to pay for it whether as insurance premium or as user fees.

It appears that wellness has systematically been under financed by the populace sector. Per capita wellness outgo ranged from every bit low as KShs 395.49 ( US $ 5.05 ) in 2000/01, to KShs 488.44 in 2001/02 to KShs 1,987 ( US $ 27 ) the highest, in 2005/6. Entire Government Expenditure has ever been below 2 % of the GDP.


The general aim of this survey is to transport out an empirical analysis of the relationship between wellness attention outgo and wellness results in Kenya. The specific aims of this survey are:

To set up the relationship between authorities outgo on preparation & A ; development of nurses and wellness results

To set up the relationship between authorities outgo on TB Drugs and wellness results

To set up the relationship between authorities outgo on child immunisation and wellness results


The relationship between wellness attention outgo and wellness results is of involvement to policy shapers in the visible radiation of steady additions in wellness attention disbursement for most states. In Kenya, comparatively few surveies have been successful in happening a nexus between wellness attention outgo and wellness results, as other factors impacting wellness results such as diet, life-style and environment are frequently taken to be the chief factors impacting wellness results, and peculiarly life anticipation.

However, set uping causal relationships has ever been complex because, foremost, wellness attention outgo is merely one of many quantitative and qualitative factors that contribute to wellness results, and, secondly, measuring of wellness position is an imperfect procedure. Areas or states with comparatively high wellness demands and hapless results may be given ( other things being equal ) to direct high degrees of disbursement to healthcare. For policy-makers the issue is whether – after seting for demand – excess disbursement leads to better wellness results. From a policy position, this survey can assist put precedences by informing resource allotment across programmes of attention. It can besides assist wellness engineering bureaus decide whether their cost-effectiveness thresholds for accepting new engineerings are set at the right degree.


Theoretical LITERATURE

Healthcare can be viewed as any other good or service. This contributes to the theory of supply and market construction and behaviour. The measure of health care “ merchandise ” produced by a health care “ house ” is referred to as its end product. The ultimate end product of the wellness sector is wellness.

The investing theoretical account of demand trades with a theoretical and empirical probe of the demand for the trade good ‘good wellness ‘ . The theoretical account basically regards wellness as a capital good that is inherited and depreciates or deteriorates over clip. The theory posits that investing in wellness is a procedure in which medical attention is combined with other relevant factors to bring forth new wellness, which, in portion, offsets the procedure of impairment in wellness stock.

The wellness belief theoretical account explains and predicts wellness behaviours by concentrating on persons ‘ attitudes and beliefs. It relates a socio-psychologic theory of determination devising to single health-related behaviours in which it identifies six determiners that facilitate healthy behaviours: Perceived susceptibleness, or the perceptual experience of acquiring a status ; Perceived badness, or the perceptual experience of the earnestness of a status and its effects ; Perceived benefits, or the perceptual experience of having touchable and psychological benefits by executing the advised action to cut down hazard or earnestness of impact ; Perceived barriers, or the perceptual experience of holding to pay touchable and psychological costs of the advised action ; Self-efficacy, or the strong belief of being able to successfully put to death the healthy behaviour to accomplish the coveted result and in conclusion, Cues to action, or schemes to trip preparedness ( Glanz and Rimer, 2005 ; Janz and Becker, 1984 ; Rosenstock et al. , 1994 ) . Harmonizing to this theoretical account the authorities tries to increase or cut outgo after weighing the sensed badness of a certain disease and perceived benefits to its citizens.

Michael Grossman ‘s 1972 theoretical account of wellness production has been highly influential in this field of survey and has several alone elements that make it noteworthy. Grossman ‘s theoretical account positions each person as both a manufacturer and a consumer of wellness. Health is treated as a stock which degrades over clip in the absence of “ investings ” in wellness, so that wellness is viewed as a kind of capital. The theoretical account acknowledges that wellness attention is both a ingestion good that outputs direct satisfaction and public-service corporation, and an investing good, which yields satisfaction to consumers indirectly through increased productiveness, fewer ill yearss, and higher rewards. Investment in wellness is dearly-won as consumers must merchandise off clip and resources devoted to wellness, against other ends. These factors are used to find the optimum degree of wellness that an person will demand. The theoretical account makes anticipations over the effects of alterations in monetary values of wellness attention and other goods, labour market results such as employment and rewards, and technological alterations. In Grossman ‘s theoretical account, the optimum degree of investing in wellness occurs where the fringy cost of wellness capital is equal to the fringy benefit.

The model for Arrow ‘s theorem assumes that we need to pull out a penchant order on a given set of options ( outcomes ) . Each person in the society ( or equivalently, each determination standard ) gives a peculiar order of penchants on the set of results while seeking for a discriminatory vote system, called a societal public assistance map ( penchant collection regulation ) , which transforms the set of penchants ( profile of penchants ) into a individual planetary societal penchant order. Arrow ‘s impossibleness theorem demonstrates officially that it is impossible to obtain a societal public assistance map that satisfies all conditions particularly corporate determinations refering to political relations and policy. So the authorities while doing expenditure determinations on wellness, it is non possible to fulfill every person health care needs in the state but it establishes a bulk regulation for building societal penchants from ordinal single wellness penchants.


There is a considerable literature on the relationship between health care outgo on some step of health care results. However, empirical grounds has hitherto been inconclusive about the strength of the nexus between wellness attention disbursement and wellness results.

On his analysis of the factors finding wellness position in Kenya, Gakunju E. M. ( 2003 ) found that authorities wellness outgo was important in finding wellness position of the families. He besides found that authorities wellness outgo besides influences wellness position with a slowdown. This implies that the current and past authorities ( investing and disbursement ) disbursement in the wellness sector have important consequence on the wellness of the population. He besides identified several factors as being important in finding of wellness position in Kenya. These include income per capita, female literacy degree, authorities disbursement in wellness sector, immunisation coverage, and entree to physicians by families every bit good as the HIV/AIDs prevalence. His survey utilized merely the cardinal authorities wellness outgos to explicate wellness position of the population.

Lloyd A. A ( 2009 ) evaluated the impact of authorities wellness outgos on the hapless in Nigeria. From the descriptive analysis the survey found that the wellness position of the mean citizen and the status of wellness substructure has non improved appreciably despite authorities disbursement ( though with small fluctuations ) on this sector. Therefore, he concluded that there is the demand for the populace sector to, non merely, better its wellness attention outgo but besides put into productive usage the available financess in the wellness sector. Besides, the consequence suggested that public disbursement on wellness had a consistent and important influence on kid mortality and hence authorities wellness attention disbursement should be made more productive and accessible. This should non entirely be on increasing the figure of wellness attention installations, as this does non needfully interpret to increase in the wellness position of the public, accent should be on the assorted ways of bettering wellness attention installations, as these will heighten both the range and quality of wellness attention services. Furthermore, authorities resources need to be reallocated towards wellness intercession designed to react chiefly to the wellness demands of the hapless. Government should besides guarantee that wellness intercessions reach their intended donees.

A survey by Cremieux et Al ( 1999 ) sought to get the better of informations heterogeneousness jobs by analyzing the relationship between outgo and results across 10 Canadian states over the 15-year period 1978-1992. They found that lower health care disbursement was associated with a important addition in infant mortality and a lessening in life anticipation. Their estimated arrested development equation consisted of a mixture of potentially endogenous variables ( such as the figure of doctors, wellness disbursement, intoxicant and baccy ingestion, and outgo on meat and fat ) and exogenic variables ( such as income and population denseness ) .

Or ‘s ( 2001 ) survey of the determiners of fluctuations in mortality rates across 21 OECD ( Organisation for Economic Co-operation and Development ) states between 1970 and 1995 found that the part of the figure of physicians to cut downing mortality in OECD states was significant, but her appraisal technique assumed that the figure of physicians was exogenic to the wellness system.

Using macro-level informations Nixon and Ulmann ( 2006 ) provided a elaborate reappraisal of the relationship between health care inputs and wellness results. They undertook their ain survey utilizing informations for 15 EU states over the period 1980-1995. They employed three wellness results measures – life anticipation at birth for males and females, and the infant mortality rate – and everal explanatory variables including per capita wellness outgo, figure of doctors ( per 10,000 caput of population ) , figure of hospital beds ( per 1,000 caput of population ) , the mean length of stay in infirmary, the inpatient admittance rate, intoxicant and baccy ingestion, nutritionary features and environmental pollution indexs. Nixon and Ulmann concluded that, although wellness outgo and the figure of doctors have made a important part to betterments in infant mortality, ‘healthcare outgo has made a comparatively fringy part to the betterments in life anticipation in the EU states over the period of the analysis.

Martin s, Rice N and Smitth P.C ( 2009 ) had shown that health care outgo has a provably positive consequence on results in five of the attention programmes that they investigated ( that is, for malignant neoplastic disease, circulation jobs, respiratory jobs, gastro-intestinal jobs and diabetes ) . Their deficiency of success with five other classs – neurology, injury and hurts, infective diseases, genito-urinary jobs and neonatal attention – likely reflects the fact that their outcome index ( decease ) is non a common result for these classs and/or that the forte coverage of the mortality informations failed to fit closely enough the coverage of the budgeting informations. No result index was available for another five classs, although they obtained plausible outgo consequences in line with our theoretical account ‘s outlooks. In this survey they have used budgeting informations for 2006/07 and mortality informations for the period 2004-06.Our estimations confirm that the fringy cost of a life twelvemonth saved is rather low and that this determination is non confined to malignant neoplastic disease and circulation job. It provides grounds that outgo on the assorted disease classs yields rather consistent benefits in footings of life old ages saved. Furthermore, it is rather likely that the fluctuations observed between the costs in the different programmes can be explained by two factors. The first is intercessions, such as malignant neoplastic disease alleviant attention, that yield benefits that can non be measured to any great extent in increased life anticipation. The 2nd is differences in the extent to which the forte coverage of the mortality informations corresponds to the coverage of the budgeting informations. The dramatic alteration in illation that arises when traveling from the misspecified OLS theoretical accounts to the well-specified 2SLS theoretical accounts illustrates why proper econometric modeling is needed if the nature of the relationship between outgo and result is to be investigated right. In peculiar, they suggest a far more pronounced influence of health care disbursement on wellness results than is frequently indicated by more conventional analysis.


As demonstrated in the above literature, issues of health care outgo have been an interesting field of survey for decennaries. On analyzing the states studied, it can be seen that the huge bulk studied assorted combinations of developed states. In footings of patterning techniques, all surveies utilized some signifier of multivariate arrested development analysis, with some integrating lagged variables for informations affected by temporal factors. In some instances the mold incorporated displacement silent persons to account for fixed effects within the sample, for illustration, in look intoing heterogeneousness due to country-specific effects or the impact of wellness attention system or societal insurance.

The chief consequences showed that wellness outgo was a important explanatory variable for most wellness results examined. Other surveies found that income was a important explanatory variable while others did non happen wellness outgo to be important when commanding for income. It is interesting to observe that all surveies that included pharmaceutical outgo found this facet of wellness outgo to be important and positive for wellness results.

From the reappraisal of the literature, No conclusive grounds appears to be sing the part of healthcare outgo on wellness results. This may be due to country-specific features.

The surveies reviewed have used different methodological analysiss and variables to set up the nexus between healthcare outgo and wellness results. Healthcare outgo in Kenya has been of involvement, sing the fact that there have been rapid additions in healthcare disbursement in recent times. But few or no surveies are available sing this topic. This survey will try to elicit more involvement in this country


This survey reviews cardinal findings and methodological attacks in this field and reports the empirical consequences in Kenya.

The survey will follow an attack that considers wellness as a production map so that wellness can be viewed as an ‘output ‘ , of a wellness attention system, which is influenced by the ‘inputs ‘ to that system. The analysis examines life anticipation and infant mortality as the ‘output ‘ of the wellness attention system and wellness attention expenditures on nurse preparation, child immunisation and TB drugs as ‘inputs ‘ . The premise is that for grounds associated with decreasing returns and the inauspicious effects of certain variables after an initial positive result, the relationship is expected to be nonlinear and non-monotonic. For illustration, the effects of lifting income on wellness position are assumed to be ab initio good, but after a certain threshold of income degree they may change by reversal to go negative, giving rise to a U-shaped map. Furthermore, in empirical research it is frequently virtually impossible to take history of the effects of latent variables, associated with improved nutrition and better hygiene, which are most of import in the finding of wellness results.

Taking history of these limitations, the survey will set about econometric analysis of the dependent variables associated with wellness results: life anticipation and infant mortality. The chosen explanatory variables are: wellness attention expenditures on nurse preparation and development, kid immunisation and TB drugs.



Life anticipation and infant mortality rate are the dependent variables being a map of wellness attention outgo on nurse preparation and development, kid immunisation and TB drugs. This is set out as below:

Le =Nt, Ci, Td, ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.. ( I )

IMr = Nt, Ci, Td, ) aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦ ( two )

Where Le is the life anticipation, IMr is the infant mortality rate, Nt is the wellness outgo on nurse preparation and development, Ci is the wellness outgo on kid immunisation, Td is the wellness outgo on TB drugs and is an error term stand foring the other factors non explicitly captured in the theoretical account.

The theoretical account specification

The theoretical account can hence be specified as:

Le =+Nt + Ci + Td +aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.. ( three )

IMr =-Nt – Ci – Td +aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦aˆ¦.. ( four )


is the changeless term or the intercept

, and are the several coefficients

Le is the life anticipation

IMr is the infant mortality rate

Nt is the wellness outgo on nurse preparation and development

Ci is the wellness outgo on kid immunisation

Td is the wellness outgo on TB drugs

is the random error term or stochastic perturbation term that captures prejudices in appraisal, it besides captures the effects on the other variables unestimated in this theoretical account.


The hypotheses are formulated as follows:

Null hypothesis H0: , , =0, Infant mortality rate and life anticipation are non related to the explanatory variables.

Alternate hypothesis H1: , , Infant mortality rate and life anticipation are dependent on the explanatory variables.


The additive arrested development analysis will be applied on the clip series informations. Life anticipation ( Le ) and infant mortality rate ( IMr ) will be taken as dependent variables, while wellness outgo on nurse preparation and development ( Nt ) , wellness outgo on kid immunisation ( Ci ) and wellness outgo on TB drugs ( Td ) are the independent variables. The econometric bundle that will be used is stata. In the analysis, all the independent variables are regressed on the dependent variables to analyze the relationships.


This survey uses annually secondary informations covering the period 2000-2010 from assorted issues of finance publications, World wellness statistics studies, UNICEF- Kenya statistics and the Ministry of Health ( MOH ) . The survey period has been chosen due to informations handiness. Great attention will be exercised in guaranting that merely relevant informations will be used.


Univariate Data Analysis

This trial will be carried out to guarantee that the information follows a normal distribution and place informations points that are potentially hard.

Unit Root Analysis

To avoid specious arrested development as would originate with non stationary variables, unit root analysis will be carried out on all the variables to guarantee that they are stationary. The unit root trials that will be used are the Dickey Fuller trial and the Augmented Dickey Fuller trial.

Co integrating Analysis

This trial is necessary against the loss of information associating to possible long-run relationship in a theoretical account specified in first differences. This will affect utilizing the Engle-Granger ( 1987 ) two measure process due to its simpleness. The theoretical account will be subjected to Co integrating analysis to guarantee that there is a stable long-run relationship between the explained variables and the regressors. The long tally relationship among vthe degree of variables will be restated through the Error Correction Mechanism. The Error Correction Mechanism will be necessary to guarantee a systematic disequilibrium accommodation processes through which the dependant and explanatory variables are prevented from switching off from their mean values.


The research is expected to corroborate that there is a relationship between health care outgo and wellness results. Increased outgo on nurse preparation and development is expected to take down infant mortality rate and raise the life anticipation. Increased outgo on TB drugs is besides expected to take down infant mortality rate and raise the life anticipation. Increased outgo on child immunisation is every bit good expected to take down infant mortality rate and raise the life anticipation. On the other manus the research worker expects things to take a different bend or the possibility of holding a little divergence from the expected consequences.

Descriptions of the variables used

Life anticipation ( Le ) : This is the mean figure of old ages a neonate is expected to populate with current mortality forms staying the same. It is an of import index of the wellness position of a country/ community.

Infant mortality rate ( IMr ) : This is the figure of babies deceasing before making one twelvemonth of age, per 1,000 unrecorded births. It is by and large computed as the ratio of infant deceases ( i.e. the deceases of kids under one twelvemonth of age ) in a given twelvemonth to the entire figure of unrecorded births in the same twelvemonth. Infant mortality rate ( IMR ) is an of import sensitive index of the socioeconomic and wellness position of a community.

Health outgo on nurse preparation and development ( Nt ) : This is the outgo on in-service preparation programmes that are aimed at upgrading nursing accomplishments. This programme allows working nurses to larn and use new accomplishments needed to better the direction and quality of patient attention.

Health outgo on kid immunisation ( Ci ) : This is the outgo on inoculations given to kids between the ages of nine months and five old ages against rubeolas, infantile paralysis and vitamin A addendums.

Health outgo on TB drugs ( Td ) : This is the authorities outgo in the proviso of adequate anti-TB drugs. This includes beef uping the TB drug proviso concentrating on prediction and administering TB drugs.