Multiple funding flows in Kenya's public county hospitals

23 July 2018

Healthcare purchasing is high on the global health financing agenda as it is recognised that achieving universal health coverage (UHC) requires more than increased spending: how funds are allocated to obtain health services from healthcare providers is an important influence on the equity, quality and efficiency of health service delivery.

In many low and middle-income countries, multiple purchasers operate within the health system. Health care providers are often required to engage with many, or all, of these purchasers resulting in multiple funding flows. 

What are multiple funding flows?

  • A funding flow refers to any transfer of funds from a purchaser to a healthcare provider that is characterised by a distinct combination of arrangements including: services purchased, population group covered, provider payment mechanism, provider payment rate, accountability mechanism.
  • Funding flows vary in terms of: how much they contribute to healthcare providers' total resources, the extent to which the payment amounts cover the costs of care, their predictability and their flexibility.
  • The interaction of these characteristics sends signals to healthcare providers that may lead to desired or undesired behaviours.

Researching Multiple Funding Flows in Kenya

Researchers from KEMRI-WT conducted research to examine the characteristics of different funding flows to public county hospitals and looked at how they influenced provider behaviour. The animation below explores this in more detail.

The findings from the research are outlined in this policy brief: Examining multiple funding flows to public healthcare facilities in Kenya and summarised below:

Benefits of multiple funding flows

Having multiple funding flows benefited public hospitals by improving the overall level of financial resources that the hospitals had access to. Managers also reported that multiple funding flows provided them with greater stability by ensuring consistent availability of financial resources. 

Challenges of multiple funding flows

Differences in the sufficiency and predictability of seperate funding flows led to undesired provider behaviour including shifting of resources and discrimination. For example, despite higher total revenue generated from user fees, hospitals prioritised allocation of resources and gave preferential treatment to patients enrolled in the National Hospital Insurance Fund (NHIF). This is because the NHIF funding flows were considered more sufficient and predictable compared to user fees.

This resulted in perceptions of unfairness in access to care for uninsured people, and compromised the quality of care they recieved due to long waiting times and low doctor-patient ratios. 

Recommendations

To county governments

  • Put in place mechanisms to reimburse public hospitals for revenues lost from waiving user fees
  • Prohibit the creation of special clinics or wards within public health facilities

To National Hospital Insurance Fund

  • Engage healthcare providers in the development of provider payment rates
  • Strengthen monitoring and accountability mechanisms for healthcare facilities

To public hospitals

  • Institute a systematic priority setting and resource allocation mechanism

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