ABSTRACT
The combined effects of increasing demand for health services and declining real public resources have recently led many governments in the developing world to explore various health financing alternatives. Faced with a significant decline during the 1980s in its real per capita expenditures, the Kenya Ministry of Health (MOH) introduced a new cost sharing programme in December 1989. The programme was part of a comprehensive health financing strategy which also included social insurance, efficiency measures, and private sector development. Early implementation problems led to the suspension in September 1990 of the outpatient registration fee, the major revenue source at the time. In 1991, the Ministry initiated a programme of management improvement and gradual re-introduction of an outpatient fee, but this time as a treatment fee. The new programme was carried out in phases, beginning at the national and provincial levels and proceeding to the local level. The impact of these changes was assessed with national revenue collection reports, quality of care surveys in 6 purposively selected indicator districts, and time series analysis of monthly utilization in these same districts. In contrast to the significant fall in revenue experienced over the period of the initial programme, the later management improvements and fee adjustments resulted in steady increases in revenue. As a percentage of total non-staff expenditures, fiscal year 1993-1994 revenue is estimated to have been 37% at provincial general hospitals, 20% at smaller hospitals, and 21% at health centres. Roughly one third of total revenue is derived from national insurance claims. Quality of care measures, though in some respects improved with cost sharing, were in general somewhat mixed and inconsistent. The 1989 outpatient registration fee led to an average reduction in utilization of 27% at provincial hospitals, 45% at district hospitals, and 33% at health centres. In contrast, phased introduction of the outpatient treatment fee beginning in 1992, combined with somewhat broader exemptions, was associated with much smaller decreases in outpatient utilization. It is suggested that implementing user fees in phases by level of health facility is important to gain patient acceptance, to develop the requisite management systems, and to orient ministry staff to the new systems.
PIP: This analysis follows the evolution of Kenya's health financing policy reform program from 1989 to 1994 and judges the impact of the cost-sharing program on revenue, quality of health care, and use of outpatient facilities. The objectives of the cost-sharing program were to generate additional revenue to improve service quality, encourage cost-effective measures, and develop individual responsibility for health care. Problems due to the December 1989 implementation of cost sharing led to suspension of the outpatient fee in September 1990. In 1991, a technical assistance team uncovered specific areas in which problems occurred and determined that a successful reimplementation process would require a two-year phase-in. The new systems were introduced in a supervised manner following training workshops in the provincial hospitals. The original registration fee was reintroduced as a treatment fee, other fees were introduced, and some existing fees were adjusted. This analysis uses data from revenue generation, quality of care, and utilization impact to determine the impact of the program. It was determined that the cost sharing revenue generated by the new systems provided significant additional funding at the facility and district level. Funds have generally been used in a more appropriate manner than in the past, but patient perceptions of quality reveal inconsistencies among facilities. Unlike the reduction in use seen with the outpatient registration fee, the treatment fee resulted in only very modest decrease in use, with no downward trend noted at district hospitals. Lessons learned by comparing the initial implementation to the reimplementation include: 1) phasing the reimplementation over two years allowed testing and training, and beginning in referral hospitals was a good strategy, 2) allowing facilities to keep 75% of the revenue was a good strategy that was improved by the introduction of appropriate financial management systems, 3) a treatment fee is more acceptable than a registration fee, and 4) the use of revenue to improve quality has been compromised by a need to prevent deterioration in basic services as government allotments have fallen.
