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User fees a threat to universal health plan

medicare

Summary

  • The reduction of out-of-pocket payments for healthcare services is particularly important given that they have been shown to not only present a substantial barrier to healthcare access, but also to subject households to financial hardship.
  • The inclusion of UHC as one of the “Big 4 Agenda” for the second term of the current administration signalled the country’s political commitment to better health.

To make progress towards Universal Health Coverage (UHC), countries must expand priority healthcare services, include more people, and reduce out-of-pocket payments.

The reduction of out-of-pocket payments for healthcare services is particularly important given that they have been shown to not only present a substantial barrier to healthcare access, but also to subject households to financial hardship and push many into poverty.

The inclusion of UHC as one of the “Big 4 Agenda” for the second term of the current administration signalled the country’s political commitment to better health.

President Uhuru Kenyatta’s administration has however been implementing UHC reforms since the beginning of its first term, in 2013.

These include the removal of user fees in public primary healthcare facilities (health centres and dispensaries) and the introduction of free maternity services (Linda Mama).

It also includes expansion of services covered by the National Hospital Insurance Fund (NHIF), and of course the UHC pilot and planned scale-up.

Among these reforms, the removal of user fees to make services free at the point of care in public health centres and dispensaries has perhaps been the most impactful of these reforms.

This is because these healthcare facilities have wider geographical reach, primary healthcare services reach the most people and catch diseases before they get worse and hence promoting both equity and efficiency in the health system.

Data from serial rounds of the Kenya Household Expenditure and Utilization Survey show that the incidents of catastrophic healthcare costs is lower for individuals that utilise these health facilities.

This key UHC reform is however potentially under threat for two main reasons. First, counties will no longer be receiving the user fee forgone conditional grant.

Conditional grants are additional resources allocated to county governments from revenue raised nationally or in the form of loans and grants from development partners to support national priorities and strengthen county functions.

The user fee forgone conditional grant provided ringfenced funds to counties earmarked to health centres and dispensaries to replace user fee revenues.

Second, a major donor, the Danish International Development Agency (Danida) has plans to progressively exit from the financing of health centres and dispensaries in Kenya, exposing these healthcare facilities to substantial resource gaps.

Danida has provided on-budget funding to support the operations and maintenance costs of health centres and dispensaries since before devolution.

Danida plans to step down its support to primary healthcare facilities by 25 percent every year from the financial year 2021/22 and exit completely over the next three years.

Their exit is in line with trends for donor transition as countries graduate to middle income status. The user fee forgone conditional grant from the national government, and donor funds are the major sources of revenues for health centers and dispensaries.

In the absence of these funds, and unless alternative financing mechanisms are devised to replace these funds, counties will be left with no option but to reintroduce user fees in health centres and dispensaries.

Such a move will reverse the gains made in expanding access to primary healthcare services and protecting Kenyans from financial catastrophe.

This will have a negative impact on the health of the population as individuals forgo health services because of the financial barrier and will also lead to impoverishment of households.

Put simply, if counties reintroduce user fees in health centres and dispensaries, any gains made towards UHC will be reversed. It truly will be several steps backwards, after an important step forward.

To forestall this potentially catastrophic outcome, it is imperative that the National Treasury, Ministry of Health, and county governments develop and implement an effective primary healthcare financing framework.

Such a framework should guarantee ringfenced funds to health centres and dispensaries to cover these facilities operational costs.

To resolve this, the conditional grants framework should include user fees forgone as one of conditional grants to counties.

Second, county governments should urgently develop donor transition that outline how they will progressively replace donor revenue sources as the donors transition out of supporting them.

Such a plan should identify alternative sources of funds, but also articulate how existing county funds could be reprioritised and used more effectively to avoid the erosion of gains made in the health sector as donors transition.

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