The Ministry of Health's Chief Economist and Head of Division Policy, Planning and Health Financing, Mr. Elkana Ong'uti on Domestic Health Financing at the 2nd Paraclete Health Sector Development Partner Forum

1. 2nd Health Sector Development
Partner Forum
Domestic Health Financing
Mr. Elkana Onguti
Division of Policy Planning
Ministry of Health

2. Introduction
• Domestic Health Financing involve the mobilization of finances
from internal sources to finance health systems in a country.
• This can be done through multiple ways, examples being;
Increasing government tax allocations to the health sector;
Promoting local private sector investment in the health sector
Increasing insurance penetration to the population
Reducing inefficiencies in the sector
• Domestic resources provides a reliable and sustainable sources
of finances for the health sector.

3. Government investment to health
• With the country’s
general revenue
increasing over
time, government
allocation to the
health sector has
not changed
significantly

4. Health Trends over time
105 110 115
74
5262 74 77
52 39
26 28 33 31 14
365
590
414
488
350
0
100
200
300
400
500
600
700
0
20
40
60
80
100
120
140
1993 1998 2003 2008 2014
IMR,U5MR,NMR
Under 5 mortality rate Infant mortality rate
Neonatal mortality rate Maternal Mortality Ratio
MMR
A trend of improving health indicators is emeging

5. Health Expenditure Trends (adjusted)
• Domestic resources for
health have increased
between 2010-2016 (65%
to 77%)
• Donor support has
declined over time to
constitute only 23% of
THE)
• Out-of-Pocket
expenditure still above
recommended 15%
(WHO)
30% 29% 29% 34%
40%
51%
36%
30%
32%
31%
2%
3%
7%
8%
6%
16%
31% 35%
26% 23%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2001/02 2005/06 2009/10 2012/13 2015/16
Percent
Donors
Private
Households
Government

6. Proportion of County health allocations
• On average, Counties are
allocating 25% of their budget to
the health sector
• This is still not enough for them to
meet the health needs
• Need for other sources of domestic
financing to enlarge the resource
pool
234
278 273
64
85 9222%
23%
25%
19%
20%
21%
22%
23%
24%
25%
26%
0
50
100
150
200
250
300
FY 2014/15 FY 2015/16 FY 2016/17
Total County Govt Budget (TCGB)
County health budget
Percent County health of TCHB

7. Depth of Health Insurance Coverage
• Majority still out of reach from
health insurance (82.7%)
• NHIF still the biggest health
insurer in the country
• Insurance skewed towards the
rich
• Majority out of insurance are in
the lowers poverty quintiles
92.9 92.5 90.3 94.8
83.0
3.6 3.2 3.3
3.7 16.03.4 4.3 6.4
1.5 1.0
2.9
6.4
12.4
25.4
41.5
0
5
10
15
20
25
30
35
40
45
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Poorest Second Middle Fourth Richest
PercenrInsured
Others ( Community based health insurance etc)
Private Insurance

8. External Resources for Health in
Kenya
USG
53%
Global
Fund
11%
DFID
8%
World Bank
IDA
7%
GAVI
7%
EU and
European
bilaterals
6%
UN Family
5%
Other
3%
ESTIMATED SPLIT OF ODI
35%
65%
Location of support of ODI
On-budget Off-budget
- Skewed towards one partner
- A great proportion is off –
budget
- A challenge on sustainability

9. Potential Sources additional financing
• Progressively increase financing for health – national and counties (15%)
• Reallocation of resources – across sectors (health to 30%)
• Increase efficiency in the use of available resources
• Increase allocative efficiency (choice between competing needs):
• About 60% of disease burden constitute communicable conditions
• But significant amounts are spent on curative services and
infrastructure
• Reduction of high non-discretionary expenditures – e.g. wage bill, debt??

10. Potential Sources additional financing
• Reform the revenue collection system to be more efficient
• Increased borrowing –thro’ domestic or foreign grants/borrowing – limited
• Mobilization and more alignment of donor resources
• Mobilize more private sector financing :
Strengthen pooling of resources to pre-payment systems, including
health insurance
Public private partnerships – risk sharing
Promotion of private investment in health

11. Thank you