Abstract
BackgroundThe need to provide quality and equitable health services and protect populations from impoverishing health care costs has pushed universal health coverage (UHC) to the top of global health policy agenda. In many developing countries where the majority of the population works in the informal sector, there are critical debates over the best financing mechanisms to progress towards UHC. In Kenya, government health policy has prioritized contributory financing strategy (social health insurance) as the main financing mechanism for UHC. However, there are currently no studies that have assessed the cost of either social health insurance (SHI) as the contributory approach or an alternative financing mechanism involving non-contributory (general tax funding) approaches to UHC in Kenya. The aim of this study was to critically assess the financial requirements of both contributory and non-contributory mechanisms to financing UHC in Kenya in the context of large informal sector populations.MethodsSimIns Basic® model, Version 2.1, 2008 (WHO/GTZ), was used to assess the feasibility of UHC in Kenya and provide estimates of financial resource needs for UHC over a 17-year period (2013–2030). Data sources included review of national and international literature on inflation, demography, macro-economy, health insurance, health services unit costs and utilization rates. The data were triangulated across geographic regions for accuracy and integrity of the simulation. SimIns models for 10 years only so data from the final year of the model was used to project for another 7 years. The 17-year period was necessary because the Government of Kenya aims to achieve UHC by 2030.Results and conclusionsThe results show that SHI is financially sustainable (Sustainability in this study is used to mean that expenditure does not outstrip revenue.) (revenues and expenditure match) within the first five years of implementation, but it becomes less sustainable with time. Modelling for a non-contributory scenario, on the other hand, showed greater sustainability both in the short- and long-term. The financial resource requirements for universal access to health care through general government revenue are compared with a contributory health insurance scheme approach. Although both funding options would require considerable government subsidies, given the magnitude of the informal sector in Kenya and their limited financial capacity, a tax-funded system would be less costly and more sustainable in the long-term than an insurance scheme approach. However, more innovative financing for health care as well as giving the health sector higher priority in government expenditure will be required to make the non-contributory financing mechanism more sustainable.
Highlights
The need to provide quality and equitable health services and protect populations from impoverishing health care costs has pushed universal health coverage (UHC) to the top of global health policy agenda
Under the non-contributory scenario, coverage of informal sector and indigent populations is expected to increase to 98% in the second year of implementation because it targets everyone and is easier to implement compared to the contributory scenario where coverage increases gradually throughout the simulation (2013–2030)
The results indicate that the non-contributory scenario has the potential to generate higher total revenues throughout the simulation
Summary
The need to provide quality and equitable health services and protect populations from impoverishing health care costs has pushed universal health coverage (UHC) to the top of global health policy agenda. Mandatory prepayment for services are preferred because they potentially generate high revenue, promote risk and income crosssubsidization and minimize financial barriers to access [3] Because they tend to include the entire population or a large majority of it, mandatory prepayment systems address problems of adverse selection, are financially secure and benefit from economies of scale as well as contribute to the improvement of equity in the distribution of health resources [4, 5]. They are domestic financing sources and this makes them more sustainable and predictable for the long term
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