Governments around the world are scrambling to get their hands on personal protective equipment, test kits, ventilators and oxygen. But on the frontlines of service delivery in Kenya, we are also hearing about local health officials and facility managers needing money for more mundane things like fuel for ambulances and airtime for mobile phone communication to coordinate the response. Even as the Government of Kenya reallocates existing funds and mobilizes additional resources to address the pandemic, it is imperative that the funds flow down to health facilities. And that health facilities have the authority to spend those funds to cover basic costs. That this is not happening highlights underlying health systems challenges that existed before COVID-19.
Recent commentary has started exploring the health financing dimensions of the COVID 19 response. Some have offered estimates of how much additional funding LMICs need to respond to the pandemic, and compared that need against available domestic financing. Others have provided insight into ways countries can maneuver within existing public financial management (PFM) systems to increase the budget for health as well as guidance on key health financing decisions countries need to focus on in order to respond coherently to the pandemic. We offer reflections from Kenya to explore how some of these processes are playing out in practice, focusing on the flow of funds from the National Government to county governments, and from county governments to health facilities.
Ability of county governments to allocate resources to the response
Kenya’s PFM law (section 110 -115) allows county governments to set up an emergency fund, which can be activated during a disaster without any further legislative action. While some counties have activated such funds, many have not. To spend beyond those contingency funds, county assemblies need to pass supplementary budgets. This has faced delays, in part due to the national curfew, ban on meetings, travel restrictions, and physical distancing measures. Regardless of whether counties set out to draw from their emergency funds or newly appropriated funds, they are all reliant on transfers from the national government to finance their budgets. Given the history of delayed disbursements, counties have called upon Treasury to ensure timely transfers.
Flow of funds to health providers
The county having funds to spend on the COVID response does not guarantee that the funds flows down to healthcare facilities. Kenya shifted to a devolved system of government in 2013. The newly formed county governments control all primary and secondary health facilities in the public sector. According to the PFM law (section 109), all funds collected by public facilities are to be remitted to the county government unless the county passes legislation allowing facilities to receive and retain funds. Before devolution, health facilities collected revenue from user fees and insurance reimbursements, which they used to pay for costs like casual workers, facility maintenance, and commodities during stock-outs. Their operating budgets also financed the activities of health facility management teams and community outreach efforts. Post-devolution, most counties moved to centralize all revenue in the county coffers at the expense of health facilities, especially hospitals. While the county government is meant to pay for facility costs directly, this is unreliable and slow in practice. Some counties have enacted legislation to create “facility improvements funds” where facility revenue is collected, and then used by facilities. But the counties that have these arrangements are the exception rather than the norm. Majority of public health facilities in Kenya are dependent on county governments to pay for the most basic of needs.
Both of us authors of this blog are associated with programs of work for strengthening health purchasing at the county-level in Kenya. At their core, these efforts are about making counties better at spending money for health and linking their allocations to the performance of providers. It has increasingly also become about advocating for county governments to grant public facilities greater financial autonomy. COVID 19 further underscores the need for Kenya to strengthen purchasing arrangements such that, among other things, they allow public facilities to spend funds quickly (but with accountability) on things they need to deliver health services effectively, under normal circumstances and during COVID 19!
Nirmala Ravishankar (ThinkWell, USA) and Edwine Barasa (KEMRI Wellcome Trust, Kenya). Authors thank Boniface Mbuthia, Shano Guyo, Daniel Koech, and Felix Murira for their inputs.
