The fall and rise of cost sharing in Kenya: the impact of phased implementation.

ABSTRACT

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.