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									                              REPUBLIC OF KENYA




                             MINISTRY OF HEALTH




RHF UNIT COST/COST SHARING REVIEW STUDY
     & THE IMPACT OF THE 10:20 POLICY




Planning Department
Afya House, Cathedral Road
P. O. Box 30016
NAIROBI

November, 2005
ACKNOWLEDGEMENTS


                                                           10
This report which gives an assessment of the impact of      /20 policy and provides information on the level of
resources required for delivering services at health centres and dispensaries was prepared by Ministry of
Health through the support of Department for International Development (DFID).


By conducting facility based, community and exit (patient) surveys in a representative sample of health
                                                                                       10
centres and dispensaries in six Districts, the study has come out with the impact of     /20 policy. The impact
of the policy contained in the main report covers effects of the policy on utilization, cost sharing revenues,
community participation and effects on staffing levels and other services. The report has also given detailed
assessments of the unit costs of delivering a range of services at primary care. The information provided
will guide the Ministry of Health in making informed policy decision on the level of funding required to provide
services at the primary levels. With the support from Ministry of Health staff both in the field and at the
Headquarters, this study was successfully completed. I wish therefore to express my sincere thanks and
appreciation to the Hon. Minister for Health, Mrs. Charity Kaluki Ngilu, MP, the Permanent Secretary, Mr.
Patrick Khaemba and the Director of Medical Services, Dr. James Nyikal for the support they gave for
successful completion of the study. My gratitude also goes to the district health personnel, patients and the
communities who provided valuable information to the study team.


My special thanks go to Marilyn McDonagh of Department for International Development (DFID) for the
financial and technical support given to carry out the study; to John James, Dr. Peter Mokaya and HLSP
Secretariat for their technical and logistical support.


I am indebted to the consulting team composed of Gondi Hesbon Olum, Lead Consultant, John Kamigwi,
Health Economist, Stan Wijenje, Costing Specialist and Mark Pearson, International Health Expert and all
Research Assistants who successfully conducted the study.




S. N. Muchiri
Head: POLICY PLANNING AND DEVELOPMENT DIVISION




                                                 Page 2 of 120
                             ABBREVIATIONS
AIDS     Acquired Immuno-Deficiency Syndrome
ANC      Antenatal Care
COG      Church of God
cm       Centimetres
CPK      Church of the Province of Kenya (Anglican)
DHMB     District Health Management Board
DHMT     District Health Management Team
Disp     Dispensary
DMOH     District Medical Officer of Health
FP       Family Planning
GK/GOK   Government of Kenya
GUD      Genital Ulcer Disease
HC       Health Centre
HIV      Human Immuno-deficiency Virus
KECHN    Kenya Enrolled Community Health Nurse
KEMSA    Kenya Medical Supplies Agency
Kg       Kilogram
KNH      Kenyatta National Hospital
K Shs    Kenya Shillings
IMF      International Monetary Fund
Inj.     Injection
M        Metres
Mg       Milligram
Ml       Millilitres
MOH      Ministry of Health
NHA      National Health Accounts
NSHI     National Social Health Insurance
ORS      Oral Rehydration Salts
PCEA     Presbyterian Church of East Africa
PID      Pelvic Inflammation Disease
PMTCT    Prevention of Mother to Child Transmission of HIV
RHF      Rural Health Facilities
Sch      School
SDA      Seventh Day Adventist
SPSS     Statistical Programme for Social Scientists
STD      Standard Deviation
STI(s)   Sexually Transmitted Infection(s)
TABS     Tablets
TB       Tuberculosis
TT       Tetanus Toxoid
URTI     Upper Respiratory Tract Infection
US$      United States of America Dollar
TOR      Terms of Reference




                                 Page 3 of 120
TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................... 4
EXECUTIVE SUMMARY ................................................................................................. 6
1. INTRODUCTION ....................................................................................................... 22
   1.1 Background to the study ....................................................................................... 22
   1.2 Rationale for the study ........................................................................................ 23
   1.3 Specific Tasks of the Study ................................................................................. 23
2. METHODOLOGY....................................................................................................... 25
   2.1 Sampling Strategy ................................................................................................ 25
   2.2 Sample size and selection process ...................................................................... 25
   2.3 Data Collection Coverage .................................................................................... 26
   2.4 Data Analysis ....................................................................................................... 27
   2.5 Problems Encountered ......................................................................................... 27
3. HEALTH FINANCING SITUATION IN KENYA ......................................................... 28
   3.1 Role of Dispensaries and Health Centres ............................................................ 28
   3.2 An Overview of the Financing of Health Centres and Dispensaries ..................... 29
   3.3 Key Characteristics of Financing Arrangements in Peripheral Facilities ............... 29
   3.4 International Experience with User Fees .............................................................. 31
   3.5 Recent National Trends in Cost Sharing Programme ........................................... 32
   3.6 Trends in Cost Sharing Revenue in Health Centres ............................................. 33
4. THE IMPACT EVALUATION OF 10/20 POLICY........................................................... 35
   4.1 Approach .............................................................................................................. 35
   4.2 Analysis and Discussion ....................................................................................... 36
     4.2.1 Immediate Impact .......................................................................................... 36
     4.2.2 Impact on Total Out Patient Attendances (Overall Workload of the Facility) .. 38
     4.2.3 Impact on the Number of Patients Attending (New Visits and Reattendances)39
     4.2.4 Impact on the Number of Curative Interventions Provided (New Cases) ....... 41
     4.2.5 Impact on Utilisation of Specific Interventions ................................................ 42
     4.2.6 Utilisation Trends for Preventive Care and In Mission Facilities .................... 45
     4.2.7 Impact on Revenue Collection ....................................................................... 47
     4.2.8 Trends in Reported Expenditure of Cost Sharing Funds................................ 50
     4.2.9 Trends in Use of Cost Sharing Funds ........................................................... 53
     4.2.10 Impact on Range of Services Provided ........................................................ 57
     4.2.11 Patient Perceptions on the Cost Sharing Policy ........................................... 58
     4.2.12 Health Workers’ Perceptions ...................................................................... 60
     4.2.14 Availability of Drugs ..................................................................................... 62
     4.2.15 Governance and Operational Issues ........................................................... 67
   4.3 Key Conclusions................................................................................................... 68
5. ADEQUACY OF RESOURCES TO PROVIDE ESSENTIAL SERVICES .................. 71
   5.1 Introduction........................................................................................................... 71
   5.2 Resource Allocation to RHF ................................................................................. 72
   5.3 General Findings Related to Human Resources .................................................. 72
   5.4 General Findings Related to Non Salary Expenditure .......................................... 75
   5.5 Assessment of Current Expenditures in Health Centres and Dispensaries .......... 78
   5.6 Assessment of Health Centre and Dispensary Financial Needs Given Existing
   Utilisation Levels ........................................................................................................ 80
                                                       Page 4 of 120
5.7 Assessment of Health Centre and Dispensary Financial Requirements Given
Increased Utilisation Levels ........................................................................................ 85
5.8 Conclusion............................................................................................................ 89
Annex 1: Guidelines on Facility Norms and Standards .............................................. 91
Annex 2: Health Financing Situation in Kenya ........................................................... 92
Annex 3: Background to User Fee Policy .................................................................. 96
Annex 4: District Allocation Budget for Financial Year 2003 – 2004: Vote R11 335 ... 98
Annex 5: Details Analysis of Financial Requirements for Human Resources ............. 99
  1. Costs of Achieving the Staffing Norms in Dispensaries .................................... 100
  2. Costs of Achieving the Staffing Norms in Health Centres ................................ 105
Annex 6: Methodology for Costing Analysis ............................................................. 113




                                                    Page 5 of 120
EXECUTIVE SUMMARY

1. Purpose

The aim of this study is two-fold:

       to assess the lessons to be drawn to date in the implementation of the 10/20 cost
        sharing policy,

        to assess what other constraints, both financial and non-financial, are impeding
        access by poor people to services and the specific interventions required to allow
        improved access, and

       to estimate the current unit costs of delivering services at health centres and
        dispensaries and, on the basis of this, make estimates about the level of resources
        that should be allocated to these facilities

2. Methodology

A series of surveys – facility based, community surveys and exit (patient) surveys were
carried out in a representative sample of health centres and dispensaries in 6 districts
(Kilifi, Meru South, Uasin Gishu, Kakamega, Narok and Isiolo). Full details are contained
in the main report and annexes.

3. Cost Sharing: Key Findings

3.1 Introduction

The changes in cost sharing policy can be summarised as follows:

   Pre 10/20 Policy: Prior to July 2004 the Government of Kenya’s cost sharing policy
    allowed facilities to set fees locally. Facilities were required to return the revenues
    collected to the district level and develop a plan for spending 75% of the balance. This
    plan was approved at both district and provincial levels. 25% of the revenue was
    retained at the district level. In parallel, both dispensaries health centres, also raised
    Community Funds, which were totally under the control of the facility.

   Post 10/20 Policy: The 10/20 policy, introduced in health centres and dispensaries on
    July 1st 2004, set a standard fee of 10 K Shs at the dispensary level and 20 K Shs at
    health centres. The policy was introduced at short notice and little guidance was given
    on its implementation. The requirement to return funds to the district level appears to
    have been dropped with resources spent as they are raised. The 10/20 policy has also
    effectively resulted in the abolition of community fund approach.



                                        Page 6 of 120
Approach to Assessment of Impact:

The impact of the change in policy was measured according to a number of criteria
including:

      the extent to which the new policy actually reduced official fees charged to patients
       (immediate impact) and
      the effects of the policy on utilisation, facility revenues, changes in the range of
       services delivered (including changes in staffing levels) and stakeholder views
       (broader impact)

3.2 Effects on Fee Levels

In terms of immediate impact the policy has resulted in a significant reduction in official
user fees – especially for services such as deliveries - at lower level facilities. Fee levels
in Government facilities differed widely before July 2004 – hence the extent to which fees
have declined has been variable. Fees for deliveries were already far below those
charged in mission facilities. The system has also been simplified with multiple charges
replaced by a single one-off fee. Previously patients were also charged significant
amounts for drugs and laboratory tests and, rather surprisingly, charges at dispensaries
(through community funding) often exceeded fees charged in health centres and even in
mission facilities. By and large facilities have adhered to the new policy although around a
third of patients in dispensaries reported payments different from the official rate. It should
be noted that in 2005, dispensaries disregarded the 10/20 policy and proceeded to charge
a higher fee. The study did not address the question of what impact the change in policy
has had on other costs associated with access to public health services. It is clear that
cost sharing only accounts for a small share of the overall out of pocket spending. Any
efforts to improve access, therefore, need to focus on these areas as well.

3.3 Effects on Utilisation

The findings suggest that the overall impact has been mixed. Utilisation of services in
the sample facilities generally increased rapidly following the introduction of the policy.
However, this growth was not sustained. In the last quarter of 2004 many facilities
generally experienced declining utilisation although the picture varies by district and
according to the type of service and utilisation remains, on the whole, above levels in the
first quarter of 2004. In the first half of 2005 utilisation of services at health centres
appears to have increased and is now roughly back at the levels experienced in July
2004. Utilisation in dispensaries has seen a slight decline in 2005 although, again, it
remains above levels before 10/20 was introduced.

These findings need to be set against a backdrop in which utilisation already differed
enormously between the sample facilities – with high levels of utilisation in Kilifi and Meru
South and much lower rates in Narok and Isiolo attributable to the drought and nomadic
lifestyles of the population.


                                        Page 7 of 120
It would appear that the failure to provide additional complementary inputs such as drugs
in the face of the increased workload, plus concerns about waiting times associated with
higher workload, have been primarily responsible for the fall in utilisation. Indeed, the
receipt of drug kits at the facility level seems to have fallen at the very time that
utilisation increased. This issue is not so much an overall lack of drugs but a failure to
ensure that district stocks are delivered to facilities. An increased supply of drug kits also
seems to be associated with an increase in utilisation in December 2004 and May 2005
though it is not clear whether this represents a trend. The chart below and the one on the
following page indicate that the supply of Drug-Kits is very erratic and does not follow
demand. The content of the drug kits was also felt, in many cases, to be poorly suited to
needs at the local level and many facilities reported stock outs – of antibiotics and to a
lesser degree, anti-malarials.

                                             Average Total Outpatient Visits in Health Centres by Districts Vs Trends in Supply of Drug-Kits


                               14000           UASIN GISHU                                                                                         25.00
                                               NAROK
                                               MERU SOUTH
                               12000           KILIFI
                                               KAKAMEGA
                                                                                                                                                   20.00
                                               ISIOLO
                                               DRUGS
                               10000




                                                                                                                                                           Averaga Number of Drug-Kits
 Average Number per Facility




                                                                                                                                                   15.00
                               8000




                               6000
                                                                                                                                                   10.00



                               4000


                                                                                                                                                   5.00

                               2000




                                  0                                                                                                                0.00
                                       Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec   Jan   Feb   Mar   Apr   May   Jun




                                                                                               Page 8 of 120
                                             Average Total Outpatient Visits in Dispensaries by District Vs the trends in Supply of Drug-Kits by
                                                                                          District


                                9000                                                                                                                20.00
                                                UASIN GISHU
                                                NAROK
                                8000            MERU SOUTH                                                                                          18.00
                                                KILIFI
                                                KAKAMEGA                                                                                            16.00
                                7000
                                                ISIOLO




                                                                                                                                                            Average Number of Drug-Kits Supplied
                                                DRUGS
                                                                                                                                                    14.00
  Average number per facility




                                6000

                                                                                                                                                    12.00
                                5000
                                                                                                                                                    10.00
                                4000
                                                                                                                                                    8.00

                                3000
                                                                                                                                                    6.00

                                2000
                                                                                                                                                    4.00


                                1000                                                                                                                2.00


                                  0                                                                                                                 0.00
                                       Jan    Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec   Jan   Feb   Mar   Apr   May   Jun




Facilities remain heavily reliant on in-kind support through the provision of drug kits. Few
districts were able to use general budgetary resources to purchase additional drugs or
other items to meet their shortfalls. Though districts receive allocations to meet such
costs (budget line 335) they do not appear to flow down to the facility level. Indeed few
facilities are even aware of their existence with some districts claiming that they are not
aware that these funds are to be used at lower level facilities. At the same time the
magnitude of these funds is small in comparison with cost sharing revenue and even if
released would make relatively little difference to the overall financing of services.

3.4 Effects on Cost Sharing Revenues

Staff costs account for a high proportion of spending at facility level and some districts –
especially Meru South and Uasin Gishu – are far better resourced and have far higher
staffing levels than others. These districts also performed better in terms of mobilising
revenue through cost sharing further widening imbalances in the overall allocation of
resources. Although cost sharing revenues form a relatively low share of overall spending
at the facility level – typically around 10% - they are important at the margin especially in a
situation where financial support for other non salary expenses is extremely limited.

User fee revenue has declined significantly following 10/20 and the abolition of the
community funds is running at around half previous levels. Better off districts such as
Uasin Gishu, Kilifi and Meru South, this previously raised significantly more resources
than other districts, experienced the largest absolute fall. Expenditure of user fee
revenues also declined significantly following 10/20 but appears to have increased again
in the last quarter of 2004. Since July reporting of collections to MOH on collections has
declined significantly. In 2005 there has been an increase in cost sharing revenues in
                                                                                                Page 9 of 120
dispensaries though this is almost all accounted for by Meru South. It should be noted that
after December 2004, due to the abrupt decline in User Fee Revenues, without the
requisite recompense from the government, the facilities have continued to charge for the
various services and ignored the 10/20 directive. Revenues have thus gone up again as
depicted in the graph below. In health centres, by contrast, revenues appear to have fallen
further.

                                                     Revenues from Cost Sharing and Community Funding in
                                                           Dispensaries: January 2004 to June 2005
                                 80,000
                                                                                                                                                                    UASIN GISHU

                                                                                                                                                                    NAROK
                                 70,000
                                                                                                                                                                    MERU SOUTH

                                                                                                                                                                    KILIFI

                                 60,000                                                                                                                             KAKAMEGA

                                                                                                                                                                    ISIOLO
 KShs (average per facility)




                                 50,000



                                 40,000



                                 30,000



                                 20,000



                                 10,000



                                    -
                                            Jan    Feb   Mar    Apr     May         Jun     Jul    Aug   Sep    Oct     Nov         Dec     Jan    Feb      Mar    Apr       May   Jun




                                            Revenues from Cost Sharing and Community Financing in Health Centres
                                  350,000
                                                                                                                                                         UASIN GISHU
                                                                                                                                                         NAROK
                                  300,000                                                                                                                MERU SOUTH
                                                                                                                                                         KILIFI
                                                                                                                                                         KAKAMEGA
                                  250,000                                                                                                                ISIOLO



                                  200,000
                         K Shs




                                  150,000



                                  100,000



                                   50,000



                                        -
                                             Jan   Feb   Mar   Apr    May     Jun     Jul    Aug   Sep   Oct   Nov    Dec     Jan     Feb    Mar   Apr     May    Jun




                                                                                                  Page 10 of 120
The fact that utilisation is increasing in health centres where cost sharing revenue is
declining and declining in dispensaries where cost sharing is still being promoted provides
further evidence of the impact of cost sharing on utilisation.

User fees are internationally recognised as an inequitable and inefficient means of raising
revenue. During the pilot visits it emerged that the cost of the receipt books alone
accounted for more than 15% of gross revenues in one facility, highlighting their
inefficiency as a funding source. The costs of staff required to collect and administer the
revenue will have eroded this revenue further. In terms of net revenues it is likely,
therefore, that the decline has been even greater. Given the reduction in revenues it is
important therefore that management arrangements are kept simple. If this is not possible
within current financial regulations it is doubtful whether the policy will generate any
significant net revenues.

The study found that health centres and dispensaries use cost sharing funds in very
different ways. Dispensaries spend the vast majority on employing casuals whilst health
centres spend a higher proportion on non-salary items such as drugs and generally spend
their funds on a wide range of items. These patterns of spending have remained relatively
unchanged since the introduction of 10/20. The study team generally felt funds were being
spent on appropriate items

3.5 Effects on Staffing Levels and Range of Services

A number of staff were laid off as a direct result of the reduction in facility revenue
associated with the 10/20 policy. A total of 32 staff had been laid off including 8 cleaners
and 10 watchmen. Over a third of these redundancies were in Kilifi, which experienced
one of the biggest declines in revenue. However, in the first half of 2005 no more staff
were laid off as most facilities disregarded the policy. It was further reported that 5
facilities – 3 in Uasin Gishu and one each in Kilifi and Isiolo - had discontinued laboratory
services.

It appears that a number of laid off laboratory staff are establishing private practices in the
vicinity of the facilities implying that whilst the range of services may not be declining, the
financing of these services is effectively being privatised.

                    Number of Facilities that had laid off staff by District and Cadre

      DISTRICT           CLEANER         WATCHMAN               LAB              OTHERS   TOTAL
                                                             TECHNICIAN
      Isiolo                 -                  1                3                   1      5
      Narok                  2                  -                -                   -      2
      Kilifi                 2                  3                -                   6     11
      Kakamega               3                  3                -                   1      7
      Meru South             -                  1                -                   -      1
      Uasin Gishu            1                  2                -                   3      6
      TOTAL                  8                 10                3                  11     32

The patient surveys revealed that two thirds of patients were charged for services; there is
no evidence that poorer groups (those with only basic education) were any more likely to
                                            Page 11 of 120
be given free services. A rough comparison of actual revenues during the last half of 2004
to potential revenues (applying the relevant fee to the number of services and assuming
30% of patients are children who are exempt) suggests that health centres are performing
relatively well. Children are exempted in almost all public facilities and waivers are
generally given based upon the observation at the facility level. Poorer patients are
relatively more likely to use dispensaries so Government needs to focus its attention and
resources here if it is to improve access for poorer groups.

3.6 Views of Key Stakeholders

In terms of stakeholder perceptions views are quite polarised. The policy is generally
popular with patients – but not with health workers. Patients and communities are
generally happy about the reduction in fees, which improves access by reducing an
important (but by no means the only) barrier they face to using health care.

Roughly twice as many community respondents felt that 10/20 have improved things than
those who thought it had made matters worse. Health workers, on the other hand, are
concerned about the additional workload and decline in operational funds associated with
the policy. Whilst the workload concerns are undoubtedly justified in some settings –
workload patterns do vary enormously between facilities and in many cases the increases
experienced should not have presented a major problem.

Whilst community representatives did not generally see health as one of the major causes
of poverty they did see it as an important cause. Geographical convenience, availability of
drugs and supplies, cost and staff attitudes were all highlighted as key factors behind the
choice of facility.

The current fee levels are felt to be more than reasonable. Indeed, patients in health
centres and dispensaries would be willing to pay much more. Fees at mission facilities, on
the other hand, are felt to be too high. This raises the question as to whether Government
should consider:

   increasing fee levels in public facilities and/or
   providing financial support to Mission facilities to help reduce the pressure on fee
    levels and make services more affordable.

Concerns that lower fees in public facilities would attract patients from mission facilities
and compromise their financial stability do not seem to have been borne out by the
evidence.

3.7 Effects on Community Participation

In many cases it was felt that local ownership and participation at the facility had
declined as a result of the 10/20 policy. Facility management committees have become
less active – given the declining levels of resources that they were responsible for. It was
also reported that whereas previously communities were prepared to contribute resources
for example for the delivery of drugs it is now seen more as a Government responsibility.
                                      Page 12 of 120
It was found that in the first half of 2005, communities have disregarded the 10/20 policy
and are charging much higher.

4. Cost Sharing: Issues and Options

4.1 The need for complementary inputs and actions

Reducing user fees may be a necessary measure but alone will not be sufficient to
significantly improve access to health services for the poor. Government needs to pay
attention to the complementary measures necessary to improve performance at peripheral
levels and support the implementation of the cost sharing policy. Key study findings
included:

      the failure of resources to trickle down to the facility level emphasises the
       importance of greater clarity in budgetary processes at the very least. Facilities
       need to be aware of budgets available to them under head 335 and districts need
       to be aware of their responsibility to pass these funds on. Ideally resources should
       be released direct to facilities
      the disparity in funding levels at facility level and the need to ensure that the
       resource allocation process takes into account both access to alternative funding
       sources as well as workload
      the importance of adequate and timely supplies of drugs but also the need to relate
       drug supplies more closely to need at the facility level
      shortfalls in both the number and distribution of staff and the need to:

          recruit and post more nurses and other staff who can provide specialised
           services such as maternity and pharmacy in these facilities.
          ensure support staff are in place to ensure adequate cleanliness and security.
           Costs will need to be met by Government if cost sharing funds are insufficient

4.2 The future of 10/20

The broad options would be:

      to maintain the existing approach and strengthen implementation
      to raise user fees to levels felt affordable by patients – a 40/80 policy or a 20/40
       policy. This would meet some of the concerns of health workers, it would increase
       net revenues and would still be largely affordable to patients
      to abolish fees entirely in view of the low level of resource raised. This would
       require steps to ensure that facilities are able to access non salary resource from
       alternative sources

It is recommended that Government critically review these options in the light of the
objectives of the current policy and its failure to fully achieve its desired objectives. If the
aim of 10/20 is to raise significant net revenue it probably fails to do so. If it aims to
improve quality its ability to do so is constrained by a failure to address other important
factors such as drug supply
                                        Page 13 of 120
4.3 Management arrangements

As well as additional resources facilities also need flexibility in how these resources are
used. Community funds, despite being relative modest in size were very popular as they
were fully flexible. It is difficult to see how the old arrangements for use of funds could be
applied under the 10/20 policy. The system is bureaucratic and costs of administration
would significantly erode net revenues.

4.4 Assessing the Longer Term Impact

It is fairly evident that the response to 10/20 is complex and is evolving.

5. Costing: Key Findings

5.1 Introduction

The study attempted to assess the costs of delivering a range of services at health centres
and dispensaries. It is recognised that current resources – especially non salary resources
– are lacking at lower levels. As such an attempt was made to assess the unit costs based
on an ideal allocation of resources based on current (i.e. pre July 2004) levels of
utilisation. However, it is recognised that provision of additional inputs is likely to increase
demand for health services. As a result the implications of a doubling of workload were
also assessed.

Key findings included:

      major staffing shortfalls in relation to the norms - shortfalls are greatest at
       dispensary level; in dispensaries shortfall in support staff is most important, in
       health centres the problem is lack of health workers
      wide variation in staffing levels and workload between facilities, districts and
       provinces with average workload declining as number of workers increases
      possible potential for reallocating surplus staff
      major shortfalls in supplies especially STI kits, non pharmaceuticals, drugs not
       included in drug kits
      a mismatch between supplies and needs with districts in greatest need often having
       lowest supplies
      inconsistencies between treatment protocols and the content of drug kits




5.2 Current Expenditures

                                        Page 14 of 120
Based on resource allocation pattern observed for the 2004 calendar year, the average
annual cost per RHF in the six sample districts amounts to KShs. 3 million for Health
Centres and Kshs. 1.2 million for dispensary (see table 5.8).

There are however major shortfalls in both staffing (comparing current staffing levels to
the existing norms – see table below) and also in non-salary items. As a high proportion of
costs are fixed (i.e. salaries) unit costs are heavily dependant upon the level of workload.

Human Resources

Actual staffing levels were compared to those of the existing staffing norms. The total
annual shortfall was estimated to be some K Shs 1.77bn annually (KShs 1.08 bn for
health centres and KShs 692 m for dispensaries). Though both types of facility have major
shortfalls health centres are particularly disadvantaged with only 34% of requirements met
compared to 46% for dispensaries.

                      Financial Shortfall: Reach Staffing Norms by Type of Facility and
                                                   Staffing
                                          Total Shortfall 1,774 m Shs annually
                           1,082 m Shs for Health Centres: 39% of requirements currently met
                              692 m Shs Dispensaries: 46% of requirements currently met
              1,800


              1,600                                                                            Shortfall (Support
                                                                                               Staff)
              1,400


              1,200
                                                                                               Shortfall (Health and
              1,000                                                                            Administration )
      m Shs




               800


               600
                                                                                               Current Expenditure

               400


               200


                 0
                            Health Centres                            Dispensaries




There is wide regional variation with North Eastern and Coastal provinces having the
highest proportional shortfall for dispensaries and North Eastern and Nyanza provinces for
health centres. Nairobi and Central provinces are relatively well covered. For dispensaries
the main shortfalls are in terms of support staff whereas for health centres the lack of
health workers and administration staff is more of an issue.




                                                Page 15 of 120
              Financial Shortfalls: Achieving Staffing Norms in Dispensaries
                                        by Province
     100%




     80%
                                                                                                      Shortfall: Support
                                                                                                      Staff


     60%                                                                                              Shortfall: Health
                                                                                                      and Administration
 %




     40%
                                                                                                      Current



     20%




      0%
            Central   Coastal   Eastern   Nairobi    North     Nyanza    Rift    Western   National
                                                    Eastern             Valley




Significant numbers of staff are employed in excess of the current norms – especially in
the Rift Valley and Central provinces and to a lesser extent in Eastern, Nyanza and
Western Region. This, and the fact that facilities with staffing above the norms were found
to have lower workload, which conflicts with the intended policy, (see below) suggests that
some redistribution of staffing might be feasible. This would clearly serve to reduce any
financial shortfalls. If all excess staff were to be redistributed (which is not realistic) the
shortfall would decline to some K Shs 472m for dispensaries and K Shs 869 m for health
centres. This, and the fact that Nyanza and Coastal provinces have the largest shortfalls
suggests that these areas might be given initial priority

The findings also suggest the need for clarity on how the costs of support staff are met. At
present, they are mainly covered under sharing. However, as 10/20 has reduced the
capacity of facilities to employ such staff it will be important to consider their continued
relevance and take a view on who should fund them.

Evidence from the recent Human Resource mapping exercise and data collected through
the facility survey indicates that workload varies significantly between facilities. Overall
workload tends to increase with the number of staff but the average workload per health
worker declines with the number of staff. Average workload in dispensaries was found to
be highest in Nyanza and Coastal provinces and lowest in North Eastern and Nairobi
provinces. For health centres average workload was found to be highest in Coastal,
Nyanza and Central provinces and lowest in Nairobi and Rift Valley.

Non Salary Costs

There are significant shortfalls in terms of drugs and non-pharmaceuticals. Some key
drugs are not available in drug kits. In the case of STI drugs very little is getting to RHF.
                                                              Page 16 of 120
The study noted that there is a major problem in delivery of drugs to RHF, which suggests
the need for a thorough review of the supply chain.

The solution to these supply issues is to just increase the number of kits supplied, but to
identify the specific inputs (drug and non-pharmaceuticals) required. Doubling or tripling of
drugs kits supplied will simply mean over-supplying some drugs, while not addressing
some critical ones that are not being provided at all.

5.3 Ideal Cost at Current Utilisation Level

From the analysis of inputs required to address specific health needs, it is evident that
introduction of PMTCT (especially for children) has a major effect on costs due to the high
cost of Nevirapine Syrup for children. As already pointed out, based on the resource
allocation pattern observed for the 2004 calendar year, the average annual cost per RHF
in the six sample districts amounts to KShs. 3 million per Health centres and Kshs. 1.2
million per dispensary. The annual total cost for all RHF currently is therefore
approximately KShs. 3.16 billion.

However, the average resource requirement (ideal for quality services) per RHF, based on
current service utilisation levels, is KShs. 10.211 million for a health centre and about
Kshs. 1.8 million for a dispensary. At national scale, this would require KShs 4.493 billion
for health centres and KShs. 2.698 billion for dispensaries. This amounts to an annual
total cost of KShs. 7.2 billion for all RHF. This means that to adequately provide quality
services at current service utilisation levels an increase of 128 per cent in resources is
required.

5.4 Projected Cost with Improved Services

Such improvement in quality of health services at RHF would result in increased demand
by up to 100 per cent. This would further require additional resources [meaning either (1)
doubling existing staffing levels accompanied by increased input of consumables as per
need or (2) applying staffing norms coupled with increased input of consumables as per
need]. Either of these two options would require an increase in resources by about 260
per cent, to KShs. 11.24 billion (scenario 1) and KShs. 11.406 billion (scenario 2).

The resource requirements are presented in the summary table below.




                                       Page 17 of 120
                            Summary of Estimated Costs under Various Scenarios

Cost Category                  Current Cost            Ideal Costs Based       Ideal Costs Based        Ideal Costs Based
                                                       on Current              on Increased             on increased
                                                       Utilisation             Utilisation              Utilisation

                                                                               Scenario 1               Scenario 2

                               (Kshs. million)         (Kshs. million)         (Kshs. million)          (Kshs. million)
                                    HC         Disp        HC          Disp         HC         Disp          HC         Disp
Personnel                          1.34        0.39         3.5      0.649        2.677        0.78          3.5      0.649

Consumables                       1.374         0.69        6.4        0.913     12.785         1.826     12.785     1.826
Others                            0.277        0.119       0.31         0.19       0.31          0.19       0.31       0.19


Total (Sample Facilities)         2.991        1.199      10.21        1.752     15.772         2.796     16.595     2.665

Total (All Facilities)         1,316.04   1,841.66     4,492.40   2,691.07     6,939.68   4,294.66      7,301.80   4,093.44
Total (Dispensaries +
Health Centres)                     3,157.70                7,183.47                11,234.34                11,395.24
% Increase in
Requirements                                                127.49%                 255.78%                  260.87%



Since this study could not look at each service and related inputs in detail, more work is
needed in this area. Furthermore as treatment policy changes, for example in relation to
malaria, and as new interventions are introduced at RHF (e.g. ART) the costing has to be
reviewed. This study however provides a framework for cost analysis focusing on the
inputs necessary under each intervention, even when there is a change in treatment
guidelines and unit cost of inputs. Further work will however be required on equipment
and physical infrastructure. This is an area where this study could not exhaustively handle.

A major caveat to this analysis is the issue of financial management problems. There is
little point in carrying out an exercise to identify costs if the systems do not ensure that
resources actually flow to their intended destination. As such it is recommended that
Government consider establishing a dedicated budget line for allocations to lower level
facilities and take steps to ensure resource flows are forthcoming

Key Recommendations

It is accepted that many of these recommendations do not refer specifically to the cost
sharing policy itself. This reflects the fact that cost sharing needs to be seen as part of a
broad range of actions to improve access and that action on user fees alone is likely to
achieve relatively little.




                                                       Page 18 of 120
The Key Recommendations are as follows:

   1. to improve the evidence base on out of pocket expenditures as a whole and its
      effects on access (as cost sharing only accounts for a minor proportion of out of
      pocket spending)

   2. to acquire a better understanding of the reasons for major differences in workload
      between facilities and districts

   3. address ongoing staffing shortages by:

         recruiting and posting more nurses and other staff who can provide specialised
          services such as maternity and pharmacy.

         ensuring support staff are in place to ensure adequate cleanliness and security.

   4. to review staffing norms to assess their relevance in current circumstances. To
      identify criteria for determining priority uses of limited funds and, if necessary, to
      identify intermediate targets for staffing norms based on likely availability of
      resources.

   5. review workload norms (to feed into 4 above)

   6. to consider the scope for reassigning staff where current norms are exceeded.

   7. to develop a clear policy on who is expected to fund support staff in view of
      reduction in cost sharing/community fund revenue

   8. to improve transparency in budgetary processes and involve the lower levels in
      determining resources to be allocated. Ideally resources should be released direct
      to facilities. Guidance should be given on what the funds are for and who they
      should be given to.

   9. to ensure that the resource allocation process takes into account both access to
      alternative funding sources as well as workload

   10. to improve value for money from expenditure on pharmaceuticals by

         considering how to relate drug supplies more closely to need at the facility level
         reviewing the content of drug kits
         reviewing the consistency of drug kit content with current treatment protocols

   11. to study the reasons for, and means of addressing, the bottlenecks preventing
       drug kits reaching the facilities



                                        Page 19 of 120
12. to critically review these future options for the cost sharing policy in the light of the
    objectives of the current policy and its failure to fully achieve the desired
    objectives

13. to carry out a follow up exercise to track utilisation and cost sharing revenue and
    expenditure trends for the first half of 2005. This could be done during the third
    quarter of 2005.

14.   to complete an analysis of the basic equipment required to deliver the health
      packages and annual requirements for replacement and operation and
      maintenance per year.

15. to undertake follow on costing work to look at items of service not covered in this
    study

16. to reinvigorate the HMIS system to support decision making processes




                                     Page 20 of 120
SUMMARY OF THE FINDINGS ON 10/20 POLICY BY DISTRICT
                                      10
  District               Views on       /20 Policy                 Impact on Service Utilization              Impact on Cost           Impact on Staff and                Recommendation
                                                                                                             Sharing Revenue             Drug Availability
Isiolo       1) Respondents were generally supportive of           1) There was no marked                   1) Data not readily       1) 5 staff were laid off       The respondents felt that those
             the policy                                            difference at the beginning of the       available and generally   2) Drugs were on average       who can afford should pay
             2) Some felt that because of the poverty in the       10/20 policy. In some facilities out     inadequate                available                      more and those unable to have
             District, the 10/20 policy is still high for health   patient services increased.              2) Available data show                                   free services.
             services                                              2) In 1st & 2nd Qtrs 2005, utilisation   decline
                                                                   decreased due to drought and
                                                                   nomadic lifestyles
Narok        1) The majority of health workers at the              Out-patient morbidity trend almost       There was decline in      Reduction on staff but         The Government should put
             facilities do not follow the policy because the       the same                                 revenue general           supply of drugs not            more input to sustain the
             local community committees requested them                                                                                affected. Some facilities      services.
             to charge more to sustain hiring of support                                                                              are manned by only one
             staff                                                                                                                    staff
             2) Patients and community support the policy
             so long as services do not deteriorate.
Kilifi       1) Patients satisfied with the reduction of fee       1) Increase in utilization of            There was steep           Lack of drugs and non-         1) More staff should be posted
             but unsatisfied with waiting time.                    facilities.                              decline in revenue        pharmaceuticals. Acute         2) Government should take
             2) Community unhappy as the policy is                 2) Some services like dressing                                     shortages of staff as 11       over community employees.
             discouraging their participation.                     and maternity discontinued in                                      were laid off.
                                                                   some facilities
Uasin        1) The policy can only work if Government             1) Increase in out patient utilization   There was drastic         1) Laid off support staff 2)   Government should maintain
Gishu        maintains adequate supply of drugs and non-           affected quality of services             reduction in cost         Could not purchase some        adequate supply of drugs,
             pharmaceuticals, employs enough staff and             especially in July when the policy       sharing and community     common drugs and               employ more staff and allocate
             allocates enough funds for recurrent and              came into effect                         funds                     reagents.                      adequate funds
             development expenditure                               2) Community pharmacies were                                       3) Lack of funds affected
             2) Circular on 10/20 was not clear                    closed and some essential                                          provision of transport to
             3) The policy affected the quality of services        services such as laboratory and                                    collect drugs from the
                                                                   maternity were discontinued.                                       District Medical Officer
Kakamega     The policy cannot work without increase in            1) Quality of services declined.         There was drop in cost    Decrease in manpower           1) Either increase user fees or
             user fees                                             2) Out patient attendance went up        sharing collection        and supply of drugs.           totally abolish them
                                                                   between July and September and                                     Seven support staff were       2) Establish health education
                                                                   then declined in October to                                        laid off.                      division in Rural health
                                                                   December, 2004                                                                                    facilities
                                                                                                                                                                     3) Set clear implementation
                                                                                                                                                                     and surveillance
                                                                                                                                                                     4) Sensitize people on 10/20
                                                                                                                                                                     policy
Meru         The policy is good since services are                 Utilization went up                      Cost sharing revenue      Lack of essential drugs,       1) Employ more staff
South        affordable                                                                                     decreased marginally      non-pharmaceutical             2) Government should ensure
                                                                                                                                      affected quality of            adequate supply of drugs and
                                                                                                                                      services.                      non-pharmaceuticals



                                                                                Page 21 of 120
1. INTRODUCTION

1.1 Background to the study

The Government of Kenya health vision as articulated in Kenya’s Health Policy
Framework is:

  To promote and improve the health status of all Kenyans through the deliberate
    restructuring of the health sector to make all health services more effective,
                              accessible and affordable.

To take forward this vision, the Government through the Ministry of Health (MOH) has
over the last couple of years been pursuing reforms in the health sector, through
involvement of various stakeholders. These reforms include:

      the identification of the most important health services and their prioritisation in the
       resource allocation process,
      improvements in management efficiency and in the delivery of services through
       decentralisation, streamlining of financial management systems and
      diversification of sources of funds.

The cost sharing programme was first initiated in December 1989 as a means of
diversifying sources of funds to the public health sector. A key objective of the cost
sharing programme has been to supplement Government financing of services offered by
the public health sector. Over time, cost sharing revenue has become a vital alternative
source of recurrent and even capital resources in public health facilities.

This programme mainly targeted public hospitals and health centres. Prior to July 2004
75% of the fees collected under the cost sharing programme were normally ploughed
back into the collecting health facilities on the basis of a plan agreed at district and facility
levels. The remaining 25% was used to support primary health services in the collecting
district. At dispensaries informal community managed funds commonly termed as
“Community Funds” (flat rate registration type of fee) were in operation. Even in health
centres where the official cost sharing programme has been implemented community
fund have also been in operation. This approach has been popular due to their flexible
management arrangements (the funds do not require higher authority for expenditure to
be incurred).

Concerns that the costs of health care was presenting a serious barrier to access led
Government to introduce the 10/20 policy in July 2004 to try and make services more
affordable. This policy requires dispensaries to charge patients registration fees of
KShs.10 and health centres KShs.20 per visit. Charges for preventive services, diagnosis
and treatment in public dispensaries and health centres were to stop by 1st July 2004.
Prior to this policy shift, health centres were charging much higher fees that were pegged
to individual services offered including drugs, laboratory tests etc.




                                        Page 22 of 120
1.2 Rationale for the study

There is major policy interest in the extent to which heavy reliance on out-of-pocket
contributions to fund health care may have undermined access by the vulnerable groups.
The cost sharing programme clearly contributes to this out of pocket spending. The issue
is of major importance because over half of the population lives below the poverty line
and around 9 million Kenyans are believed to have no access to modern health care. It is
not clear, to date, how effectively the 10/20 policy is contributing to improving access to
health services.

Government is also considering options for making secondary and tertiary care more
easily accessible and affordable to Kenyans through the National Social Health Insurance
(NSHI). It is anticipated that the NSHI will reduce financial barriers to secondary and
tertiary care as well as providing a stable source of additional revenues for the financing
of health services. By gradually increasing the rate of cost recovery NSHI is expected to
allow MOH to devote more of its own resources to primary health care and increase
access to the Kenya Essential Health Package. In return, better primary care should allow
more people to be treated in a cost effective manner at lower levels and reduce demands
on secondary and tertiary care providers.

This study is therefore aimed at assessing the impact of the 10/20 policy and also to
provide information on the resources required by the MOH to deliver more effective
services at health centres and dispensaries. Specifically the key objectives of the study
were to:

         assess the impact of the 10/20 policy on utilisation and on user fee revenue at
         dispensary and health centre levels.
         assess what other constraints – financial and non-financial - are impeding access
         of poor people to services and what specific interventions are required to improve
         access.
         estimate the resources required to maintain existing services without impairing
         quality or to finance a broader range of essential health services at these levels.


1.3 Specific Tasks of the Study

Under the TOR for the study, the specific tasks for the assignment were as follows:

1)       Using the Human Resource Mapping data base and MOH assessment of required
         staffing levels, estimate the overall staffing shortfall and costs of addressing it.

2)       Sample a representative of rural health facilities to assess changes in service
         utilization and estimate the revenue loss to the 10/20 policy. Learn more about other
         constraints to access and make recommendations on steps required to improve
         access.




                                        Page 23 of 120
3)   Identify factors relevant to costs of delivery essential services and estimate cost of
     different scenarios based on alternative assumptions about staffing levels,
     expenditure on drugs and other types of expenditure as relevant.

4)   Organize a stakeholders’ workshop to discuss the findings.




                                     Page 24 of 120
2. METHODOLOGY


2.1 Sampling Strategy

The stratified sampling method was adopted for the study to take account of the different
geographic, socio-economic, demographic, and health profiles. The districts in Kenya
(including Nairobi) were therefore stratified into six broad strata, based on the above
characteristics that affect access to health care. In particular, the relative incidence of
poverty and geographic characteristics that affect socio-economic activity, infrastructure
and access to health care were considered. A district was then selected randomly from
each stratum. This yielded six strata and sample districts as follows:

    i)     Severely Arid                 -        Isiolo
    ii)    Arid                          -        Narok
    iii)   Moderately Dry                –        Kilifi
    iv)    Low Income                    -        Kakamega
    v)     Medium Income                 -        Meru South
    vi)    High Income                   -        Uasin Gishu


2.2 Sample size and selection process

Health centres and dispensaries from sample districts included in the sample were
selected randomly, except for the severely arid and vast Isiolo district. For Isiolo district,
purposeful sampling was carried out, with help from the DMOH, to minimise travelling. A
total sample size of 60 facilities (health centres and dispensaries) was selected as shown
in Table 2.1. The facilities were distributed across the six districts in direct proportion to
the total number of such facilities in each district.

Furthermore, since public health centres constitute about 25% of public rural health
facilities in the country, the ratio of health centre to dispensaries adhered to the same
ratio. As a result, a total of 15 health centres and 45 dispensaries were included in the
sample.
                 Table 2.1: Number of Facilities Selected by Stratum and Sample District

Stratum             Severely    Arid         Moderately      Low      Medium        High
                      Arid                      Dry        Income     Income      Income
Sample District      Isiolo    Narok           Kilifi     Kakamega     Meru        Uasin    Total
                                                                       South       Gishu
Health Centres         1          2              2              4        2           4       15

Dispensaries           5          6              9              8         6         11       45
Total                  6          8             11              12        8         15       60
Mission/FBO          1 disp     1 disp         1 disp       1 disp     1 disp      1 disp   6disp
facilities                                                   2 hc                   1 hc    3 hc


To facilitate comparison with the mission health sector, a few public health centres (3)
and dispensaries (6) already sampled were replaced randomly with comparable
mission/faith based facilities. The mission/faith based facilities were purposefully selected
                                               Page 25 of 120
to ensure that facilities selected were sponsored and operated by different groups.
Details of the facilities selected are given in the Annex 7.


2.3 Data Collection Coverage

2.3.1 Data Collection at Facility Levels

Data collection at facility level was conducted primarily using a Facility Questionnaire.
Data was collected at facility level through a combination of interviews with facility staff,
reference to facility records including summarised forms and registers. In addition, data
was obtained through interviewing staff at district level (DMOH Office and District
Treasury) particularly in relation to resource inflows. Comparisons were also made
between data obtained at the two levels to check for validity of data.

2.3.2 Patient Exit and Community Survey Respondents

A patient exit survey was conducted for each of the facilities sampled, to capture data on
socio-economic characteristics, patients’ perceptions with respect to availability and
quality of health care, ability and willingness to pay health care fees among other issues.
Four patients (or their guardians in the case of under 5 children) were targeted in each
facility. The selection was conducted purposefully to ensure a good mix of characteristics
(sex, age, type of service).

A community survey component targeting community members (focussing on various
groups of respondents – administrators, teachers, women leaders, ordinary members of
the community etc.) in the immediate vicinity of each facility was conducted. A total of four
respondents from different backgrounds (women leaders, administrative officials etc)
were selected. The aim was to capture informed opinion of community members on the
operations and quality of services of the relevant facility and views on financing of health
services.

2.3.2 Cost and Facility Based Data

Apart from the exit and community survey, a lot of other data was gathered both at facility
level and district level on service provision and utilisation, resource flows and utilisation
among other issues using a variety of instruments.

2.3.3 Time Frame

Data collection was conducted in two phases, the first phase was carried out between the
last week of January and 1st week of March 2005, and the second phase was carried ou
in September 2005. Data collected on service provision and utilisation and resource flow
and use mainly focused on the calendar year 2004 and the 1 st six months of 2005. In
assessing the impact of the change in cost sharing policy comparison was made between
the situation between January to June 2004 and the period July to June 20058.




                                       Page 26 of 120
2.4 Data Analysis

The quantitative data collected was analysed using both SPSS for Windows and Excel.


2.5 Problems Encountered

The main problem encountered was access to summarised data at the facility level. In
some facilities data on services, cost-sharing and resources use was very poorly kept. To
address this problem, most of the data had to be extracted from various registers at
facility level. Comparisons were also made between summarised data available at the
District Medical Officer of Health Office and that extracted from various registers. In some
cases, the two sets of data sent to the district level did not match.

In addition, data on expenditure from the Government Recurrent Budget was not kept at
the District Treasuries in a manner that facilitates analysis on a facility by facility basis.
Neither did the facility management team have access to this information on expenditure
under that budget.




                                       Page 27 of 120
3. HEALTH FINANCING SITUATION IN KENYA


3.1 Role of Dispensaries and Health Centres

Public Health Centres and Dispensaries in Kenya form the lower rung of the hierarchy of
public health facilities. They are the most widespread and accessible of all public facilities.
They are so structured to maximise on access to primary level services and further
ensure strong linkages between facility based health services and those offered at
community level including outreach and public health services. There are a total of 440
public health centres and 1,536 public dispensaries. These public dispensaries and health
centres are further complemented by mission and private clinics/health centres.

The services expected of these facilities are basic but diverse ranging from basic
treatment of common diseases, to maternal and child health services, to early and simple
diagnostic services. At this level the full spectrum of primary health care services are
expected, involving prevention of disease, promotion of health, early diagnosis and basic
treatment of common illnesses (Table 3.1). Detailed facility norms and standards are at
annex 1


             Table 3.1: Minimum Services Expected of Health Centres and Dispensaries

                   Dispensary                                    Health Centre
    Early clinical diagnosis and treatment of       Early laboratory and Clinical diagnosis
     common diseases. The top most                    and treatment of common diseases. The
     common       diseases    being    Malaria,       top most common diseases being
     Pneumonia, Upper Respiratory Track               Malaria, Pneumonia, Upper Respiratory
     Infections, Intestinal Worms, Skins              Track Infections, Intestinal Worms, Skins
     Diseases, Injuries and STIs.                     Diseases, Injuries and STIs.
    Reproductive Health Services including          Reproductive Health Services including
     Antenatal and Family Planning Services           Antenatal, Maternity, Family Planning
    Child     Health    Services     including       Services and Prevention of Mother to
     Immunisation and child welfare clinics           Child Transmission (PMTCT) of HIV.
                                                     Child    Health      Services    including
                                                      Immunisation and child welfare clinics
                                                     Voluntary Counselling and Testing (VCT)
                                                      for HIV




Early intervention is expected to address health conditions and diseases before they get
complicated and more difficult to handle. The main difference between health centres and
dispensaries is that the former will handle laboratory tests and maternity cases.
Complicated cases of illnesses are expected to be referred to sub-district and district level
hospitals. In general, the following services will typically be offered at dispensary and
health centre level:

It is important to note that primary level facilities also provide a vital avenue for
coordination of all stakeholders at community level, including health care providers and
community members, with a view to harnessing community participation in all health
matters.


                                             Page 28 of 120
3.2 An Overview of the Financing of Health Centres and Dispensaries

A detailed overview of the health-financing situation in Kenya is presented in annex 2. In
summary, a combination of factors - declining overall levels of spending on health over
recent decades, combined with an allocation of resources which favours secondary and
tertiary care and the failure to ensure resources trickle down to peripheral levels - have
forced Government to adopt cost sharing as a means of providing financial support,
especially for non salary items, to health centres and dispensaries.

The 2001/2 National Health Accounts give a good overview of how health centres and
dispensaries, as a whole, are financed. Chart 3.1 shows that spending in the Government
sector is over 8 times that in the private sector. Within the public sector out of pocket
expenditures – which will include cost sharing expenditures amongst others – contributes
almost as much as Government funding. Although reporting is incomplete (72% in
2001/2) extrapolation of MOH figures suggests than user fee revenue in health centres for
2001/2 was around some K Shs 105m. Overall data on dispensaries is not available.
However, the findings of this study suggest revenues from dispensaries are broadly
comparable with those in health centres and it seems unlikely, therefore, that reported
user fee revenues account for more than 10-15% of total out of pocket expenditure in
health centres and dispensaries. As such a key initial finding is that official user fees only
form a relatively small share of the total costs of accessing Government health centres
and dispensaries. Thus, action on official fees alone is unlikely to address the major
financial constraints in accessing health services in health centres and
dispensaries.

                                                                                Chart 3.1

                                    Financing of Government and Private (Profit and Non Profit)
                                                 Health Centres and Dispensaries
                                                                 Source National Health Accounts 2001/2

                                          5,000                                                                      Private Firms and Companies

                                          4,500                                                                      Non Private Institutions

                                          4,000                                                                      Household Out of Pocket
                                                                                                                     Parastatals
                                          3,500
                                                                                                                     Local Authorities
      K Shs million




                                          3,000
                                                                                                                     MoH
                                          2,500
                                          2,000
                                          1,500
                                          1,000
                                            500
                                             -                                                   Private and Non Profit Health Centres and
                                                    Government Health Centres and Dispensaries
                                                                                                               Dispensaries
                      Private Firms and Companies                       0                                           1
                      Non Private Institutions                         212                                          3
                      Household Out of Pocket                         1,896                                        541
                      Parastatals                                      292
                      Local Authorities                                298
                      MoH                                             2,045




3.3 Key Characteristics of Financing Arrangements in Peripheral Facilities

The key characteristics of financing arrangements can be summarised as follows:



                                                                            Page 29 of 120
   A shifting of the financial burden from MOH to the facility level. The emergence
    of cost sharing and community funds as an important source of funds particularly at
    health and dispensary level emanates largely from the scarcity of operating resources.
    Although the health sector has benefited from waiver of the public staff employment
    freeze for some technical cadres such as nurses and clinical officers, other staff
    shortages have resulted in cost sharing funds being used to employ laboratory
    technicians, cleaners and watchmen at the local level. This goes against the original
    intentions of the programme which was meant to supplement rather than replace
    public O&M resources.

   Inflexible funding arrangements Another factor that affects the availability of
    operating resources at health centre and dispensaries is the mode of allocating
    resources to that level. In general, recurrent and development resources flow to that
    level only in kind, in the form of drug kits, loose drugs, vaccines etc. This makes
    operations at that level very difficult where resource needs are not fully met. Flexibility
    in reallocating resources from areas of surplus (e.g. over supply of certain drugs) to
    areas of deficit (e.g. lack of non-pharmaceuticals) in such a system is impossible and
    hence lead to wastage of some items and shortages of others. This is particularly so
    where the facilities are not involved in the planning as is the case with most of the
    supply sub-systems.

   Problems in budget execution. Facilities are also meant to be supported under
    Budget Head 335 of the MOH Recurrent Budget. However, this same head also
    finances operations of DHMTs and the DHMBs, which tend to receive priority. The
    study found that there is no systematic way in which health centres and dispensaries
    benefit from funds under Head 335 for their day-to-day operations. In some cases,
    that budget tends to be utilised entirely in servicing the operations of the DHMT. In
    most cases the in-charges are unaware of the existence of the budget and at the
    district level some staff claimed they were not aware that these funds are for use at
    lower level facilities. However, even if vote 335 were released in full, the impact on
    overall resource availability at the facility level would be relatively minor (chart 3.2).
    The average allocation per facility ranges from around K Shs 29,000 per annum in
    Uasin Gishu to around 89,000 K Shs in Kakamega. Such allocations are minor in
    relation to cost sharing revenue in Kilfi and Meru South (where cost-sharing revenue is
    high) and Uasin Gishu (where the allocation through Head 335 is low). In Narok,
    Kakamega and Isiolo, on the other hand, the allocation amount for 50% or more of
    cost sharing revenue.




                                        Page 30 of 120
                                                  Chart 3.2


                         Average Revenue Allocation per facility from Cost Sharing
                                             and Vote 335
               1,200,000

                                                                            Cost Sharing Receipts
               1,000,000
                                                                            Vote 335


                800,000
     m K Shs




                600,000



                400,000



                200,000



                     -
                              Isiolo   Kakamega       Kilifi   Meru South   Narok      Uasin Gishu


   This has led to a situation where cost sharing and community funds are the most
   important source of operating resources at this lower level. They are used in
   addressing shortfalls in critical resources such as important drugs, non-
   pharmaceuticals, and manpower for cleaning and security services. Any policy that
   reduces these funds has to simultaneously address these operational issues if
   services are to be offered as expected.

3.4 International Experience with User Fees

International experience suggests that the case for reducing or removing official user fees
for primary health services is strong. They raise little money and are generally a very
inequitable, as well as inefficient, means of funding health care. Fees are often
associated with reduced utilisation of services especially by the poor and vulnerable
(resulting in greater reliance on often inappropriate forms of self-treatment), a failure to
complete treatment (resulting in problems of drug resistance) and delays in seeking
treatment (resulting in worse health outcomes). These negative effects can be mitigated,
to some extent, if funds are retained and used locally and invested in ways that improve
the quality of services. In theory, waivers and exemptions can protect the poor. In
practice, they are rarely effective and the fact that facilities are rarely compensated for the
lost revenue associated with such exclusions means there is little incentive for them to
grant waivers and exemptions. At the same, it has to be recognised that action on user
fees may do little to improve access as they rarely present the most important financial
barrier. In practice, the costs of purchasing drugs which are unavailable at the facility,
unofficial fees, bribes etc and the indirect costs of accessing health care e.g. transport far
outweigh the often relatively minor costs associated with user fees. User fee policies tend
to attract attention because they are amenable to immediate policy action whilst
addressing the other issues involves addressing some of the more fundamental
institutional and governance issues which prevent progress in the sector



                                             Page 31 of 120
The recent experience of Uganda (where fees were abolished at primary care facilities)
shows that with sufficient political commitment the elimination of fees can have a very
positive effect. In Uganda, the policy played a catalytic role as the high level political
pressure to make the policy work forced Government to confront other issues such as
financial management problems (paying staff on time, releasing budgets in a timely
fashion) and drug supply and procurement issues which have typically hindered progress.
In fact the drug supply to primary care facilities was increased by around 50% at the time
fees were abolished. Together, these strategies appear to have significantly improved
access for the poor.

A key lesson from Uganda is that removing fees needs taken forward in a planned
fashion and be accompanied by a range of actions including increased and well directed
funding (above and beyond the loss of fee revenue) if it is to lead to sustained
improvements in access for the poor. It would require additional funding to allow quality to
be maintained in the face of increased demand and, potentially, increased health worker
pay to improve productivity. It is also likely to require an effective communications
strategy to make the case to those likely to be affected by the changes. If Governments
reduce or abolish fees and do absolutely nothing else (and do not undertake
complementary reforms) it is highly unlikely to lead to sustained improvements in the long
term. Experiences in Zimbabwe and South Africa suggest it could even make things
worse.

3.5 Recent National Trends in Cost Sharing Programme

Over the years the cost sharing programme in Kenya has contributed to the improvement
of health services and raised considerable amount of revenue. Total revenue collection is
estimated at about Kenya Shillings 1 billion in FY 2003/04 as indicated in table 3.2 below.

At the facility level user fees have been used to bridge the gaps in funding drugs and
operation costs. However, revenue collected still remains far below its potential mainly
because of the lack of proper accounting and recording systems at the facility levels. A
review of overall utilisation trends found that although there was a significant downturn in
the utilisation of provincial hospitals, the intended shift of patients to the lower government
health facilities did not occur to any significant degree.
      Table 3.2: Reported Cost Sharing Revenue Collection by Province and Year all Services

       Province            1996/97    1977/98    1998/99    1999/2000    2000/2001   2001/2002   2002/2003   2003/2004
       Central               44.01      48.31      88.78        119.83      155.81      178.79      217.16      238.27
       Coast                 23.05      35.77      61.41         85.46      129.14      140.12      162.91      128.42
       Eastern               36.83      48.62      62.73         88.41      116.61      141.55      201.37      212.12
       Nairobi                 8.99       8.99     11.53         23.96       25.07       24.85       35.06       28.88
       North
       Eastern                 2.98       3.03       2.37         5.33        6.92        5.43         7.2        8.62
       Nyanza                31.66      51.64      77.45         71.84       89.13       93.87      121.47       94.28

       Rift                    41.5     56.47      93.88        118.61      140.54      181.92      217.53      227.82
       Valley
       Western                 16.1     20.59      26.18         32.21       51.57       16.83       70.23       66.52
       Total                205.12     273.42     424.34        545.65      714.78      783.37    1,032.94    1,004.93
       Source: Ministry of Health Draft Public Expenditure Review 2005



                                                   Page 32 of 120
3.6 Trends in Cost Sharing Revenue in Health Centres

Most revenue is collected at hospital level. MOH collects data on cost sharing revenue at
health centres although not dispensaries. Reporting is incomplete – averaging between
65 and 75% over the last 5 years. Chart 3.3 shows how cost sharing revenues have risen
over the last 5 years1.
                                                                                Chart 3.3
                                          Reported Cost Sharing Revenues at Health Centres
                      160,000,000

                                                    Reported
                      140,000,000
                                                    Projected

                      120,000,000



                      100,000,000
              K Shs




                       80,000,000



                       60,000,000



                       40,000,000



                       20,000,000



                               0
                                          1999-00               2000-01            2001-02            2002-03            2003-04




                                                                                Chart 3.4
                                    Average Monthly Collection in Health Centres by Province
                      80,000                                                                                                       1999-00

                                                                                                                                   2000-01

                      70,000                                                                                                       2001-02

                                                                                                                                   2002-03
                      60,000
                                                                                                                                   2003-04


                      50,000
              K Shs




                      40,000



                      30,000



                      20,000



                      10,000



                          0
                                NAIROBI     CENTRAL     COAST         EASTERN     NORTH      NYANZA   RIFT VALLEY   WESTERN    TOTAL
                                                                                 EASTERN




There are clear differences in performance by province with Central, Coastal and Eastern
Provinces having far higher monthly collections than facilities elsewhere. Given other
financing constraints this has clear implications for the availability in resources and
suggests wide disparity in the availability of operational funds at the facility level. (Chart
3.4 above)

The study districts show a slightly different picture with Kilifi and Uasin Gishu – which
have far higher collections - experiencing significant reductions during 2003/4 (Chart 3.5).




1
    projection is based on extrapolation based on % of facilities reporting

                                                                          Page 33 of 120
                                                                                                                       Chart 3.5
                                                                             Average Monthly Collection per Health Centre by District
                                                                                                (reported data)                                                        1999-00
                                                            140,000
                                                                                                                                                                       2000-01

                                                                                                                                                                       2001-02
                                                            120,000
                                                                                                                                                                       2002-03

                                                            100,000
                                                                                                                                                                       2003-04



                                                             80,000
       KShs




                                                             60,000



                                                             40,000



                                                             20,000



                                                                  0
                                                                           KILIFI    USAIN GISHU             NAROK       MERU SOUTH     KAKAMEGA        ISIOLO       OVERALL




Although part of this can be explained by reporting shortcomings, in Kilifi it does appear
that actual collections have gone down. In Uasin Gishu the findings are skewed by the
performance of Huruma Health Centre; in Kilifi most facilities experienced a fall in user
fee collections well in advance of introduction of 10/20 (chart 3.6). These trends warrant
further investigation and mean caution needs to be applied in extrapolating any findings to
the national level
                                                                                                                       Chart 3.6
                                                                                     Cost Sharing Revenue in 2002/3 and 2003/4
                                                                                          Selected Facilities in Kilifi and Usain Gishu Districts
                                                            3,500,000
                                                                                                                                                                  2002/3
       KShs (adjusted for missing months where necessary)




                                                            3,000,000

                                                                                                                                                                  2003/4

                                                            2,500,000



                                                            2,000,000



                                                            1,500,000



                                                            1,000,000



                                                             500,000



                                                                      0
                                                                          Bamba HC   Mariakani HC           Rabai HC      Vipingo     Huruma HC      Soy HC      Turbo RHDC
                                                                                                   Kilifi                                          Usain Gishu




More detail on the cost sharing policy is at annex 3




                                                                                                                Page 34 of 120
          4. THE IMPACT EVALUATION OF 10/20 POLICY

          4.1 Approach

          This section presents the key findings from the study followed by analysis and discussion
          of their implications. The approach is structured as set out in table 4.1 below:

                               Table 4.1: Approach to Assessment of Impact

Type of Effect   Specific Impact          Indicators
Immediate        Changes in               Effect on Fee Levels for Selected Services
Impact           Implementation of Cost   Effects on Community Funds
                 Sharing Policy
                                          Broad Outputs
                                              total outpatient visits which gives an indication of the
                                                  overall workload by measuring the total number of
                                                  curative and preventive services provided at the facility
                                                  level
                                              new cases which gives an indication of the number of
                                                  curative interventions provided at the facility level
                 Changes                      new visits and re-attendances which gives an
                 in                               indication of the number of patients seeking curative
                 Utilisation                      care at the facility level
                                          Specific Outputs
                                              trends in number of deliveries
                                              trends in major causes of workload such as malaria
Broader                                           and respiratory diseases
Impact                                        trends in output of laboratory services
                                          Changes in Outputs not directly affected by 10/20 (Controls)
                                             o Outputs in mission facilities
                                             o Outputs of preventive services in Government facilities

                                          Data were analysed on a month by month basis, pre and post
                                          10/20 and on a district wise basis.

                 Changes in cost          Aggregate revenue collections and expenditures
                 sharing revenue and      Pattern of expenditures
                 expenditure:             Data were analysed on a month by month basis, pre and post
                                          10/20 and on a district wise basis.
                 Changes in Staffing      Changes in staffing levels or range of serviced delivered
                 Levels and Range of      associated with 10/20 policy
                 Services Delivered       Views on likely future trends
                 Stakeholder              Views of health workers exit patients and community focus
                 perceptions              groups on access barriers, possible approaches to improving
                                          health services and financing arrangements, impact of 10/20
                                          and degree of community participation




                                                Page 35 of 120
4.2 Analysis and Discussion


4.2.1 Immediate Impact

Overall, fee levels have declined and the fee structure has been simplified

           Fees have declined significantly The immediate impact of the policy was a major
            reduction in the official user fee for services at health centres and dispensaries. Pre
            10/20 the cost of a normal delivery in the health centres studies averaged just over
            KShs 300 in health centres (and slightly more in the small number of dispensaries
            which reported deliveries). Such fees were around a third, on average, of fees
            charged in mission facilities. The 10/20 policy reduced these fees by over 90%. By
            and large the official rates appear to have been adhered to with over 90% of patients
            in health centre reporting paying K Shs 20; in dispensaries only around 2/3 of patients
            who paid actually reported paying K Shs 10.
                                                                          Chart 4.0

                                      Comparisons of Charges for Normal Deliveries
                                                       (for faciltiies whcih reported charging)


            1,200


            1,000


             800
    K Shs




             600


             400


             200


               0
                       Mission           Mission        MoH Health Centre MoH Dispensaries MoH Dispensaries MoH Health Centre
                    Facilties(Disp)    Facilties(HC)

                                                                           Pre 10/20                   Post 10/20




           Multiple payments have been replaced by a single fee: Official fees for individual
            services such as consultations, drugs and laboratory services have been dropped and
            replaced by a single one off registration fee. Charts 4.1 and 4.2 indicate that fees in
            Government facilities did not differ too much from those in mission facilities – indeed
            the fees charges in dispensaries generally exceed those in health centres and often
            exceeded those in mission facilities.




                                                                   Page 36 of 120
                                                                              Chart 4.1

                                Previous User Charges for Different Services by Type of Facility
                                                                   (for those which reported charging)

                     90              MoH Health Centre
                                     MoH Dispensaries
                     80              Mission Faciltiies


                     70

                     60

                     50
             K Shs




                     40

                     30

                     20

                     10

                     0
                                 Consultation               General Drugs             Stool Test         Blood Test




                                                                            Chart 4.2 (a)


                               Comparison in Previous User Charges for Different Services in Dispensaries

        90
                 MoH Dispensaries
                 Mission Dispensary
        80



        70



        60



        50
K Shs




        40



        30



        20



        10



         0
                          Consultation                    General Drugs                 Stool Test            Blood Test




                                                                          Page 37 of 120
                                                                   Chart 4.2 (b)


                           Comparison of Previous User Charges for Different Services in Health Centres

             140
                          MoH Health Centre
                          Mission Health Centre
             120



             100



              80
     K Shs




              60



              40



              20



                 0
                        Consultation              General Drugs               Stool Test                  Blood Test




4.2.2 Impact on Total Out Patient Attendances (Overall Workload of the
Facility)

Charts 4.3 and 4.4 show trends in overall outpatients’ services on a quarterly basis 2. This
gives an idea of how the overall workload of the facility has changed and needs to be
looked at in the light of health workers comments about the heavier workload associated
with the 10/20 policy. This measure is perhaps not as sensitive as those covered below
as it includes preventive services which should have been largely unaffected by the
change in policy

Key findings included:

                    a large initial increase in the utilisation of outpatient services post July but a
                     general reduction in the last quarter of 2004
                    a continued decline trend in Health Centres in the first quarter of 2005 then an
                     increase in the 2nd quarter of 2005
                    utilisation generally remaining above that of the first half of 2004
                    wide variation between districts with large increases in Kilifi and Meru South.
                    In Isiolo, the low figures recorded on utilisation are attributable to drought and the
                     nomadic lifestyles of the population.




2
    note – not all districts presented such aggregate data

                                                                         Page 38 of 120
                                                                                             Chart 4.3

                                                                  Total Out Patient Services in Health Centres
                                                                            by District Jan04-Jun05
                                         4000
                                                                                                                                        Jan-March
                                                                                                                                        Apr-June
                                         3500                                                                                           July-Sept
                                                                                                                                        Oct-Dec
                                         3000                                                                                           Jan-Mar
  monthly average per facility




                                                                                                                                        Apr-Jun

                                         2500


                                         2000


                                         1500


                                         1000


                                         500


                                           0
                                                    ISIOLO       KAKAMEGA        KILIFI          MERU SOUTH      NAROK        UASIN GISHU


                                                                                             Chart 4.4

                                                         Total Out Patients Service Provided in Dispensaries by District
                                                                                  Jan04-Jun05
                                          3,000
                                                                                                                             Jan-March
                                                                                                                             Apr-June
                                                                                                                             July-Sept
                                          2,500
                                                                                                                             Oct-Dec
      average monthly number of visits




                                                                                                                             Jan-Mar
                                                                                                                             Apr-Jun
                                          2,000



                                          1,500



                                          1,000



                                           500



                                            -
                                                      ISIOLO      KAKAMEGA       KILIFI        MERU SOUTH     NAROK      UASIN GISHU




4.2.3 Impact on the Number of Patients Attending (New Visits and Re-
attendance’s)

New visits and re-attendances are probably a better indicator of impact as this measure
reflects the number of patients visiting the facility for curative care. Charts 4.5 to 4.7 show
aggregate monthly trends in visits and re-attendances and a quarterly district-wise
breakdown

Key findings:

                                               utilisation increased rapidly in both health centres and dispensaries. The upward
                                                trend continued.

                                                                                          Page 39 of 120
                                      significant variation at district level with large initial increases utilisation in health
                                       centres in Kilifi and Uasin Gishu – where attendances more than doubled - and in
                                       dispensaries in Uasin Gishu where attendances more than tripled. This was
                                       followed by significant declines in the fourth quarter in Uasin Gishu but not Kilifi.
                                      Marked increase in Health Centres as compared to a decline in Dispensaries in the
                                       first two quarters of 2005.
                                      Dispensaries are characterised by a sharp increase in the 3 rd quarter of 2004 then
                                       a downward trend in the subsequent quarters.
                                                                                                     Chart 4.5


                                                                     Total Number of New Visits and
                                                             Re-Attendances in Study Facilities Jan04 - Jun05

                              35000
                                                   Dispensaries

                              30000                Health Centres


                              25000


                              20000
  number




                              15000


                              10000


                                  5000


                                       0
                                           Jan   Feb   Mar   Apr    May   Jun   Jul      Aug   Sep   Oct   Nov    Dec   Jan   Feb   Mar   Apr   May     Jun




                                                                                                     Chart 4.6

                                                             New Visits and Reattendance in Health Centres.
                                           Jan-March                         Jan 04- Jun 05
                                           Apr-June
                              300          July-Sept
                                           Oct-Dec
                                           Jan-Mar
                                           Apr-Jun
                              250
index first half 2004 = 100




                              200



                              150



                              100



                                  50



                                  0
                                             ISIOLO          KAKAMEGA                 KILIFI         MERU SOUTH          NAROK            UASIN GISHU




                                                                                               Page 40 of 120
                                                                                                 Chart 4.7

                                                                    New Visits and Reattendances in Dispensaries
                                                                                    Jan04-Jun05
                                  400
                                                 Jan-March
                                                 Apr-June
                                  350            July-Sept
                                                 Oct-Dec
                                  300            Jan-Mar
                                                 Apr-Jun
      index first half 2004=100




                                  250


                                  200


                                  150


                                  100


                                  50


                                   0
                                                 ISIOLO            KAKAMEGA             KILIFI          MERU SOUTH               NAROK             UASIN GISHU




4.2.4 Impact on the Number of Curative Interventions Provided (New Cases)

The number of new cases reflects the volume of services being provided by the facilities
(as one attendance can involve more than one case). Charts 4.8 to 4.10 show aggregate
figures for new cases and quarterly district wise breakdowns. As above a key finding was
a large increase at health centre level and an initial modest increase at dispensary level
with a large increase case at Kilifi and Meru South. At the dispensary level, we see a
strong showing in Narok and Uasin Gishu for the 1st and 2nd quarters of 2005

It is also apparent that the number of cases per patient has increased during 2004, and
even more during 2005, suggesting that each patient may actually be receiving more
services. This would be consistent with the introduction of a one off fee as there should
be no extra fees associated with using additional services. This would be a welcome
development if it means people are accessing more essential services.
                                                                                                 Chart 4.8
                                                                                            Effects on Utilisation
                                                                         Summary of Total Number of New Cases Reported during 2004


                                        120000




                                        100000




                                        80000




                                        60000




                                        40000




                                        20000




                                            0
                                                             Pre 10/20                  Post 10/20                   Pre 10/20                      Post 10/20
                                                                           Dispensary                                             Health Centres




                                                                                          Page 41 of 120
                                                                                              Chart 4.9

                                                   Trends in New Cases in Health Centres by District Jan04-Jun05
                                                                                    (no data for Isiolo)

                                300
                                           Jan-March
                                           Apr-June
                                           July-Sept
                                250        Oct-Dec
                                           Jan-Mar
                                           Apr-Jun
  index first half 2004 = 100




                                200



                                150



                                100



                                    50



                                     0
                                              ISIOLO          KAKAMEGA        KILIFI                 MERU SOUTH      NAROK       UASIN GISHU




                                                                                             Chart 4.10


                                                       Trends in New Cases in Dispensaries by District Jan04-Jun05

                                400
                                           Jan-March
                                           Apr-June
                                350        July-Sept
                                           Oct-Dec
                                300        Jan-Mar
  index first half 2004 = 100




                                           Apr-Jun

                                250


                                200


                                150


                                100


                                    50


                                    0
                                             ISIOLO          KAKAMEGA      KILIFI               MERU SOUTH        NAROK      UASIN GISHU




4.2.5 Impact on Utilisation of Specific Interventions

Trends in a number of specific interventions were also assessed. Deliveries were
considered because they form an important part of the workload at health centres and
saw a large reduction in fees as a result of 10/20

Key findings included:

                                        little trend in terms of deliveries. Facilities in some districts – notably Kilifi and Meru
                                         South have a far higher workload than those in other districts

                                                                                       Page 42 of 120
                         at health centre level there was a large increase in the number of cases of
                          respiratory diseases treated.
                         a clear reduction in the number of laboratory tests between September and
                          November, a slight increase in December then again a clear reduction between
                          January 05 to Jun 05
                         a clear rise in the number of Common Drugs, Injections and Antibiotics provided
                          from November 04 to Jun 05

               It is not clear how significant these finding are. There was no detectable effect of the new
               policy on deliveries although sample size was small. The wide differences in workload
               between facilities suggest that local factors may be important. Whilst there were often
               large changes in the workload pattern again it is more likely that the local disease profile
               rather than changes in health seeking behaviour were responsible

               To improve the quality of services in these lower level facilities the general
               recommendation is for the Ministry to recruit and post more nurses who can even run
               more specialised services such as maternity and pharmacy to these facilities. Where
               members of the communities recruited support staff for security and cleanliness, the
               Government is called upon to take up their recruitment.
                                                                   Chart 4.11



                                                Average Number of Monthly Deliveries
                                                         per Health Centre

          25                                                                                     Jan-March
                                                                                                 Apr-June
          20
                                                                                                 July-Sept
                                                                                                 Oct-Dec
                                                                                                 Jan-Mar
          15                                                                                     Apr-Jun
num ber




          10




          5




          0
                      ISIOLO         KAKAMEGA           KILIFI             MERU SOUTH   NAROK   UASIN GISHU




                                                                 Page 43 of 120
                                                                                                                                                              Chart 4.12



                                                                                                                               Trends in Provision of Curative Care: Health Centres

                                           250
                                                                                                      Malaria

                                                                                                      Respiratory Diseases
                                           200
new cases: i ndex Jan-June average = 100




                                                                                                      Intestinal Worms

                                                                                                      Pneumonia
                                           150



                                           100



                                            50



                                             0
                                                                                                           Jan-March           Apr-June         July-Sept            Oct-Dec     Jan-Mar   Apr-Jun



                                                                                                                                                              Chart 4.13


                                                                                                                               Trends in Provision of Curative Care: Dispensaries
                                                                                                     250
                                                                                                                  Diseases of the skin
                                                 new cases: index - average Jan to June 2004 = 100




                                                                                                                  Dental Disorders
                                                                                                     200          Malaria
                                                                                                                  Intestinal Worms

                                                                                                     150



                                                                                                     100



                                                                                                     50



                                                                                                      0
                                                                                                                Jan-March            Apr-June      July-Sept           Oct-Dec   Jan-Mar   Apr-Jun




                                                                                                                                                            Page 44 of 120
                                                                                      Chart 4.14

                                     Average Number of Laboratory Tests for Health Centres
                                                  by District Jan04-Jun05
            3,000
                                                                                                                                UASIN GISHU
                                                                                                                                NAROK
            2,500                                                                                                               MERU SOUTH
                                                                                                                                KILIFI
                                                                                                                                KAKAMEGA
            2,000
                                                                                                                                ISIOLO
  number




            1,500


            1,000


              500


               -
                          Jan     Feb Mar       Apr May Jun         Jul     Aug Sep       Oct    Nov Dec Jan       Feb Mar    Apr May Jun


                                                                                      Chart 4.15

                          Number of Common Drugs and Injections Provided in Health Centres
                                                 Jan04-Jun05

           25000
                      Injections
                      Pharmacy : Common Drugs
                      Pharmacy : Antibiotics
           20000




           15000
  number




           10000




           5000




               0
                    Jan     Feb     Mar   Apr     May   Jun   Jul         Aug   Sep     Oct     Nov   Dec   Jan   Feb   Mar   Apr   May   Jun



4.2.6 Utilisation Trends for Preventive Care and In Mission Facilities

Charts 4.16 to 4.18 show trends in preventive care and services at mission facilities. As
these programmes were not directly affected by the 10/20 policy utilisation trends they act
as a control group and were assessed to try and identify whether any other underlying
factors might be affecting utilisation patterns.




                                                                                Page 45 of 120
Key findings included:

    no clear trend in the amount of preventive care provided by health centres and
     dispensaries over the period. This would suggest that the 10/20 policy has played a
     key role in influencing utilisation patterns for curative services 3.
    In terms of the mission facilities there is again, no clear trend in utilisation patterns
     although utilisation was slightly reduced for many services in the second half of 2004.
     During pilot visits mission facilities expressed concerns that cheaper public services –
     especially for deliveries would result in a loss of patients and potentially cause them
     financial problems. There is no evidence of this problem the sample reviewed – in fact
     deliveries actually increased

These results would tend to support the view that many of the aggregate changes
identified were at least in part due to the 10/20 policy


                                                            Chart 4.16




3
  In Uganda abolition of user fees has been associated with a large increase in curative services but has also resulted in greater
demand for preventive care – presumably on the basis that patients may, for example, take advantage of a curative visit to immunise
their child. There is little evidence of this here

                                                        Page 46 of 120
                                                                                                                                 Chart 4.17


                                                                                     Trends in Provision of Preventive Care in Health Centres

                                                                          140         Child Welfare Attendances

                                                                                      ANC Visits

                                                                          120         Family Planning Attendances
                                      index Jan-JUne 2004 average = 100




                                                                          100


                                                                           80


                                                                           60


                                                                           40


                                                                           20


                                                                            0
                                                                                  Jan-March            Apr-June            July-Sept      Oct-Dec       Jan-Mar          Apr-Jun




                                                                                                                                 Chart 4.18


                                                                                                         Trends in Selected Output Indicators
                                                                                                           in Mission Facilities Jan04-Jun05
                                                                                                                                                                                Jan-Mar
                                300
                                                                                                                                                                                Apr-June
                                                                                                                                                                                July-Sept
                                250                                                                                                                                             Oct-Dec
                                                                                                                                                                                Jan-Mar
                                                                                                                                                                                Apr-Jun
  index first half 2004 = 100




                                200



                                150



                                100



                                50



                                 0
                                                                          New Cases, New      Total Outpatient      Normal Deliveries    Malaria     Diseases of the     Laboratory Tests
                                                                             Visits and          Services                                           Respiratory System
                                                                           Reattendances




4.2.7 Impact on Revenue Collection

Charts 4.19 to 4.22 show trends in total revenue collections at health centres and
dispensaries and district wise breakdowns.


                                                                                                                            Page 47 of 120
It was found that revenues have roughly halved in both dispensaries and health centres
as a whole. Revenues fell in all districts and in all types of facilities. There are significant
differences in the revenues raised by different facilities. Dispensaries in Kilifi and Meru
South and health centres in Kilifi and Uasin Gishu raised significantly more revenue than
those in other districts. Consequently, they faced the biggest reductions in revenue
following 10/20. It is of interest to note that in the first half of 2005, Health Centres
revenues remained depressed, whilst in the same period, revenues at Dispensaries rose
up significantly to almost the previous levels. This was due to the fact that the
committees decided to increase the amounts for services and ignore the 10/20 policy as
they contend that the Health System at this level would have collapsed since there was
no corresponding government intervention to bridge the gap. This view was held across
the board.

This had knock-on effects in terms of reduced expenditure as well as a reduction of staff
hired (or staff laid off) under cost sharing (watchmen, cleaners, laboratory staff, etc),
inadequate supply of drugs and in some cases lack of funds affected transport required
for collecting drugs at the district health facilities. These knock-on effects are dealt with in
later sections.

                                                                   Chart 4.19

                              Revenues from Cost Sharing and Community Financing in Health
                                                        Centres
              350,000
                                                                                                                     UASIN GISHU
                                                                                                                     NAROK
              300,000
                                                                                                                     MERU SOUTH
                                                                                                                     KILIFI
              250,000
                                                                                                                     KAKAMEGA
                                                                                                                     ISIOLO
              200,000
      K Shs




              150,000



              100,000



               50,000



                  -
                        Jan    Feb   Mar   Apr   May   Jun   Jul    Aug   Sep   Oct   Nov   Dec   Jan   Feb   Mar   Apr   May   Jun




                                                             Page 48 of 120
                                                                                Chart 4.20

                         Trends in Revenue from Cost Sharing and Community Funds in Health Centres

        120,000
                          Jan-March
                          Apr-June
        100,000           July-Sept
                          Oct-Dec
         80,000           Jan-Mar
                          Apr-Jun
K Shs




         60,000




         40,000




         20,000




               -
                         ISIOLO           KAKAMEGA               KILIFI                MERU SOUTH           NAROK          UASIN GISHU




                                                                                Chart 4.21




                                  Revenues from Cost Sharing and Community Funding in Dispensaries
                                                                                                                                   UASIN GISHU
        80,000
                                                                                                                                   NAROK
        70,000                                                                                                                     MERU SOUTH
                                                                                                                                   KILIFI
        60,000                                                                                                                     KAKAMEGA
                                                                                                                                   ISIOLO
        50,000
KShs




        40,000


        30,000



        20,000


        10,000


           -
                   Jan    Feb     Mar   Apr   May    Jun   Jul            Aug    Sep     Oct    Nov   Dec    Jan    Feb   Mar    Apr     May   Jun




                                                                          Page 49 of 120
                                                                Chart 4.22

                     Revenue Collections from Cost Sharing and Community Funds in Dispensaries by
                                                        District

            30,000                                                                                     Jan-March
                                                                                                       Apr-June
            25,000                                                                                     July-Sept
                                                                                                       Oct-Dec
            20,000                                                                                     Jan-Mar
                                                                                                       Apr-Jun
    K Shs




            15,000


            10,000


             5,000


               -
                         ISIOLO      KAKAMEGA          KILIFI          MERU SOUTH      NAROK         UASIN GISHU




4.2.8 Trends in Reported Expenditure of Cost Sharing Funds

Charts 4.23 to 4.29 show trends in expenditure over time, by facility and also compare
actual to potential revenue as estimated according to a number of assumptions

It was found that

             reported expenditures have declined at both dispensary and health centre levels.
              For health centres the picture is skewed by large expenditures in Uasin Gishu in
              April and November. This is due to poor discipline in filing and submitting of AIE’s
              including reporting of funds generated and banked by the respective facilities.
              Strengthening of procedures and ensuring that they are adhered to was weak
             a reasonable share of potential revenue is collected4 although there is some
              evidence that it might be declining. It is not clear whether this is genuine or
              whether it is because facilities are charging for services which should be free
             few exemptions are given – almost all Government facilities report exempting
              children but not for other reasons. Exemptions are extremely rare in mission
              facilities. Direct observation is the main approach to providing waivers in both
              Government and mission sector. Records on the value of exemptions and waivers
              are almost non-existent.




4
 the potential revenue is estimated as K Shs 20 per new case in health centres and K Shs 10 in dispensaries. A 30% allowance is
made for children who are supposed to be exempt

                                                       Page 50 of 120
                                                                                  Chart 4.23

                      Average Quarterly Expenditures from Cost Sharing and Community Funds
           160,000
                                                                                                                        Dispensaries
           140,000
                                                                                                                        Health Centres
           120,000

           100,000
K Shs




            80,000

            60,000

            40,000

            20,000

                  -
                                Jan-March          Apr-June          July-Sept          Oct-Dec            Jan-Mar            Apr-Jun




                                                                                  Chart 4.24

                                             Expenditure from Cost Sharing and Community Funds                                UASIN GISHU
                                                                                                                              NAROK
                                                           in Dispensaries by District                                        MERU SOUTH
           60,000
                                                                                                                              KILIFI
                                                                                                                              KAKAMEGA
           50,000                                                                                                             ISIOLO


           40,000
 K Shs




           30,000


           20,000


           10,000


              -
                          Jan    Feb   Mar   Apr   May   Jun   Jul    Aug   Sep   Oct    Nov   Dec   Jan    Feb   Mar   Apr    May   Jun


                                                                                  Chart 4.25

                           Expenditures of Cost Sharing and Community Funds by Health
                                                Centres by District
           300000
                                                                                                                         UASIN GISHU
                                                                                                                         NAROK
                                                                                                                         MERU SOUTH
           250000                                                                                                        KILIFI
                                                                                                                         KAKAMEGA
                                                                                                                         ISIOLO
           200000
  K Sh s




           150000


           100000


            50000


                      0
                           Jan Feb Mar Apr May Jun             Jul    Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun




                                                                            Page 51 of 120
                                                                                                                                                            Chart 4.26

                                          Comparison of Actual v Potential Revenues in Study Health
                                                         Centres and Dispensaries
                                                                                     assumes 30% exemptions for under 5 - all new visits, cases and rettendances charged
                                                                                                        at 10/20 rate - does not allow for waivers
          300,000
                                                Jul
                                                Aug
          250,000
                                                Sep
                                                Oct
          200,000                               Nov
                                                Dec
K Shs




          150,000



          100,000



           50,000



               -

                                                                 Actual                                                                  Potential                                                                                       Actual                                                    Potential
                                                                                              Dispensaries                                                                                                                                          Health Centres



                                                                                                                                                            Chart 4.27
                                                                               Actual Revenues as % of Potential Revenues
          80                                                                                                                                                                                                                                                                                                   Dispensaries


          70                                                                                                                                                                                                                                                                                                   Health Centres


          60


          50


          40
%




          30


          20


          10


           0
                                          Jul                                                          Aug                                           Sep                                                           Oct                                           Nov                                                            Dec




                                                                                                                                                            Chart 4.28

                                          Reported Cost Sharing Exemption Criteria Applied by Study
                                                                 Facilities

          45                                                                                                                                                                                                                                                                                                          No
                                                                                                                                                                                                                                                                                                                      Exemptions
          40
                                                                                                                                                                                                                                                                                                                      Exemption
          35                                                                                                                                                                                                                                                                                                          Allowed

          30
 number




          25

          20

          15

          10

          5

          0
                                                Civil Servants




                                                                                                                                                             Civil Servants




                                                                                                                                                                                                                                                                          Civil Servants
                   Children




                                                                                                                                     Children




                                                                                                                                                                                                                                                   Children
                                                                                                                             Other




                                                                                                                                                                                                                                           Other




                                                                                                                                                                                                                                                                                                                                                       Other
                              Prisoners




                                                                                                                                                Prisoners




                                                                                                                                                                                                                                                              Prisoners
                                                                                                        Condition Specific




                                                                                                                                                                                                                    Condition Specific




                                                                                                                                                                                                                                                                                                                                  Condition Specific
                                                                  Charitable Homes




                                                                                                                                                                              Charitable Homes




                                                                                                                                                                                                                                                                                           Charitable Homes
                                                                                     Recommendations




                                                                                                                                                                                                 Recommendations




                                                                                                                                                                                                                                                                                                              Recommendations
                                                                    Patients from




                                                                                                                                                                                Patients from




                                                                                                                                                                                                                                                                                             Patients from
                                                                                        Community




                                                                                                                                                                                                    Community




                                                                                                                                                                                                                                                                                                                 Community




                                                                 Mission                                                                                              Dispensaries                                                                                          Health Centres




                                                                                                                                                Page 52 of 120
                                                                                                     Chart 4.29
                                             Reported Waiver Criteria Applied by Study Facilities
               45

               40
                                                                                                                                                                      No Waivers

               35
                                                                                                                                                                      Waiver Allowed

               30

               25
      number




               20

               15

               10

               5

               0
                                                         Length of Stay




                                                                                                                    Length of Stay




                                                                                                                                                                             Length of Stay
                                     Observation




                                                                                                      Observation




                                                                                                                                                              Observation
                                                                          Other




                                                                                                                                     Other




                                                                                                                                                                                              Other
                    Recommendation




                                                                                  Recommendation




                                                                                                                                             Recommendation
                                       Direct




                                                                                                        Direct




                                                                                                                                                                Direct
                      Community




                                                                                    Community




                                                                                                                                               Community
                                               Mission                                                    Dispensaries                                          Health Centres




4.2.9 Trends in Use of Cost Sharing Funds
Charts 4.30 to 4.35 show the reported use of cost sharing funds in health centres and
dispensaries. It was found that:

   health centres and dispensaries use cost sharing funds in very different ways.
    Dispensaries spend around over three quarters of the funds on casual staff and their
    PAYE obligations. Health centres spent less on casuals – around 30% - and more on
    drugs (14%) and generally spend their funds on a wide range of items
   the patterns of spending have remained relatively unchanged since the
    introduction of 10/20 but it needs to be noted that there is a shift in the pattern of
    spending/use as a result of the decrease in revenue and/or priority. For example, in
    the Health Centres the amount spent on drugs was about 14% in 2004 but this went
    down to a negligible percentage as shown in chart no 4.35, further the amount spent
    on Laboratory Reagents grew from 2.5% to 15% in the same period.

The fact that facilities use resources in different ways suggests that facilities have
different priorities when it comes to the use of additional funds. Though, one could argue
that this might be a sign of inefficiency the judgement of the review team was that the
allocation of resources appeared, in most cases, to be appropriate. The box below
provide examples of effective uses of cost sharing revenues

                                                    Examples of Uses of Cost Sharing Funds

Matsangoni Dispensary, Kilifi District, provision of maternity services have been made
possible through community initiative, where installation of an electricity generator, wiring
of the facility and financing of associated running costs has been accomplished through
these resources. In the busy Rabai Health Centre in the same district, joint financing
arrangements have been entered into with neighbouring health institutions that have
ambulances with respect to fuel and maintenance. This has eased referral processes to
far away referral centres such as Coast Provincial General Hospital.

                                                                                                   Page 53 of 120
                                                              Chart 4.30


 Use of Cost Sharing                                                                            Dressings
                                                                                                  2.9%
and Community Funds                                                              Drugs
                                                                                 1.3%
     during 2004     Travel and Accomodation
                               7.9%
                                                                                                            Stationery
                                                                                                              0.1%
   in Dispensaries
                                                                                                                    Cleaning
                                                                                                                      0.2%


                                                                                                                         Misc. Operating expenses
                                                                                                                                  1.2%
                Others (pls specify) PAYE
                          33.1%
                                                                                                                  Maintenance of buildings
                                                                                                                           3.9%




                                   Water
                                   0.1%
                                                                                               Payment of Casuals
                                                                                                    49.2%




                                                              Chart 4.31

                                            Others: NSSF
                              Others:            2%          Transport
        Rent and Rates        Salaries                         6.9%                                             Use of Cost
             0.6%               5%                                        Travel and Accomodation               Sharing and
                                                                                    5.9%

                Water
                                                                                                                Community
                2.0%                                                                                             Funds in
                                                                                          Telephone
           Fuel/Gas                                                                         3.1%               Health Centres
             1.8%                                                                                                 in 2004
                                                                                                Drugs
                                                                                                13.9%



  Payment of Casuals
       29.5%
                                                                                                Laboratory Reagents
                                                                                                       2.5%



        Maintenance                                                                        Dressings
         of buildings                                                                        5.9%
             4%
                                                                                         Stationery
                  Medical Equipment                                                        6.4%
                        6.1%                                               Cleansing
                                               Misc. Operating expenses
                                                                             1.8%
                                                        2.3%




                                                           Page 54 of 120
                                                                                  Chart 4.32


                                  Use of Cost Sharing and Community Funds in Dispensaries                                          Others (pls specify) PAYE
                                                                                                                                   Others (pls specify) NSSF
           60,000
                                                                                                                                   Others (pls specify) Salaries
                                                                                                                                   Rent and Rates
                                                                                                                                   Water
           50,000
                                                                                                                                   Medical Records
                                                                                                                                   Food and Rations
                                                                                                                                   Oxygen
           40,000                                                                                                                  Electricity
                                                                                                                                   Fuel/Gas
                                                                                                                                   Payment of Casuals
    KShs




                                                                                                                                   Maintenance of buildings
           30,000
                                                                                                                                   Medical Equipment
                                                                                                                                   Misc. Operating expenses
                                                                                                                                   Cleansing
           20,000
                                                                                                                                   Stationery
                                                                                                                                   Linen
                                                                                                                                   Uniform
           10,000                                                                                                                  Dressings
                                                                                                                                   Laboratory Reagents
                                                                                                                                   Drugs

                -                                                                                                                  Telephone

                      Jan   Feb   Mar   Apr   May   Jun   Jul   Aug   Sep   Oct   Nov   Dec   Jan   Feb   Mar   Apr   May   Jun    Travel and Accomodation
                                                                                                                                   Transport




                                                                                  Chart 4.33

                                              Pattern of Use of Revenues in Dispensaries
                                                                                                                                  Others (pls specify) PAYE
100%                                                                                                                              Others (pls specify) NSSF
                                                                                                                                  Others (pls specify) Salaries
                                                                                                                                  Rent and Rates
                                                                                                                                  Water
      80%                                                                                                                         Medical Records
                                                                                                                                  Food and Rations
                                                                                                                                  Oxygen
                                                                                                                                  Electricity
      60%                                                                                                                         Fuel/Gas
                                                                                                                                  Payment of Casuals
%




                                                                                                                                  Maintenance of buildings
                                                                                                                                  Medical Equipment
      40%                                                                                                                         Misc. Operating expenses
                                                                                                                                  Cleansing
                                                                                                                                  Stationery
                                                                                                                                  Linen
      20%                                                                                                                         Uniform
                                                                                                                                  Dressings
                                                                                                                                  Laboratory Reagents
                                                                                                                                  Drugs
                                                                                                                                  Telephone
           0%
                                                                                                                                  Travel and Accomodation
                    Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
                                                                                                                                  Transport




                                                                            Page 55 of 120
                                                    Chart 4.34




                                                    Chart 4.35

                                Pattern of Use in Health Centres

       100%                                                                             Others (pls specify) PAYE
                                                                                        Others (pls specify) NSSF
       90%                                                                              Others (pls specify) Salaries
                                                                                        Rent and Rates

       80%                                                                              Water
                                                                                        Medical Records
                                                                                        Food and Rations
       70%
                                                                                        Oxygen
                                                                                        Electricity
       60%
                                                                                        Fuel/Gas
KShs




                                                                                        Payment of Casuals
       50%                                                                              Maintenance of buildings
                                                                                        Medical Equipment
       40%                                                                              Misc. Operating expenses
                                                                                        Cleansing

       30%                                                                              Stationery
                                                                                        Linen
                                                                                        Uniform
       20%
                                                                                        Dressings
                                                                                        Laboratory Reagents
       10%
                                                                                        Drugs
                                                                                        Telephone
        0%                                                                              Travel and Accomodation
              Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun   Transport




                                                Page 56 of 120
4.2.10 Impact on Range of Services Provided

Declining public services and privatisation: In the first six months of the introduction of
10/20 policy, Government health facilities had laid-off various categories of staff as a
result of reduction in revenue from user fees collection as shown in Table 4.2. Further it
was reported that 5 facilities – 3 in Uasin Gishu and one each in Kilifi and Isiolo had
discontinued laboratory services. It was also reported that many of the laboratory staff –
particularly in Uasin Gishu and Kakamega - had established private practice in the vicinity
of the facility. However, in 2005 no staff were laid off mainly because some facilities
disregarded the policy and were charging much higher.
           Table 4.2: Number of Facilities which had laid off staff by District and Cadre

         DISTRICT       CLEANER         WATCHMAN              LAB             OTHERS        TOTAL
                                                           TECHNICIAN
         Isiolo              -                 1               3                  1           5
         Narok               2                 -               -                  -           2
         Kilifi              2                 3               -                  6          11
         Kakamega            3                 3               -                  1           7
         Meru South          -                 1               -                  -           1
         Uasin Gishu         1                 2               -                  3           6
         TOTAL               8                10               3                 11          32



Overall, it would appear that the range of services being delivered is declining. This does
not necessarily mean that access to services has necessarily declined. However, rather
than patients getting free laboratory tests in the public sector under 10/20 instead of
paying for them as had been the case before – they are now increasingly having to
access such services through the private sector (and sometimes through the same
provider). The overall cost may not have gone up but the objectives of 10/20 will not have
been achieved.

The effects of the loss of other support staff are more difficult to quantify as their link to
services is less direct. One facility visited during the pilot suggested that the loss of their
watchman was not too serious as the facility was next to a police station. However, in a
dispensary with one nurse support personnel could potentially have a significant effect on
productivity.

Longer term impact: During the pilot some facilities expressed the view that the worse
was yet to come. This was based on the fact that they were still operating using cost
sharing funds raised prior to July 1st (as it takes a long time to get provincial approval to
use the funds). At the same time they were also running down their bank balances. Such
an approach was clearly (and quite rightly) felt to be unsustainable but the main point
here is that the financial crisis point had yet to be reached. Although facilities in the
sample were asked about bank balances the answers were incomplete and pretty
unreliable. However, the fact that many facilities thought they would have to continue
laying off staff would tend to support this hypothesis. It also reinforced the case for
following up progress since the end of the study period



                                         Page 57 of 120
4.2.11 Patient Perceptions on the Cost Sharing Policy

Focus group discussions were held with community groups surrounding sampled health
facilities. The key issues discussed as regards 10/20 policy sought their feelings, proposed
changes and impact of 10/20 policy.

                                         Table 4.3: Views of Exit Patients on Service Provided

                DISTRICT                            VERY                           SATISFIED                    UNSATISFIED                 TOTAL
                                                  SATISFIED
                Isiolo                                4%                                 83%                           13%                      24
                Narok                                67%                                 33%                             -                      33
                Kilifi                               28%                                 68%                            4%                      40
                Kakamega                             35%                                 59%                            6%                      37
                Meru South                           32%                                 58%                           10%                      31
                Uasin Gishu                          17%                                 78%                            5%                      59
                TOTAL                                 67                                 144                            22                     224
                                                     29.9                                64.3                           9.8


                                                                              Chart 4.36

                                 Recommended Ways of Improving Services by Unsatifeid
                                                     Patients

               18                                                                                                                       5th Reason
                                                                                                                                        4th Reason
               16                                                                                                                       3rd Reason
                                                                                                                                        2nd Reason
               14
                                                                                                                                        Main Reason

               12


               10
      number




               8


               6


               4


               2


               0
                    More Drugs    Better Staff   More Staff       More         Reduce         Improved     No Strong   Better Lab   Other
                                   Attitudes                  Qualified Staff Waiting Time   Supervision    Opinion     Services




Key findings:

   General satisfaction with services: Patients were reasonably satisfied with the
    services they were given. Whereas 29.9% of the respondents indicated that they
    were very satisfied, the majority 64.3% indicated that they were satisfied while 9.8%
    were unsatisfied. Kakamega District had the highest proportion of those who were not
    satisfied (32.4%) whereas in Narok all respondents were either satisfied or very
    satisfied. Key areas of continuing dissatisfaction included the lack of drugs and
    availability of staff and the need to reduce waiting times. Many also mentioned the
    availability of laboratory services though not always as their top priority


                                                                         Page 58 of 120
   Better access: On impact the respondents indicated that the 10/20 policy has
    enabled more members of the community to have access to healthcare. This is
    confirmed by the data given in Table 4.4 which show that 51.6 percent of the
    respondents felt that things were much better under 10/20. Those who think that
    things are worse constituted 31.1 percent, while those who felt that things are about
    the same were 15.2 percent.

                                                           10
                                    Table 4.4: Impact of        /20 policy

                                                   Frequency                    Percent
Things much better                                    126                        52.7
Things about the same                                  37                        15.5
Things worse                                           76                        31.8
TOTAL                                                 239                         100



                                                                 10
                                 Table 4.5 Feeling towards         /20 policy

                                                           Frequency              Percent
Strongly supportive                                            88                  36.2
Generally supportive                                           66                  27.2
Has not made any difference                                    14                   5.8
Has made things worse                                          38                  15.5
Should be totally abolished                                    14                   5.8
Should go back to old policy                                   23                   9.5
TOTAL                                                         243                   100




                                    Table 4.6: Proposed Changes

                                                       Frequency                 Percent
Go back to old policy                                      38                     16.2
Abolish user fee totally                                   47                     20.2
Increase user fee                                          37                     15.8
Autonomy in setting fee                                    46                     19.6
Other                                                      66                     28.2
TOTAL                                                     234                      100



                       Table 4.7: Distribution of Facilities by Changes Required

Proposals                                                         No. of Facilities which responded
                                                                Dispensaries           Health Centres
Increase fee                                                         14                       2
Charge some services                                                  4                       4
Revert to old policy                                                  8                       3
Charge separate fee                                                   1                       -
GOK should provide resources                                         15                       1
Abolish cost sharing                                                  2                       1
All should pay including children                                     2                       1
Involve stakeholders in policy change                                 -                       2
       10
Retain /20 policy and GOK provide inputs                              2                       -
Decentralize and strengthen management                                2                       1

                                           Page 59 of 120
Respondents were asked to propose changes they would like to see. The response was
mixed 19.3 percent of the responded indicated that user fee should be abolished while
15.6% indicated that they preferred going back to the old policy and 15.2% suggested the
need to increase user fee.

Patients often feel they should pay more: Chart 4.37 indicates that most patients felt
that higher fees would be reasonable in both Government health centres and
dispensaries. However, the fee rates they suggested were still well below those charged
before the 10/20 policy. In addition, there was a feeling that whilst higher charges would
be justified in mission facilities that the fees currently in place were too high. This
suggests that Government could consider:

                   Increasing fee levels in public facilities
                   the possibility of increasing the registration charges as a means of
                    collecting additional resources – or equally a case for Government
                    considering how, or if, it might provide subsidies to the mission sector to
                    help make charges there more affordable.


                                                 Chart 4.37
                        Comparison of What Patients Actually Paid to What They Felt
                                       Would be a Reasonable Fee
              400



              350

                                                                           Actual Payment
              300

                                                                           Reasonable Payment
              250
      K Shs




              200



              150



              100



              50



               0
                             Mission              MoH Dispensary        MoH Health Centre




4.2.12 Health Workers’ Perceptions

Many felt that 10/20 means more work and less resources: The 10/20 policy was much
less popular with health workers. Health workers, asked how 10/20 policy affected their
work, highlighted the fact that the increased workload was the most important effect. This
is borne out by the evidence presented earlier though the picture does vary by district and
utilisation in many cases has fallen to levels similar to those earlier in 2004. Shortage of
resources - that is finance and manpower - affected 17.3% of the facilities while lack of
drugs affected 13.5% and 3.8% of the facilities were not affected by the new policy.

                                              Page 60 of 120
                                                                    10
    Table 4.8: Distribution of facilities by priority areas where    /20 policy affected the work of Health
                                                    workers.

AREAS                                      NO. OF FACILITIES                       %
Not at all                                         2                               3.8
Heavy Work-load                                   34                              65.4
Lack of Drugs/Non-Pharm.                           7                              13.5
Shortage of Resources                              9                              17.3
TOTAL                                             52

                                                                         10
                              Table 4.9: Views of Health workers on       /20 policy

                                                Dispensary          Health         TOTAL         %
                                                                    Centre
                 10
Strongly support /20 policy                           2                -                2        3.9
It has made things better                             8                3               11       21.1
Has not made any difference                           1                2                3        5.8
Has made things worse                                16                6               22       42.3
Totally abolish user fees                             2                1                3        5.8
Go back to old policy before July                     8                3               11       21.1
TOTAL                                                37               15               52      100.0



  There was little support for the 10/20 policy. It is evident that in very few facilities (39%)
  the workers supported the new policy. Whereas in 11 facilities the workers said the policy
  has made things better 22 facilities indicated otherwise. Health workers at the facilities
  were also asked to propose by priority changes they would like to be effected in the cost
  sharing policy – most responses reflected the need for additional funding.

  Summary of Stakeholder Perceptions

  From the findings the respondents were generally of the opinion that the policy was good
  as it allows those who could not afford higher fees to access health services at the
  facilities. However, in all the districts the respondents indicated that the policy had
  affected quality of services provided since they could not buy common drugs and non-
  pharmaceuticals, had to lay off support staff who were employed by the community and
  had to discontinue some essential services such as laboratory, maternity and community
  pharmaceutical services. Further through interviews with health workers and discussions,
  the respondents felt that the 10/20 policy can only work if Government maintains adequate
  supply of drugs and non pharmaceuticals, employs more staff and allocates more funds
  for both recurrent and development expenditure.


  4.2.13 Impact on Access to Services

  The poor are more likely to use dispensaries and seem equally likely to be charged:
  It is not possible to say much definitively as to whether access to services has been
  improved especially for poorer groups. As shown earlier, exemptions and waivers appear
  to be fairly restricted and focus largely on the under 5s. Patient exit surveys suggest that
  the poor do not appear to get any preferential treatment and are as likely to pay for
  services as those who are better off.

                                              Page 61 of 120
             Table 4.10: Likelihood of Being Charged According to Educational Status

                            No                    Primary                      Secondary                          College
                          Education              Education                     Education                         and Above
 Charged                     36                      66                           33                                 7
 Not Charged                 10                      36                           13                                 4

The survey evidence also tends to suggest that poorer groups are more likely to seek
care at dispensaries rather than health centres and mission facilities (chart 4.38 below).
Thus, if Government is interested in improving access to the poorest it needs to focus its
attention at this level
                                                            Chart 4.38
                            Choice of Provider by Characteristics of Housing
           100%




           80%


                                                                                                                  Government Health
                                                                                                                  Centre
           60%
                                                                                                                  Government
                                                                                                                  Dispensary
       %




           40%
                                                                                                                  Mission



           20%




            0%
                   Thatched/Mud       Iron Roof/Mud Walls    Iron Roof/Brick or Timber   Iron Roof/Stone Walls
                  Housing/Manyatta                                     Walls




4.2.14 Availability of Drugs

The overall picture seems to be one in which 10/20 led to an initial surge in demand
which was accompanied by an initial input of drugs. However, this increase was not
sustained –and the value of drugs received at the facility level actually declined in
September and October. Given that availability of drugs is a major factor in the choice of
a health facility it seems likely that the lack of drugs contributed to the decline in
utilisation. It is also likely that relatively understaffed public health facilities personnel
struggled to cope with the influx. In some cases sections of service delivery were closed.
When the patients found that quality of services was affected, the number attending the
facilities generally went down. However, as drug receipts increased late in the year
utilisation seems to be picking up again. It remains to be seen whether this trend will be
sustained – but this clearly highlights the close relationship between the availability of
drugs and utilisation

Chart 4.39 shows that the vast majority of drugs are provided in kind through drug kits.
Some districts are able to provide some additional support in the form of loose drugs
whilst the contribution from cost sharing revenues is minimal.



                                                      Page 62 of 120
                                                                                                                                        Chart 4.39

                                                                                       Value of Drugs Received in Study facilities during 2004
                                        2,000,000
                                                                                                                                                                        Health Centres - User Fee Revenue
                                                                                                                                                                        Dispensaries - User Fee Revenue
                                        1,800,000
                                                                                                                                                                        Loose Drugs
                                                                                                                                                                        Drug Kits
                                        1,600,000


                                        1,400,000


                                        1,200,000
 K Shs




                                        1,000,000


                                                                      800,000


                                                                      600,000


                                                                      400,000


                                                                      200,000


                                                                          -

                                                                                  Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

A key issue in terms of the effect of 10/20 is the fact the value of drugs received as
reported by facilities declined significantly at the very time they were required to
sustain the initial surge in utilisation. Chart 4.40 to Chart 4.43 show that supplies have
increased somewhat since and there is some evidence that utilisation may also be
increasing again. The situation in Health Centres seems to have improved somewhat on
average, but in Dispensaries, the supply has tended to decline. The supply continues to
be erratic in all facilities and is not pegged on demand.

                                                                                                                                        Chart 4.40
                                                                                                        Average Monthly Receipt of Drug-Kits in Health Centres by Districts

                                                                                                                                                                                    UASIN GISHU
         Number of Drug-Kits received of all types during the month




                                                                      25.00
                                                                                                                                                                                    NAROK
                                                                                                                                                                                    MERU SOUTH
                                                                                                                                                                                    KILIFI
                                                                      20.00                                                                                                         KAKAMEGA
                                                                                                                                                                                    ISIOLO



                                                                      15.00




                                                                      10.00




                                                                       5.00




                                                                       0.00
                                                                                Jan   Feb   Mar   Apr    May   Jun    Jul   Aug   Sep   Oct   Nov   Dec   Jan   Feb    Mar    Apr    May     Jun




                                                                                                                                   Page 63 of 120
                                                                                                                               Chart 4.41


                                                                                         Average Monthly Receipt of Drug-Kits in Dispensaries by Districts


                                                             20.00                                                                                                       UASIN GISHU
                                                                                                                                                                         NAROK
                                                             18.00                                                                                                       MERU SOUTH
Number of Drug-Kits received of all types during the month




                                                                                                                                                                         KILIFI
                                                                                                                                                                         KAKAMEGA
                                                             16.00
                                                                                                                                                                         ISIOLO

                                                             14.00


                                                             12.00


                                                             10.00


                                                              8.00


                                                              6.00


                                                              4.00


                                                              2.00


                                                              0.00
                                                                     Jan   Feb   Mar   Apr   May   Jun   Jul   Aug      Sep   Oct    Nov   Dec   Jan   Feb   Mar   Apr    May   Jun




                                                                                                                               Chart 4.42

                                                                                                    Trends in Supply of Drug-Kits to Health Centres


               18.00
                                                                                                                                                                                  Jan-Mar
                                                                                                                                                                                  Apr-Jun
               16.00                                                                                                                                                              Jul-Sep
                                                                                                                                                                                  Oct-Dec
                                                                                                                                                                                  Jan-Mar
               14.00                                                                                                                                                              Apr-Jun


               12.00


               10.00


                                                  8.00


                                                  6.00


                                                  4.00


                                                  2.00


                                                  0.00
                                                                       ISIOLO            KAKAMEGA              KILIFI               MERU SOUTH           NAROK             UASIN GISHU




                                                                                                                          Page 64 of 120
                                                                                                                            Chart 4.43

                                                                                                      Trends in Supply of Drug-Kits to Dispensaries


 9.00
                                                                                                                                                                     Jan-Mar
                                                                                                                                                                     Apr-Jun
 8.00                                                                                                                                                                Jul-Sep
                                                                                                                                                                     Oct-Dec
                                                                                                                                                                     Jan-Mar
 7.00                                                                                                                                                                Apr-Jun


 6.00


 5.00


 4.00


 3.00


 2.00


 1.00


 0.00
                                                                           ISIOLO        KAKAMEGA              KILIFI        MERU SOUTH           NAROK       UASIN GISHU


On average there were four months in year 2004 in which facilities did not get supply of
drugs. The team was also informed that there are drugs at the regional KEMSA stores
and the distribution of these drugs to the district stores and subsequently to the health
facilities is where the problem lies. In Kakamega district for example, no STl kits were
supplied to the dispensaries. Lack of transportation was cited as the major reason for
poor supply of drugs from the regional stores. It is therefore recommended that the drugs
policy should be reviewed with a view to having direct distribution of drugs direct to the
lower level facilities.

As a result the value of drugs received declined significantly in comparison to the number
of new cases (a measure of the number of curative interventions) in all study districts

                                                                                                                            Chart 4.44

                                                                                           Value of Drugs Received Compared to New Cases
                                                                           350

                                                                                          Jan-March
        Drugs Kits pls Loose Drugs/New Cases, New Visits + Reattendances




                                                                           300            Apr-June
                                                                                          July-Sept

                                                                           250
                                                                                          Oct-Dec



                                                                           200



                                                                           150



                                                                           100



                                                                           50



                                                                            0
                                                                                    KAKAMEGA                KILIFI            MERU SOUTH              NAROK           UASIN GISHU




Whilst facilities reported stock outs of some drugs notably antibiotics the overall picture
does not look too bad.
                                                                                                                        Page 65 of 120
                                                                    Chart 4.45
                            Facilities Reporting Stockouts of Essential Drugs by Type

               45

               40                                                                                                    4 months+

               35                                                                                                    3-4 months

               30
                                                                                                                     1-2 months

                                                                                                                     None
               25
      number




               20

               15

               10

                5

                0
                     Antibiotics     Antimalarials        Antibiotics       Antimalarials    Antibiotics         Antimalarials
                          MoH Health Cenmtre                      MoH Dispensary                           Mission




Availability of drugs is generally considered to be only fair with a high proportion of the in-
charges reporting that they receive less than half the drugs they require. A large number
use cost sharing revenue to supplement their allocation of drug kits. However, such
support can only make a very limited contribution to meeting their overall needs and their
ability to do so will have been further eroded by 10/20.
               Table 4.11: Government Facilities Indicating Status of Drugs Availability by District

                DISTRICT                       GOOD                        FAIR                   POOR                           TOTAL
                Isiolo                           3                           2                      -                               5
                Narok                            3                           4                      -                               7
                Kilifi                           -                           7                      2                               9
                Kakamega                         2                           8                      1                              11
                Meru South                       -                           6                      1                               7
                Uasin Gishu                      1                           8                      4                              13
                TOTAL                            9                          35                      8                              52
                % TOTAL                         17.3                       67.3                    15.4                           100.0

                    Table 4.12 In Charge Views on Proportion of Drug Needs Current Received

                                                       All              Government -        Government                  Mission
                                                     Facilities         Health Centres      Dispensaries                Facilities
                      25% and Below                     7                      3                  4                        0
                      26-50%                           23                      8                 14                        1
                      51-75%                           21                      2                 15                        4
                      76-100%                           8                      0                  6                        2

                          Table 4.13: Use of Internal Funds to Pay for Undersupplied Drugs

                                                               Government -                   Government                         Mission
                                   All Facilities              Health Centres                 Dispensaries                       Facilities
                    Yes                 33                            8                            21                               4
                    No                  23                            5                            18                               0




                                                               Page 66 of 120
4.2.15 Governance and Operational Issues

A number of important issues were identified:

Reduced ownership

  The Health Centre Management Team and Health Centre Committee no longer felt
   that it was their responsibility to account to the DMOH

Weak incentives

  The District Accountants had no incentive to process the AIE’s from cost sharing
   program. This was an added burden to them without the requisite remuneration.

  In-charges at the facilities felt that the burden on providing the service plus
   performing the necessary clerical tasks of recording was too much for them to cope
   adequately.

Implementation issues: Whilst cost sharing policies were clear they were not necessarily
followed at operational levels.

  poor discipline in submitting of returns allied to lack of adequate supervision from the
   Headquarters.

  lack of basic tools and resources, i.e. stationery, receipt books, and departmental
   registers

  low staffing level

  inadequate training on the use of tools for the in-charges.

  non compliance of guidelines on policy. Recording of cost sharing receipts and
   payments has not been done in some districts, as a result, the non-compliance leads
   to a violation of the audit and exchequer procedures.

  impracticality in having bank accounts for all facilities due to location and
   infrastructure constraints.




                                      Page 67 of 120
4.3 Key Conclusions

The overall picture that emerges is one of a well meaning policy aimed at improving
access to health care which has had some positive results but has far from reached its full
potential. The experience of Uganda has shown that a well planned approach enjoying
significant political commitment can have a very positive effect.

A key shortcoming of the approach has been a failure to consider the complementary
measures required to make 10/20 work. Specifically, there has been a failure to provide
the resources and inputs to ensure that facilities are able to cope with the increased
demand without reducing quality. Even if inputs had remained constant it would have
been very difficult for facilities to provide a quality service to the increased number of
patients. What seems to have happened is that key inputs actually declined at the very
time substantial increases were required. It is not just an issue of financial allocation: drug
kits appear to have been available at district levels but have not been made available to
facilities. Equally, funds from budget 335 could, in theory, have compensated, at least to
some degree, for the loss of user fee revenue. In practice, though, these funds have not
been made available to facilities.


4.3.1 Issues and Options

The need for complementary inputs and actions

Government needs to pay attention to the complementary measures necessary to
improve performance at peripheral levels and support the implementation of the cost
sharing policy. The results highlight:

   the failure of resources to trickle down to the facility level emphasises the importance
    of greater clarity in budgetary processes at the very least. Facilities need to be aware
    of budgets available to them under head 335 and districts need to be aware of their
    responsibility to pass these funds on. Ideally resources should be released direct to
    facilities. Budget head 335, could in theory be used to compensate facilities for the
    loss of resources associated with 10/20. In practice, the current amounts are too small
    – especially for the better off districts which raise a lot of cost sharing revenue – and
    the funds never reach the facilities anyway.

   the disparity in funding levels at facility level and the need to ensure that the resource
    allocation process takes into account both access to alternative funding sources as
    well as workload.

   the importance of adequate and timely supplies of drugs but also the need to relate
    drug supplies more closely to need at the facility level.

   the need to recruit and post more nurses and other staff who can provide specialised
    services such as maternity and pharmacy in these facilities.




                                       Page 68 of 120
       the need to ensure support staff are in place to ensure adequate cleanliness and
        security. Costs will need to be met by Government if cost sharing funds are
        insufficient.

       official cost sharing revenues represent a relatively small proportion of out of pocket
        expenditures associated with accessing Government health centres and dispensaries.
        If financial barriers are to be addressed, action will be required to reduce other forms
        of out of pocket expenditures associated with care at these levels

   4.3.2 The future of 10/20

   The broad options would be:

           to maintain the existing approach and strengthen implementation.

           to raise user fees to levels felt affordable by patients – a 40/80 policy or a 20/40
            policy. This would meet some of the concerns of health workers, it would increase
            net revenues and would still be largely affordable to patients .

           to abolish fees entirely in view of the low level of resource raised. This would
            require steps to ensure that facilities are able to access non salary resource from
            alternative sources.

   The broad advantages and disadvantages are outlined below:
              Table 4.14: Advantages and Disadvantages of Different Cost Sharing Approaches

                                    Advantages                                   Disadvantages
Maintain the existing approach      Political support. Popular with the public   Mixed impact to date. Unlikely to
and strengthen implementation                                                    generate significant net revenue

To raise user fees to levels felt   Would generate additional resources –        Increases access problems for
affordable by patients – a 40/80    higher levels than pre 10/20. Facilities     some patients
policy                              more able to meet non salary costs and
                                    employ casuals
                                    Popular with health workers
To abolish fees entirely            Current approach raises very little net      Risk of further reduction in
                                    revenue – therefore little loss in revenue   resources at facility level
                                    Popular with the public
                                    Reduced burden on staff at facility level


   It is recommended that Government critically review these options in the light of the
   objectives of the current policy and its failure to fully achieve the desired objectives. If the
   aim of 10/20 is to raise significant net revenue it probably fails to do so. If it aims to
   improve quality its ability to contribute is negated by a failure to address other important
   factors such as drug supply

   4.3.3 Management arrangements

   As well as additional resources, facilities also need flexibility in how these resources are
   used. Community funds, despite being relative modest in size were very popular as they

                                                   Page 69 of 120
were fully flexible. It is difficult to see how the old arrangements for use of funds could be
applied under the 10/20 policy. Indeed, one of the positive outcomes of the lack of
guidance is that the previous approach has been dropped and that facilities retain funds
locally and use them as they see fit. It is not clear whether facilities are still expected to
prepare a plan. Such an approach would be self defeating and it is recommended that
this approach is at best dropped, or not reinstated and at worst ignored.

4.3.4 Assessing the Longer Term Impact

It is fairly evident that the response to 10/20 is complex and is evolving. It is
recommended that a follow up exercise be carried out to track utilisation and cost
sharing revenue and expenditure trends for the first half of 2005 using the existing
tools. This could be done during the third quarter of 2005.

Further comparison of average monthly collection and vote 335 which gives allocation for
recurrent expenditure to health centres and dispensaries was undertaken. The findings
indicate that at these levels of facilities, those in-charge are not aware of the allocations
as the funds are controlled from the district headquarters and decisions on expenditures
are made at that level. In summary, vote 335 does not trickle down to the lower level
facilities as budgeted.

From these findings, it is recommended that the Government should increase its
direct funding to facilities and improve on drugs and non-pharmaceutical supplies.




                                       Page 70 of 120
5. ADEQUACY OF RESOURCES TO PROVIDE ESSENTIAL SERVICES

5.1 Introduction

The aim of this section is:

      to consider what is currently being spent in the sample facilities,

      to estimate what an ideal allocation might be (assuming existing levels of
       utilisation)

      to further estimate what funding would be required if utilisation were to increase as
       might be expected if quality were to increase

      to assess the implications for workload

There is a heavy emphasis on human resource costs as these make up a large proportion
of costs in RHF and the analysis draws heavily on data from the recent Human Resource
Mapping exercise

In order for RHF to deliver the required services, both in terms of quantity and quality,
various complementary resources are required in appropriate amounts and proportions.
For outpatient services skilled personnel (mainly nursing), drugs, vaccines, family
planning commodities, non-pharmaceuticals play a vital role in determining availability
and quality of services rendered. Where inpatient services are offered, even higher
demand for personnel, especially nurses, to cater for both day and night shifts. Health
Centres generally offer a wider range of services including inpatient (mainly maternity).
Though, some dispensaries, through the use of cost sharing and community funds, are
also offering maternity and laboratory services.

The personnel type and skill level is particularly important since it affects ability of the
clients/patients to access quality services. Shortage of personnel (even where all other
resources are available) means that other complementary resources are not utilised
optimally. Furthermore, where demand for services rises without corresponding increase
in personnel resources, waiting time increases. Alternatively, the scarce personnel reduce
the amount of time used per patient, thereby compromising quality.

Recent trends in the pattern of health needs have placed heavy demand on the RHF. In
particular, the emergence of the HIV/AIDS pandemic and related opportunistic infections
such as tuberculosis and resistance to common anti-malarial drugs have, strained
resources at health centre and dispensaries. In costing service provision at RHF it is
important to move away from traditional (incremental) approaches to resources planning.
There is need to critically look at the specific issues being addressed by RHF and the
specific resources required.

The approach used in this study to cost RHF therefore begins from the point of view of
specific service needs (as exemplified by utilisation patterns) to project resources
required. However, more work is required since it was not possible to get into the details
of each and every service. This study provides a framework for further development in
this area.

                                       Page 71 of 120
The costing data in this report is supported by spreadsheets (in Excel software) that
provide a framework for costing specific interventions at RHF level. This is particularly
important at this stage of health sector reforms when emphasis is on demand-driven
resource allocation rather than supply-driven planning, particularly in relation to drugs and
medical supplies.


5.2 Resource Allocation to RHF

The financing pattern can be described in the following terms:

Cost Components

Funding is required for (a) personnel, (b) drugs – kits and loose drugs, (c) vaccines, (d)
family planning commodities, (e) Non-Pharmaceuticals (f) other operational expenses and
(g) capital items such as equipment and infrastructure such as buildings.

Cost Structure

A distinction needs to be made between costs which are fixed in the short term and those
which are variable. In the short run resources such as infrastructure and skilled personnel
tend to be fixed and are independent of workload. However, there is a level beyond which
expansion of services has to be accompanied by the expansion of fixed resources (i.e.
when the workload becomes too great for existing staff to cope). Consumable inputs such
as drugs can be more easily traced to reflect the workload.

Financing Mechanisms

Currently, facilities receive resources through a number of channels. Most of these costs
are delivered to RHF in kind, and staff salaries are paid directly. Resources for rural
health centres and dispensaries are also provided under budget head 335. (See annex 4
for details) Of this around 90% is available at the district level to procure drugs and
supplies with small amounts – less than K Shs 100,000 per annum per facility made
available to the facilities to cover other operational items such as water, maintenance,
office expenses. In addition facilities raise funds through cost sharing which have tended
to account for around 10% of total facility expenditure.

5.3 General Findings Related to Human Resources

For effective and efficient service delivery, facilities have to be manned by the right
number of staff with the right skills. To facilitate this, the Ministry of Health has established
staffing norms for health centres and dispensaries (table 5.1).




                                        Page 72 of 120
                 Table 5.1: Staffing Norms for Health Centres and Dispensaries

               Cadre                                                          Health Centre*                Dispensary
               Clinical Officer                                                       2
               Enrolled Community Nurse                                               8                          2
               Public Health Officer                                                  1
               Public Health Technician                                               1                          1
               Laboratory Technician                                                  1
               Family Health Field Educator                                           2
               Statistical Clerk                                                      1
               Patient Attendant                                                      3                          1
               General Attendant                                                      5
               Driver                                                                 1
               Cook                                                                   2
               Watchmen                                                               2                          1
               Pharmaceutical Technician                                              1
               Community Nutritional Technologist                                     1
               Clerk/Cashier                                                          1
               Total                                                                 32                          5
      * based on Health Centre Type I so there will be some underestimation of shortfall as some facilities are HC type 2

Against these norms there is an acute shortage of staff in RHF, particularly in relation to
nursing, laboratory, and general support staff. This study therefore confirms findings of
the Human Resource Mapping Study. (see table 5.2), which show a total shortfall of
15,101 staff in health centres and dispensaries.




                                                    Page 73 of 120
         Table 5.2: Aggregate Staffing Shortfall and Requirements at RHF Level Relative to
                                               Norms

                                                                    Additional       % Addition     Additional
                                                  Required          Salary           Salary         Salary          % Addition
                       Staff      Current         Annual            Before           before         with            Salary
                       Shortf     Annual          Salaries as       Redistributio    Redistributi   Redistributi    with
Cadre                  all        Salary          per norm          n                on             on.             Redistrib
a) Health Centre Level
Clinical Officers         -546     40,757,100       115,684,294       74,927,194         183.8%      72,868,755        178.8%
Nurses                  -1,633    293,690,280       506,196,659      212,506,379          72.4%     193,767,299         66.0%
Public Health
Officers                     0    124,730,460       124,730,460                 0           0.0%    -46,432,803         -37.2%
Laboratory
Technicians               -399               0       36,686,816       36,686,816                     36,686,816
Family Health Field
Educators                 -798               0       73,373,631       73,373,631                     73,373,631
Statistical Clerk         -399               0       36,686,816       36,686,816                    -40,903,430
Patient Attendant       -1,197               0      110,060,447      110,060,447                    110,060,447
General Attendant       -1,234     58,846,020       172,308,502      113,462,482         192.8%     113,462,482        192.8%
Driver                    -399               0       36,686,816       36,686,816                     36,686,816
Cook                      -798               0       73,373,631       73,373,631                     73,373,631
Watchmen                  -798               0       73,373,631       73,373,631                     73,373,631
Pharmaceutical
Technician                -393      1,850,820        57,802,532       55,951,712        3023.1%      55,951,712        100.0%
Community
Nutritional
Technologist               -80     48,074,580        59,094,541       11,019,961          22.9%      11,019,961         22.9%
Clerk Cashier             -399     15,129,120        43,469,584       28,340,464         187.3%      28,340,464        187.3%
Total                   -9,073    583,078,380     1,519,528,360      936,449,980         160.6%     791,629,412        135.8%
b) Dispensary Level
Nurses                    -811    330,847,380       435,801,557      104,954,177          31.7%      47,753,503         14.4%
Public Health
Technicians               -852    127,205,100       235,475,575      108,270,475          85.1%      45,875,166         36.1%
Patient Attendant       -1,455                      127,374,204      127,374,204                    126,727,138
General Attendant       -1,455     74,148,420       201,522,624      127,374,204         171.8%     121,401,537        163.7%
Watchmen                -1,455                      127,374,204      127,374,204                    127,374,204
Total                   -6,028    532,200,900     1,127,548,165      595,347,265         111.9%     469,131,549         88.1%

Grand Total
(HC+disp)               -15,101   1,115,279,280     2,647,076,525    1,531,797,245       137.3%     1,260,760,961      113.0%
               Source: Human Resource Mapping Study, Ministry of Health

        Such shortfalls significantly impair the capacity to deliver quality services. During the
        course of the study such occurrences were found to be a common feature of RHF. As a
        result of these shortfalls:

               many dispensaries are manned by an average of one nurse only. This means
                closure of such facilities any time the nurse is sick, on leave or when engaged in
                workshops and other activities away from the facility.

               services are provided by auxiliary/support staff (often casual staff paid through cost
                sharing and community funds) rather than nurses.

                                                        Page 74 of 120
The recently launched Health Service Provision Assessment Covering 20045 highlights
major deficiencies in provision of some of these services. The report, for example, shows
that only a quarter of ANC clients at dispensary level were counselled fully in preparation
for delivery. At health centre level, performance was worse at only 19 per cent.
Furthermore, less than 40 per cent of clients were counselled on risk signs of pregnancy
such as bleeding, swollen face and hands, breathlessness etc. There is thus a need to
urgently address personnel shortfalls in RHF if access to quality services is to be
improved and progress made towards the Millennium Development Goals

Costs of Meeting the Staffing Norms

Expenditure on personnel would have to be increased by almost 140 per cent to achieve
the existing staffing norms. However, if staff redistribution were to be carried out, from
facilities where staffing levels exceed the norms the additional resource requirement
would decline to 113 per cent. In other words, spending on personnel has to be more
than doubled just to meet the norms. It is also important that the existing norms are
revisited as they were established before current challenges such as HIV/AIDS were fully
appreciated.

Furthermore it is important to note that some of the current staff in the facilities, especially
support such as patient attendants, watchmen and clerks are currently engaged through
cost sharing and community funds. If this extra-financing were to be borne entirely by the
Government then additional financing by the Government will by far exceed 100 per cent.

A more detailed analysis of the Human Resource cost implications is shown in annex 5.

5.4 General Findings Related to Non Salary Expenditure

Apart from fixed resources, we have variable resources such as consumables like drugs
and non-pharmaceuticals. These resources, as already mentioned above, can easily be
altered to match service utilisation levels. There is therefore a need to monitor the pattern
of health service utilisation constantly to ensure that adequate consumables are provided.

A key finding of this study is that resources tend to be allocated to RHF without any active
facility involvement in the decision making process. Specific problems have included:

A mismatch between needs and allocation: The availability of the drug kits is a major
factor that affects the ability of RHF to deliver services. A review of workload across the
districts suggests that there was a serious mismatch between facility workload and drugs
distributed to respective RHF. Facilities that are busier tend to be particularly
disadvantaged.

Table 5.3 below shows the average number of general drug kits and STI kits received per
health centre and dispensary in the six sample districts in 2004. A review of this table
together with table 5.4 which shows average annual caseload for malaria and URTI
(which account for over 60 per cent of outpatient caseload in most facilities) prior to July


5Republic of Kenya (2005), Ministry of Planning and National Development, National Coordinating Agency for Population and Development,
Kenya Service Provision Assessment Survey 2004 (Preliminary Report).

                                                          Page 75 of 120
2004 shows that the drug supply pipeline was completely out of tune with need
(exemplified by caseload). Though the average health centre in Uasin Gishu had a
workload double that of Isiolo, the number of drug kits provided to facilities in Isiolo was
much higher. This occurred despite the fact that one of KEMSA’s regional deport is
located in Uasin Gishu district. The fact that health centres in Narok had to rely heavily
on kits designed for use at dispensary level is further evidence of this mismatch

Similarly many of the non-pharmaceuticals such as dressing material and laboratory
reagents are also either supplied in limited amounts or not at all.

                Table 5.3: Average Number of Drug Kits Received per RHF in 2004

                                                                  Kakame     Meru         Uasin
            Drug Kit     Isiolo        Narok     Kilifi           ga         South        Gishu
            Health Centres
            HC1                    6        0                8          7            12            6
            HC11A                  8        3                3          6            11            3
            HC11B                  0        0                3          0             0            0
            D1                     0       10                8          1             2            5
            D11A                   0       10                8          2             2            8
            D11B                   0        5                1          0             0            0
            STI KIT                2        2                1          1             2            1
            Dispensary
            HC1                    0        0                0          0             5            1
            HC11A                  0        0                0          0             2            0
            HC11B                  0        0                0          0             0            0
            D1                    11       10               14          9             8            6
            D11A                  12       10               14          9             8            7
            D11B                   0        0                0          0             8            0
            STI KIT                2        1                0          0             0            0



A key result of this mismatch is a chronic shortage of some types of drugs and non-
pharmaceuticals resulting in low quality of services and ultimately low utilisation of
services. The importance of drug availability is highlighted by the finding that in some
places community members living around a facility monitor the delivery of drugs and
suddenly turn up for services any time they notice that drugs have been delivered.

               Table 5.4: Average New Cases of Malaria and URTI Prior to July 2004

                             District/Stratum
           Intervention                                                      Meru          Uasin
           Area              Isiolo    Narok       Kilifi        Kakamega    South         Gishu
           a) Health Centre Level
           Before July
           2004
           Malaria             1,812     2,682     6,008             6,473       9,704            6,519
           URTI                1,596     2,987     2,706             1,743       6,023              888
           Total               3,408     5,669     8,714             8,216      15,727            7,407




                                          Page 76 of 120
An erratic supply of drug kits: One of the key factors affecting availability of drugs and
other non-pharmaceuticals is that KEMSA’s role seems to end at regional depot level,
leaving DHMTs to organise how drugs and other non-pharmaceuticals reach individual
RHF facilities.

Inappropriate content of the drug kits: The study identified a serious mismatch
between existing treatment policies and resource allocation to RHF level. Many critical
drugs and non-pharmaceutical are either not supplied at all or provided in very small
quantities. For example, though the current malaria treatment guidelines 6 require the use
of both Sulphadoxine 500mg combined with Pyrimethamine 25mg (SP) and Amodiaquine
in treatment of uncomplicated malaria, only SPs are available in the drug kits delivered to
RHFs. In addition, at current service utilisation levels a drug such as Fansidar (for
malaria) is over supplied, whilst quinine - a critical input to malaria treatment is not
supplied. Amodiaquine is twice as costly as SPs and thus difficult for facilities to fund
through their own sources. Another critical drug that is also missing and which is used in
2nd line treatment of malaria is quinine. As a result high failure rates of up to 50 per cent
in cure of malaria have become a common feature in many RHF. The remedy to the
supply issue therefore is not just increasing the number of kits supplied, but identifying the
specific inputs (drug and non-pharmaceuticals) required. Doubling or tripling of drugs kits
supplied will simply mean over-supplying some drugs, while not addressing some critical
ones that are not being provided at all. To effectively address the issues of drugs and
other consumables extra supplies focusing on drugs and non-pharmaceuticals not
already contained in the current kit system need to be supplied. The analytical framework
used in this chapter would be useful in achieving this.

A lack of STI Kits: Effective treatment of STIs is vital in addressing reproductive health
and combating HIV/AIDS. There appears to be a major disconnect between supplies at
national level and actual delivery at RHF level. The study found out that supplies are not
reaching the majority of RHF. In particular, in four out of six sample districts (67 per cent
of the districts) visited dispensaries had not received any STI kits in 2004. Yet at national
level the study team was assured that there were adequate supplies.

Shortages in Equipment: The Kenya Health Service Assessment report further
highlights non-availability of key equipment such as partographs that are required in
monitoring of pregnancy. According to the study, only about 40 per cent of health centres
offering maternity services had this vital equipment. It is therefore evident that apart from
dealing with personnel the issues of equipment has to also be addressed. This requires
an analysis of the basic equipment required to deliver the health package and
annual requirements for replacement and operation and maintenance per year. This
study, however, could not get into details of each type of equipment.

Such issues would be less of a problem if facilities had flexible funds to address such
shortfalls. In Uasin Gishu district, for instance, the shortfall led to heavy dependence on
purchases of loose drugs and other supplies using cost sharing and community funds.
However, as we have seen, with the introduction of 10/20 policy, the possibility of using
cost sharing/community funds to facilitate delivery of drugs and other supplies to RHF has
been significantly reduced and not replaced with any alternative source of funding.
Allocations under Budget head 335 are insufficient and do not flow anyway to the facility

6   Republic of Kenya (2003), Ministry of Health, National Guideline for Diagnosis, Treatment & Prevention of Malaria for Health Workers.

                                                               Page 77 of 120
level. As a result RHF are increasingly dependant upon Government funds and the 10/20
policy has reinforce the perception at community level that Government should shoulder
the full responsibility with respect to all supplies.

Any attempt to address access to health services, therefore, has to simultaneously
address resource allocation, managerial and logistical issues that affect delivery of drugs
and medical supplies right up to the service delivery point. The fact that facilities in Isiolo
District (which are very hard to reach) seems to do better in terms of supply of medical
inputs compared to their counterparts in Uasin Gishu (that are easily accessible) is a
strong indicator that there are serious managerial issues related to both DHMT and
KEMSA, that continue to inhibit supply of key inputs.


5.5 Assessment of Current Expenditures in Health Centres and Dispensaries

Most expenditure in RHF is financed centrally and delivered to RHF in kind. To arrive at
the current level of spending on RHF an analysis of inputs was carried out focusing on the
2004 calendar year. The value of inputs such as drug kits, vaccine, and contraceptives
was estimated based on quantities utilised in 2004. In addition to resources financed from
central level, additional resources were derived from cost sharing and community funds.
As shown earlier, these funds mainly finance casual staff (cleaners, clerks etc),
supplementary drugs and medical supplies, operational expenses of facility committees,
utilities and sometimes capital investment including buildings etc. Table 5.5 and fig. 5.1
and 5.2 provide details on the current expenditure trends.

The current expenditure per health centre per annum ranges from K Shs. 1.5 million in
Isiolo District, to K Shs. 4.4 million in Uasin Gishu with an average around K Shs. 3
million. For dispensaries, average expenditure was around K Shs. 1 million per annum. -
ranging from just below K Shs. 1 million per annum to slightly over K Shs. 2 million.
Composition of the cost is such that personnel costs account for almost half the
expenditure at health centre level. At dispensary level, the significance of personnel costs
is much lower.




                                       Page 78 of 120
             Table 5.5: Estimated Average Expenditure (in K Shs.) per Facility for RHF during 2004

a) Health Centre
                                                                                                             MERU                UASIN
                                        ISIOLO        NAROK               KILIFI       KAKAMEGA              SOUTH               GISHU
Sub-Total (Personnel)                     684,060    1,401,100           1,221,930        889,316           1,949,465            1,633,476
Drug Kits (including STI)                 202,575      582,370             434,269        196,364             317,048              394,915
Loose Drugs                                20,576        4,824              39,373         28,553              10,958              449,427
Sub-Total (Drugs)                         223,151      587,195             473,641        224,917             328,006              844,342
Vaccine                                   371,510      210,504              98,557        493,738             209,957              749,652
Contraceptives                            194,528      154,267           1,387,769        727,879             194,399              219,900
Sub-Total
(Vaccines+Contraceptives)                566,038        364,771          1,486,327           1,221,616        404,356              969,551
Total (All Commodities)                  789,189        951,965          1,959,968           1,446,533        732,363            1,813,893
Cost Sharing/Community
Funds                                      37,009       49,655              72,675              85,965        151,710              918,796
Grand Total                             1,510,258    2,402,720           3,254,573           2,421,814      2,833,538            4,366,165

b) Dispensary
Sub-Total(Personnel)                     257,520        317,843           269,977             344,617         871,852                365,903
Drug Kits (including STI)                469,260        405,815           544,578             336,335         387,115                266,032
Loose Drugs                               16,279             78            50,123              11,855          38,171                 86,053
Sub-Total (Drugs)                        485,539        405,894           594,701             348,190         425,286                352,085
Vaccine                                  150,552        131,705           146,649             419,548         211,157                103,157
Contraceptives                            34,873          6,925            58,038              81,851         219,926                 34,896
Sub-Total
(Vaccines+Contraceptives)                185,425        138,630           204,687             501,399         431,083                138,053
Total (All Commodities)                  670,964        544,524           799,388             849,589         856,369                490,138
Cost Sharing/Community
Funds                                     37,009         31,448            181,041              80,049        338,090                 64,664
Grand Total                              965,493        893,815          1,250,406           1,274,255      2,066,311                920,705

      These figures are presented graphically in the charts below

                                             Fig. 5.1:Current Expenditure at HC level in Kshs.


                   6,000,000


                   5,000,000


                   4,000,000
                                                                                                         Other Cost Sharing
                   3,000,000                                                                             Contraceptives
                                                                                                         Vaccine
                   2,000,000                                                                             Loose Drugs
                                                                                                         Drug Kits (including STI)
                   1,000,000                                                                             Personnel


                          0
                               ISIOLO      NAROK     KILIFI   KAKAMEGA    MERU       UASIN
                                                                          SOUTH      GISHU

                                                         District




                                                              Page 79 of 120
                                 Fig. 5.2: Current Expenditure at Disp level in Kshs.

            2,500,000



            2,000,000



            1,500,000

                                                                                        Cost Sharing/Community Funds
            1,000,000
                                                                                        Contraceptiv es
                                                                                        Vaccine

             500,000                                                                    Loose Drugs
                                                                                        Drug Kits (including STI)
                                                                                        Personnel
                   0
                        ISIOLO     NAROK    KILIFI   KAKAMEGA   MERU    UASIN
                                                                SOUTH   GISHU

                                              District




5.6 Assessment of Health Centre and Dispensary Financial Needs Given Existing
Utilisation Levels

In order to assess the extent to which resource allocation to facilities matches needs
(taking utilisation as a proxy measure for need) an analysis of utilisation (at pre-July 2004
levels) for key services was carried out. Tables 5.6 and 5.7 present average annual
utilisation levels for key services per health centre and dispensary in the sample districts
prior to July 2004.

Based on this analysis it is obvious that caseload is heaviest in Kilifi and Meru South. In
these districts, health centres on average serve more than double the number of cases
attended to in other districts. Table 5.5 and fig 5.1, however, suggest that this pattern is
not taken into account when allocating resources particularly consumables such as drugs.
Narok Health Centres, for example, appear to have been better supplied with drugs than
those in Kilifi.




                                                     Page 80 of 120
Table 5.6: Average Outpatient Caseload /Clients attended to per Health Centre before July 2004

                                                                                             Meru          Uasin
 Health Condition                     Isiolo        Narok        Kilifi        Kakamega      South         Gishu
 Health Centre
 Malaria                                1,812        2,682        6,008             6,473     9,704          4,711
 Pneumonia                                120          145           152              754       784              255
 URTI                                   1,596        2,987        2,706             1,743     6,023          1,455
 Diarrhoea                                258          519        1,222               683       272               89
 Intestinal Worms                          41          184           264              178     2,022               20
 Skin Diseases                            162          998        1,230               939     1,835              274
 STIs
   Urethritis                             200          300           340              120       220              240
   GUD                                     60           80           120              100       120              140
   Vaginitis                               80          100           200              160       160              200
 CWC                                    1,296        3,584       11,398             2,603     5,363          1,851
 ANC                                      725          869        3,854             1,023     1,131          1,220
 FP                                       922        1,257           944            1,307     1,886          1,074
 PMTCT – Mothers (Expected = 9% of
 mothers)                                  33           39           173               46           51            55
 PMTCT – Children                          33           39           173               46           51            55
 Maternity (target 60% of ANC
 Mothers)                                 218          261        1,156               307       339              366
 HIV Testing                              216                        862              220       325              812

 Table 5.7: Average Outpatient Caseload /Clients attended to per Dispensary before July 2004

                                                                                            Meru         Uasin
  Health Condition                    Isiolo        Narok       Kilifi         Kakamega     South        Gishu


  Malaria                               1,502         1,366        3,208            2,997     8,846              976
  Pneumonia                               132          299           324             110      1,268               68
  URTI                                  1,044         1,255        1,864             903      4,302              768
  Diarrhoea                               136          334           809             275       407               126
  Intestinal Worms                             64      130           387             115      1,916               39
  Skin Diseases                           204          237         1,215             531      1,520              185
  STIs
    Urethritis                            120          160           340             120       220               100
    GUD                                        60       80           120             100       120               140
    Vaginitis                             120          160           180             160       160               240
  CWC                                     636          384         3,485            1,667     2,787              333
  ANC                                          99       78           735             646      1,364              208
  FP                                      165           67           696             914      1,166              212
  PMTCT – Mothers (Expected = 9% of
  mothers)                                     4            3             33          29        61                 9
  PMTCT – Children                             4            3             33          29        61                 9
  HIV Testing                                                                                  120                 0




                                         Page 81 of 120
Approach to Estimating the Ideal Costs

In costing the basic health package at health centre and dispensary level this study
adopted the Resource Needs Model7 focusing on the kind of resources needed for
services expected at that level. To determine need, utilisation of health services is used
as a proxy measurement. However, it should be clearly understood that utilisation is not a
very effective measure of need, since utilisation is affected by several constraints
including physical access, ability to pay and perceived quality of health care.

Another approach that could have been utilised in estimating the cost of the basic health
package, is the input-output resource model that focuses on the catchment population of
each health facility. The use of such a model, however, would have required much more
information than could be gathered at facility level. This approach which is being used to
come up with the National Health Sector Strategic Plan for 2006-108, focuses on
population based outcome targets and the corresponding input levels required to achieve
the targets. According to the Draft Health Sector Strategic Plan, the annual financing
requirement for the National Essential Health Package (for all levels) is K Shs 80 billion.
However, the specific requirement for health centres and dispensaries has not been
quantified. This study therefore provides complementary information focusing on this level
of health care.

The methodology used is shown in detail in annex 6.

Results


1. Current Costs

Based on resource allocation pattern observed for the 2004 calendar year, the average
annual cost per RHF in the six sample districts, as reflected in table 5.8, amounts to about
KShs. 3 million for Health centres and Kshs. 1.2 million for dispensary.




7Under this model community health needs (particularly the priority ones) are assessed and quantified. Appropriate interventions to
address these health needs are then identified and costed.
8   Republic of Kenya (2005 May), Ministry of Health, The Second National Health Sector Strategic Plan of Kenya (NHSSP II 2005-10 (Draft).

                                                              Page 82 of 120
Table 5.8: Average Cost after adjusting for Consumables and Meeting Personnel Norms at Current
                                         Utilisation Levels

Cost Category          ISIOLO       NAROK        KILIFI       KAKAMEGA      MERU         UASIN        WEIGHTED
                                                                            SOUTH        GISHU        AVERAGE


a) Health Centre

Sub-Total
(Personnel)             684,060     1,401,100    1,221,930       889,316    1,949,465    1,633,476     1,338,264

Drug Kits (including
STI)                    202,575      582,370      434,269        196,364     317,048      394,915       357,214
Loose Drugs              20,576        4,824       39,373         28,553      10,958      449,427       120,371
Vaccine                 371,510      210,504       98,557        493,738     209,957      749,652       395,363

Contraceptives          194,528      154,267     1,387,769       727,879     194,399      219,900       500,826

Sub-Total
Consumables             789,189      951,965     1,959,968     1,446,534     732,362     1,813,894     1,373,774
Cost
Sharing/Community
Funds                     37,009       49,655       72,675        85,965      151,710      918,796       276,875
Grand Total            1,510,258    2,402,720    3,254,573     2,421,815    2,833,537    4,366,166     2,988,912
                                                                            MERU         UASIN        WEIGHTED
b) Dispensary          ISIOLO       NAROK        KILIFI       KAKAMEGA      SOUTH        GISHU        AVERAGE

Sub-
Total(Personnel)        257,520      317,843      269,977        344,617     871,852      365,903       389,993

Drug Kits (including
STI)                      469,260      405,815      544,578       336,335      387,115      266,032     390,076
Loose Drugs                16,279          78        50,123        11,855       38,171       86,053      41,048
Vaccine                   150,552      131,705      146,649       419,548      211,157      103,157     191,234

Contraceptives             34,873        6,925       58,038        81,851      219,926       34,896      68,204

Sub-Total
Consumables             670,964      544,523      799,388        849,589     856,369      490,138       690,562
Cost
Sharing/Community
Funds                    37,009       31,448       181,041        80,049      338,090      64,664        119,257
Grand Total             965,493      893,814     1,250,406     1,274,255    2,066,311     920,705      1,199,812



Extrapolating this to the national level – incorporating the existing 440 health centres and
1,536 dispensaries - would result in an overall cost of KShs 1.32 billion (for health
centres) and KShs. 1.843 billion (for dispensaries). This amounts to a total cost of KShs.
3.163 billion for all RHF.



                                                     Page 83 of 120
2. Ideal Costs at Current Utilisation Level

From the analysis presented above of inputs required to address specific health needs, it
is evident that introduction of PMTCT (especially for children) has a major effect on costs
due to the high cost of Neverapine Syrup for children. Given the major differences in
workload the ideal allocations still vary widely between facilities and between districts
remaining much higher in facilities in Kilifi (health centres), Meru South (both) and Uasin
Gishu (health centres).

The average annual resource requirement (ideal) per RHF based on current service
utilisation is KShs. 10.211 million per health centre and KShs. 1.756 million per
dispensary (see table 5.9). At the national scale, this would require KShs 4.493 billion for
health centres and KShs. 2.698 billion for dispensaries. This amounts to an annual total
cost of KShs. 7.2 billion for all RHF.


              Table 5.9: Average Ideal Resource Requirement at Current Utilisation Level
                                                                          MERU        UASIN       WEIGHTED
 Cost Category         ISIOLO      NAROK       KILIFI       KAKAMEGA      SOUTH       GISHU       AVERAGE

a) Health Centres
Consumables            3,652,388   4,053,032   13,982,905     5,374,093   5,327,284   5,533,720    6,392,482
Personnel Costs (as
per norms)             3,508,180   3,508,180    3,508,180     3,508,180   3,508,180   3,508,180    3,508,180
Utilities (Water,
Power, Telephone)        60,000      60,000        80,000       80,000      90,000      80,000        76,923
Maintenance of
Buildings &
Equipment                50,000      50,000        50,000       50,000      50,000      50,000        50,000
General Admin
(Transport, Cleaning
etc)                      50,000     120,000      250,000       200,000     200,000     200,000      183,846
Total Cost             7,320,568   7,791,212   17,871,085     9,212,273   9,175,464   9,371,900   10,211,431

b) Dispensaries
Consumables             509,895     707,111     1,035,009     1,035,207   1,999,924    450,871       913,077
Personnel Costs (as
per norms)              648,526     648,526       648,526      648,526     648,526     648,526       648,526
Utilities (Water,
Power, Telephone)        30,000      30,000        40,000       40,000      45,000      40,000        38,333
Maintenance of
Buildings &
Equipment                20,000      20,000        20,000       20,000      20,000      20,000        20,000
General Admin
(Transport, Cleaning
etc)                      80,000     100,000      150,000       150,000     150,000     150,000      136,410
Total Cost             1,288,421   1,505,637    1,893,535     1,893,733   2,863,450   1,309,397    1,756,346




                                                Page 84 of 120
5.7 Assessment of Health Centre and Dispensary Financial Requirements Given
Increased Utilisation Levels

As the input mix improves due to better allocation of resources, quality of services should
also be expected to improve leading to increased demand for health services. For the
purposes of this analysis it is assumed that utilisation increases by 100% - a similar figure
to the increase experienced in many sample facilities immediately after the introduction of
the 10/20 policy

Under such circumstances there would clearly be a need for increases in the supply of
consumables directly related to match the utilisation levels. It is less clear, however,
whether such increases in utilisation could be accommodated with the existing number of
staff (even assuming that staffing levels in all facilities had been increased to the norms).
The fact that the in-charges suggested that the increased workload associated with the
10/20 policy was a major burden suggests that it may not be feasible, however, a
comparison of current levels of workload per health workers – with an assumed norm of
40 patients per health worker (see annex 1) suggests that it may be feasible except in
districts where workload is already very high.




                                       Page 85 of 120
                                                                                                                       Chart 5.1

                                                                                                 Average Staff per Unit of Workload by Province
                                                                                                                                                                     Dispensaries
                                                                                  30
      workload/nurses and clinical officer/nurses and public health technicians



                                                                                                                                                                     Health Centres

                                                                                  25




                                                                                  20




                                                                                  15




                                                                                  10




                                                                                  5




                                                                                  0
                                                                                       Central   Coast   Eastern    Nairobi   North Eastern   Rift Valley   Nyanza     Western



This is clearly a complex issue related to the current productivity of staff, current
incentives and the case mix of services provided. For this reason the results are
presented looking at various options related to increased staffing (either doubling existing
staffing levels or strictly following the norms). These options are also accompanied by
matching consumables to specific health needs. The two scenarios are presented below.
Scenario 1

Under this scenario, the existing staffing is expected to be doubled leading to a doubling
of personnel costs. Simultaneously consumables are meant to be doubled based on
specific needs. Table 5.10 shows the cost levels under this scenario. This scenario
results in an average annual cost per Health Centre of KShs. 15.772 million, and an
average cost of KShs. 2.8 million per dispensary. At national scale this would result in an
annual total cost of KShs 6.94 billion for health centres and K Shs. 4.3 billion for
dispensaries. The aggregate annual requirement for all RHF would be KShs. 11.24 billion.




                                                                                                                   Page 86 of 120
Table 5.10 : Doubling Existing Staffing Levels and Providing Consumables as Per Need
                                                                            MERU         UASIN        WEIGHTED
Cost Category       ISIOLO      NAROK        KILIFI           KAKAMEGA      SOUTH        GISHU        AVERAGE

a) Health
Centres
Consumables
(double current
consumption)        7,304,776    8,106,064    27,965,810       10,748,186   10,654,568   11,067,440   12,784,964
Personnel
(double current
personnel)          1,368,120    2,802,200     2,443,860        1,778,632    3,898,930    3,266,952    2,676,527
Utilities (Water,
Power,
Telephone)             60000        60000             80000        80000        90000        80000       76,923
Maintenance of
Buildings &
Equipment              50,000      50,000         50,000          50,000       50,000       50,000       50,000
General Admin
(Transport,
Cleaning etc)          50,000      120,000       250,000          200,000      200,000      200,000      183,846
Total Cost          8,832,896   11,138,264    30,789,670       12,856,818   14,893,498   14,664,392   15,772,261

b) Dispensaries
Consumables
(double current
consumption)        1,019,790    1,414,222     2,070,018        2,070,414    3,999,848     901,742     1,826,153
Personnel
(double current
personnel)            515,040     635,686        539,954         689,234     1,743,704     731,806      779,986
Utilities (Water,
Power,
Telephone)             30,000      30,000         40,000          40,000       45,000       40,000       38,333
Maintenance of
Buildings &
Equipment              20,000      20,000         20,000          20,000       20,000       20,000       20,000
General Admin
(Transport,
Cleaning etc)          80,000      100,000       150,000          150,000      150,000      150,000      136,410
Total Cost          1,664,830    2,199,908     2,819,972        2,969,648    5,958,552    1,843,548    2,800,882




                                                 Page 87 of 120
Scenario 2

Under this scenario, staffing norms are applied accompanied by allocation of
consumables as per need. The cost estimates are as shown in table 5.11. The scenario
results in an average annual cost per Health centre of KShs. 16.604 million, and an
average cost of KShs. 2.669 million per dispensary. At national scale, this would result in
an annual total cost of KShs 7.306 billion for health centres and KShs. 4.1 billion for
dispensaries. The aggregate annual funding requirement for all RHF therefore would be
KShs. 11.406 billion.

Table 5.11: Applying Staffing Norms and Providing Consumables as Per Need
                                                               MERU       UASIN                    WEIGHTED
 Cost Category    ISIOLO      NAROK      KILIFI     KAKAMEGA SOUTH        GISHU                    AVERAGE

a) Health Centres
Consumables
(double current
consumption)         7,304,776    8,106,064    27,965,810   10,748,186   10,654,568   11,067,440   12,784,964
Personnel (as per
norms)               3,508,180    3,508,180     3,508,180    3,508,180    3,508,180    3,508,180    3,508,180
Utilities (Water,
Power, Telephone)      60,000       60,000        80,000        80,000      90,000       80,000       76,923
Maintenance of
Buildings &
Equipment              50,000       50,000        50,000        50,000      50,000       50,000       50,000
General Admin
(Transport,
Cleaning etc)           50,000      120,000       250,000      200,000      200,000      200,000      183,846
Total Cost          10,972,956   11,844,244    31,853,990   14,586,366   14,502,748   14,905,620   16,603,914

b) Dispensaries
Consumables
(double current
consumption)         1,019,790    1,414,222     2,070,018    2,070,414    3,999,848     901,742     1,826,153
Personnel (as per
norms)                648,526      648,526       648,526       648,526     648,526      648,526      648,526
Utilities (Water,
Power, Telephone)      30,000       30,000        40,000        40,000      45,000       40,000       38,333
Maintenance of
Buildings &
Equipment              20,000       20,000        20,000        20,000      20,000       20,000       20,000
General Admin
(Transport,
Cleaning etc)           80,000      100,000       150,000      150,000      150,000      150,000      136,410
Total Cost           1,798,316    2,212,748     2,928,544    2,928,940    4,863,374    1,760,268    2,669,423



Comparing the Scenario and Current Cost
A combined analysis of the cost under the various scenarios described above is provided
in the summary table 5.12. It is clear from the table that average and total costs for the
RHF do not vary very much between the two scenarios. However, compared to the
current cost of about KShs. 3.16 billion for all RHF, the cost increases by about 260%

                                              Page 88 of 120
under either of the two scenario, to KShs. 11.234 billion (scenario 1) and KShs. 11.395
billion (scenario 2).


Table 5.12: Summary Analysis of the Scenarios
 Cost Category         Current Cost      Ideal Costs Based                  Ideal Costs Based        Ideal Costs Based
                                         on Current                         on Increased             on increased
                                         Utilisation                        Utilisation              Utilisation

                                                                            Scenario 1               Scenario 2

                            (Kshs. million)         (Kshs. million)         (Kshs. million)          (Kshs. million)
                                 HC         Disp        HC          Disp         HC         Disp          HC         Disp
Personnel                       1.34        0.39         3.5      0.649        2.677        0.78          3.5      0.649

Consumables                    1.374         0.69        6.4        0.913     12.785         1.826     12.785     1.826
Others                         0.277        0.119       0.31         0.19       0.31          0.19       0.31       0.19


Total (Sample Facilities)      2.991        1.199      10.21        1.752     15.772         2.796     16.595     2.665

Total (All Facilities)      1,316.04   1,841.66     4,492.40   2,691.07     6,939.68   4,294.66      7,301.80   4,093.44
Total (Dispensaries +
Health Centres)                  3,157.70                7,183.47                11,234.34                11,395.24
% Increase in
Requirements                                             127.49%                 255.78%                  260.87%




5.8 Conclusion

In order to improve the services provided by RHF there is a need to address the supply of
key inputs including staff, drugs and other medical supplies more effectively. In particular,
the whole supply chain of drugs and medical supplies needs to be looked at critically. It is
not enough just to supply more kits to address the mismatch in resource allocation. What
is needed is a thorough analysis and costing of specific drugs and other inputs required in
provision of different services.

Based on resource allocation pattern observed for the 2004 calendar year, the average
annual cost per RHF in the six sample districts amounts to K Shs. 3 million per Health
Centre and KShs. 1.2 million per dispensary. However, the average resource requirement
(ideal) per RHF based on current service utilisation is KShs. 10.211 million for health
centres and about KShs. 1.76 million for dispensaries. At national scale, this would
require KShs 4.493 billion for health centres and KShs. 2.698 billion for dispensaries. The
total annual resource requirement for the ideal service provision for all RHF is therefore
KShs. 7.2 billion. This means that to adequately provide quality health services in RHF at
current utilisation levels an increase of 128 per cent in resource allocation is required.

Such improvement in quality of health services at RHF would result in increased demand
by up to 100 per cent. This would further require additional resources [meaning either (1)
doubling existing staffing levels accompanied by increased input of consumables as per

                                                    Page 89 of 120
need or (2) applying staffing norms coupled with increased input of consumables as per
need]. Either of these two options would require an increase in resources by about 260
per cent, to K Shs. 11.24 billion (scenario 1) and K Shs. 11.406 billion (scenario 2).

Since this study could not look at each service and related inputs in detail, more work is
needed in this area. Furthermore as treatment policy changes, for example in relation to
malaria, and as new interventions are introduced at RHF (e.g. ART) the costing has to be
reviewed. This study however provides a framework for cost analysis focusing on inputs
necessary under each intervention, even when there is a change in treatment guidelines
and unit cost of inputs. Further work will however be required on equipment and physical
infrastructure. This is an area where this study could not exhaustively handle.




                                     Page 90 of 120
    Annex 1: Guidelines on Facility Norms and Standards

Facility Type              Available Services                   Physical Facilities       Staffing Norms
Dispensary                 Basic Curative outpatient            3 Rooms providing         2 ECN
Type 1                     services. Basic environmental        consultation,             1 PHT
                           health services                      treatment and PHT         2 General Staff
                                                                office                    1 Watchman
Dispensary                 Basic Curative outpatient            4-6 Rooms including       3-5 ECN
Type 2                     services. Integrated MCH and         a waiting area. The       1 PHT
                           FP. Environmental health             plan should include a     2-4 General Staff
                           services.                            modest area for MCH       1 Watchman
                                                                services
Health Centre              Curative outpatient services.        3 Consultation            2 Clinical officers
Type 1                     MCH and FP. Maternity care.          rooms.                    8 ECN
                           Limited oral health services.        1 Treatment room.         1 PHO
                           Minor surgery. 12 hour               1 Minor theatre.          1 PHT
                           observation for severely ill         1 Labour Ward for         1 Lab Technician
                                                                two and delivery          2 FHFE
                                                                room                      1 CNT
                                                                                          1 Pharm.Tech.
                                                                                          1 Statistical Clerk
                                                                                          1 Clerk/Cashier
                                                                                          3 Patient Attendants
                                                                                          5 General Attendants
                                                                                          1 Driver
                                                                                          2 Cooks
                                                                                          2 Watchmen
Health Centre              Curative outpatient services.        3 Consultation            2 Clinical officers
Type 2                     MCH and FP. Maternity care.          rooms.                    1 KRCN
                           Limited oral health services.        1 Treatment room.         12 ECN
                           Minor surgery. 12 hour               1 Minor theatre.          1 PHT
                           observation for severely ill         1 Labour Ward for         1 Lab Technician
                                                                two and delivery          2 FHFE
                                                                room                      1 CNT
                                                                Holding Cold room         1 Pharm.Tech.
                                                                for two bodies in         2 Statistical Clerk
                                                                event of death            1 Clerk/Cashier
                                                                                          6 Patient Attendants
                                                                                          8 General Attendants
                                                                                          2 Driver
                                                                                          2 Cooks
                                                                                          2 Watchmen

    Workload Norms

    The following are the proposed workload figures.

               A Clinical officer can examine/treat approximately 40 patients per day.

               A Nurse can examine/treat approximately 40 patients per day in a Dispensary or Health Centre.

    It should be noted that in World Bank studies, the number of patients a clinical/nursing officer can see in a
    day is between 70 and 120. For Kenya, a lower figure has been used as a norm for planning because of
    the existing practices-quality of care/diagnostic- and the communication problems in certain districts with a
    multi plural ethnic composition.




                                                     Page 91 of 120
    Annex 2: Health Financing Situation in Kenya

Overview of Health Financing in Kenya

Soon after independence in 1963, the Government was eager to fight disease and ill
health that was rampant across the country. The Government therefore embarked on
rapid expansion of public health sector through building of new facilities, expanding
existing facilities and extending public health services. Even where communities
organised themselves to construct facilities, the facilities were later taken over for
financing and allocation of resources by the Government. Even health facilities falling
under the Local Government outside of major urban centres were taken over by the
Central Government in early 1970s.

In areas where not-for-profit NGO/Mission facilities existed, the Government provided key
resources particularly personnel. The Government thus became the most important
provider of health services particularly in rural areas where the majority of Kenyans lived.
Over time, however, faith-based and private health facilities expanded to complement
public facilities.

The rapid expansion of the public health sector was made possible by the rapid economic
growth of 1960s and 70s when GDP growth rate often surpassed 6 per cent per annum.
Apart from domestic resources, the other major factor that facilitated the process was
easily available donor funds. By early 1980s, however, the heavy burden of sustaining the
expanded health infrastructure had begun to manifest itself through high demand for
recurrent resources, particularly wages and operating resources. By this time the
economic growth rates were far below those realised in the early years of independence.
To address the adverse macro-economic environment, pro-growth, economic structural
adjustments spearheaded by IMF and Bretton Woods institutions were implemented,
focusing on reduced public spending on social sectors and others that were not perceived
as being directly productive.

The policies adopted in mid-1980s therefore drastically changed the financing of the
health sector from heavy dependence on the Exchequer to more dependence on
household incomes. The proportion of Government Recurrent Expenditure channelled
through Ministry of Health dropped from about 9.3 per cent in 1980/81 to about 7.3 per
cent in 1988/89. This resulted in reduction in resource flows to the public health such that
between 1980/81 and 1989, when cost sharing was initiated, per capita public spending
dropped from a peak of US$9.82 to about US$6.2. Furthermore, in 1993/94 the per capita
Ministry of Health expenditure (including cost sharing expenditure) was at the lowest
(since the early 1980s) at US$3.619

However, despite the reduced flow of resources, the proportion of facilities managed
directly by the Government has remained relatively the same at over 50 per cent of the
facilities. This led to serious under-financing of health facilities particularly in relation to
operating resources. The emergence of the cost sharing programme as an important



9Mwangi, John Kamigwi 1996, Kenyan Health Expenditure with a Focus on: Preventive, Promotive and Primary Health Care –
Trends and Projections for the period 1979/80 to 1998/99

                                                   Page 92 of 120
source of finance has principally been created by the need to inject facilities with
operating resources that are seriously lacking.

The Government’s response to the twin challenge of declining resource flows and the
emergence of new challenges such as HIV/AIDS in 1980s and early 1990s was the
drawing up of a national health policy in 1994. The specific policy objectives focusing on
resource scarcity in the policy framework include:

          Ensuring Equitable Allocation of Government Resources to Reduce Disparities in
           Health Status.
           Increasing the cost-effectiveness and the cost-efficiency of resource allocation
           and use.
          Creating an enabling environment for increased private sector and community
           involvement in health service provision and finance.
          Increasing and diversify per capita financial flows to the health sector.

Under the ongoing public sector reforms, the Government is expected to increase its
allocation to health as a percentage of the total budget to 15%. It is also expected that
resource allocation across different regions and population groups will be equitably
distributed (focusing on level of relative needs) and that health interventions whose
implementation result maximum benefits to the greatest number of people would be given
priority (to promote efficiency). Furthermore the role of private sector would be enhanced.

The 1990s have thus seen a marked shift from heavy dependence on public resources to
more and more direct financing by households, through out-of-pocket payments. Fees for
service have become a major supplementary source of operating resources that
complements the recurrent funds provided by the Government.

National Health Accounts and Expenditure of HC and Dispensaries

By the financial year 1994/95, total health sector financing amounted to K Shs. 31 billion
(US$549 million) or 9 per cent of GNP.10 This translated to K Shs. 1,200 (US$ 21) per
capita. Out of this financial outlay households contributed 70 per cent, followed by the
Treasury with only 19 per cent. In terms of GNP, private sources of fund contributed 5.9
per cent.

The just concluded National Health Accounts study covering the 2001/02 financial year
shows that while total health expenditure increased in aggregate terms, compared to
1994/95, per capita expenditure (in US$ terms) declined slightly. In addition, there was a
decline relative to the GNP. This means that despite the growing challenges facing the
health sector, there were fewer dollars spent per person within the Kenyan health sector,
hence the need to carefully identify priority health interventions. In addition, over the
same time composition of the total health expenditure has also shifted significantly in
favour of public financing.

This study shows that the Kenyan health sector spent a total of K Shs. 47 billion (US$
598 million) in the financial year 2001/02. In per capita terms, this translates to K Shs.
1,506 (US$19.2) per Kenyan. As a proportion of GNP the total health expenditure

10   Kenya National Health Accounts for 1994/95 (Draft Report)

                                              Page 93 of 120
amounted to 5.2 per cent. Of this expenditure 60% was channelled through public health
providers (hospitals, health centres and dispensaries) irrespective of source of funds.
This underlines the critical role the public health sector plays in Kenya. It is however
important to note that the public resources account for only 30% while household
contributed 51% of the total health sector resources.

This means that the health seeking behaviour of individual members of households (what
services they seek and where) is a key determinant of overall efficiency and effectiveness
within the sector. Furthermore, the high proportion of resources coming directly from
household particularly in the form of out-of-pocket payments (45% of total health
expenditure) complicates matters in relation to ensuring access to services, given that
over 50 per cent of Kenyans live below the poverty line. To ensure universal access to
health services, the Government is thus looking at how to go about harnessing the large
household outlay to finance the proposed National Social Insurance Scheme.

Since the 1980s, a long term health sector policy has been the shifting of more resources
to primary level services. These services include, all the services offered by health
centres and dispensaries. Historically, the hospitals have tended to absorb the lion’s
share of health sector resources. This has tended to deny primary level facilities the
resources they require to provide preventive and promotive services as well as prompt
primary level curative care that has been proved more cost effective. In the past, efforts
have thus been made to reduce and contain the proportion of public budget (especially
recurrent) going to tertiary facilities in favour of rural health services (health centre and
dispensary services). According to the above NHA study the share of expenditure under
public health centres and dispensaries in the financial year 2001/02 was only 10.1 per
cent.

To address the under financing of primary level services, the Ministry has in recent years
attempted to bring down the proportion of recurrent budget absorbed by Kenyatta
National Hospital from around a peak of 17 per cent in the 1990s to about 10 per cent.
Though some progress was made in early 2000s, over time there has been a reversal
such that in the current budget (FY 2004/05) KNH is absorbing 17 per cent of the budget.

The reduced public funding of the health sector that started in mid-1980s further affected
the composition of health budgets in favour of personnel. In 1994/95, for example,
personnel expenditure accounted for 70 per cent of MOH recurrent expenditure while
drugs accounted for only 9.9 per cent.11 Public sector reforms since the 1990s have
endeavoured to correct the imbalance between personnel costs and operations and
maintenance, through measures such as restricting employment and offloading
unnecessary staff.

The emergence of cost sharing and community funds as an important source of funds
particularly at health and dispensary level emanates largely from the scarcity of operating
resources at this level. Although the health sector has benefited from waiver of public
staff employment freeze for some technical cadres such as nurses and clinical officers,
staff shortage have led in utilisation of cost sharing funds in employment of laboratory
technicians, cleaners and watchmen at the local level. This goes against the original
intentions of the programme which was meant to supplement public O&M resources.

11   Republic of Kenya (1999), Ministry of Health, Budget Analysis Study

                                                         Page 94 of 120
What further affects the availability of operating resources at health centre and
dispensaries is the mode of allocating resources to that level. In general, recurrent and
development resources flow to that level only in kind, in the form of drug kits, loose drugs,
vaccines etc. This makes operations at that level very difficult where resource needs are
not fully met. Flexibility in reallocating resources from areas of surplus (e.g. over supply of
certain drugs) to areas of deficit (e.g. lack of non-pharmaceuticals) is required. In the
current system it is impossible and hence leads to wastage on one hand and shortages
on the other. This is particularly so where the facilities are not involved in the planning as
is the case with most of the supply sub-systems.

Apart from the support health centres and dispensaries get in kind (vaccines, drugs etc),
operations of these facilities is meant to be supported under Budget Head 335 of the
MOH Recurrent Budget. However, this same head also finances operations of DHMTs
(and possibly the DHMBs). As a result, in practice the funds tend to largely finance
operations at district level at the expense of primary level facilities.

The study findings show that there is no systematic way in which health centres and
dispensaries benefit from funds under Head 335 for their day-to-day operations. In some
cases, that budget tends to be utilised entirely in servicing the operations of the DHMT.
This has therefore led to a situation where cost sharing and community funds are the
most important source of operating resources at this lower level. They are used in
addressing shortfalls in critical resources such as important drugs, non-pharmaceuticals,
manpower for cleaning and security services. Any policy that reduces these funds has to
simultaneously address these operational issues if services are to be offered as
expected.

Government Policies in Relation to Financing and Essential Packages

The first attempt by the Health Sector to identify and prioritise health
intervention/packages was in the National Health Sector Strategic Plan for 1999 – 2004.
Six high priority (essential) packages were defined together with broad interventions to be
carried out under each essential package. The six essential packages include Malaria,
HIV/AIDS/TB, Reproductive Health, Immunisation, IMCI (Strategy for Child Health) and
Environment Related Communicable Disease.

The purpose of this effort was to determine the key interventions where the bulk of
resources were to be channelled at all levels: national, provincial, district, health centre
and dispensary, community and household level. The interventions were also costed
broadly, at national programme level. However, detailed costing of the specific
interventions for each level was not conducted. Efforts are however, being made to
redefine essential packages and their costs at each level for incorporation into the
National Health Sector Strategic Plan for 2005 to 2010. This particular study will
complement these efforts particularly in relation to health centres and dispensaries.




                                       Page 95 of 120
Annex 3: Background to User Fee Policy

Background

The basis for the implementation of cost sharing policy in Kenya was brought about by
the decline in Government health spending and decline in donor support. With increasing
budgetary pressure on Government, it was evident that the Government could not fully
support the health sector single-handedly. This led to seeking alternative mechanisms
such as cost sharing and the following factors were considered for the development of
cost sharing:

(1)      Limited public funds relative to the demand for development and recurrent
         expenditures;
(2)      Certain sections and members of society who can afford services provided by
         public sector were encouraged to do so;
(3)      Efficiency in the provision of public services was expected to be enhanced where
         society pays for such services;
(4)      Certain needs of services are better met through cost sharing and
(5)      Allocation and reallocation of resources were expected to be effected more
         efficiently through cost sharing.

The implementation of cost-sharing in health sector started in 1989 through a Cabinet
paper. The main objective of cost-sharing program was to increase revenue from user
fees to augment the financing of the under-funded non-wage recurrent expenditure items
and to improve the access by the poor to health services. Specifically, cost sharing was
aimed at improving effectiveness and efficiency of health programmes, generate more
revenue for health sector, improve the quality of health care and improve equity in health
delivery system.

The policy objectives stated above were supported by the following guiding principles:-

       Provision of collection incentives to ensure the availability of the extra funds;

       Funds collected were to be additive to the normal government allocation and the
        unspent funds to be carried forward to the next financial year;

       Funds collected were to be retained locally at the point of collection;

       Funds collected were to be used only in areas of critical need like supplies and
        maintenance and not for capital works or staff allowances;

       Fees were to be graduated between different levels of facilities with dispensaries
        to remain free to encourage people to use them;

       Public health services such as vaccination were to remain free to encourage
        people to use them;




                                         Page 96 of 120
    Exemption and discretionary waiving procedures were to be put in place to protect
     those who could not afford to pay the fees. (Collins et al. 1996:53-54; Quick and
     Musau, 1994:1)


Implementation Experiences

The Implementation of the programme ran into problems shortly after its commencement.
The complaints included claims that the programme had not led to any improvement in
the quality of services and that the poor were being denied services due to their inability
to afford fees. An evaluation was done in 1995/96 and the following problems were
identified during the early implementation of the programme.

    The fee waiving procedures although reasonably well designed did not work
     properly because it was not well understood by either patients or health workers;

    The existing government accounting system turned out to be inadequate for
     control and management purposes;

    There were slow preparation and approval of expenditure plans for utilization of
     funds collected leading to delays in making necessary purchase for improvement
     in the quality of care;

    There was lack of collaboration with the district treasury in releasing of funds
     leading to delays in utilisation of funds to improve quality of service;

    There was no proper record keeping making it impossible to monitor the progress
     of the programme;

    The fees’ structure became inconsistent with patients’ expectations as prescribed
     drugs were sometime unavailable yet patients had already paid the registration
     fees;

    The programme lacked support from health workers because they had not been
     involved in its design;

    There was lack of proper guidance to health workers implementing the
     programme.

The problems were caused by lack of awareness campaigns to educate the public; health
workers were not adequately oriented or trained to enable them implement and enforce
the programme; and appropriate systems were not in place to control revenues and
expenditures.

As a result of the problems encountered during the initial stages of implementation, the
government suspended outpatient fees in September 1990. However, a number of
changes and improvements were made based on the lessons learnt from the initial
implementation and the second phase was introduced in early 1991.



                                      Page 97 of 120
Annex 4: District Allocation Budget for Financial Year 2003 – 2004: Vote R11 335
113 Rural Health Services: 335 Rural Health Centres and Dispensaries
                                                   Isiolo        Kakamega              Kilifi       Meru South        Narok        Uasin Gishu
80     Passage and Leave Expense                   16,421.00           40,123.00      39,935.00       17,168.00       35,830.00       27,619.00
100    Transport operation Expenses               180,943.00       442,077.00        440,020.00      189,168.00      394,785.00      304,313.00
110    Travelling and Accommodation                54,173.00       132,354.00        131,739.00       56,635.00      118,196.00       91,110.00
120    Postal and telegram expenses                 8,351.00           20,403.00      20,309.00         8,731.00      18,221.00       14,045.00
121    Telephone                                   27,776.00           67,861.00      67,549.00       29,039.00       60,602.00       46,714.00
140    Electricity                                290,169.00       708,936.00        705,639.00      305,359.00      633,097.00      488,012.00
141    Water                                       85,102.00       207,905.00        206,905.00       88,902.00      185,604.00      143,103.00
143    Fuel/Gas                                    32,322.00           78,969.00      78,602.00       33,792.00       70,521.00       54,360.00
151    Purchase of Drugs                       10,047,933.00    24,548,944.00      24,434,763.00   10,504,657.00   21,922,776.00   16,898,804.00
155    Purchase of x-ray supplies                   5,567.00           13,601.00      13,538.00         5,819.00      12,146.00         9,362.00
156    Oxygen                                      73,215.00       178,877.00        178,045.00       76,543.00      159,741.00      123,133.00
158    Dressings & Non Pharmaceuticals             28,338.00        69,235.00         68,914.00       29,627.00       61,830.00       47,659.00
160    Food and Rations                           284,963.00       696,215.00        692,979.00      297,916.00      621,736.00      479,256.00
170    Purchase of consumables                     12,525.00           30,603.00      30,460.00       13,095.00       27,329.00       21,066.00
172    Uniforms and Clothing                       10,015.00           24,469.00      24,355.00       10,470.00       21,850.00       16,843.00
174    Stationary                                  13,829.00           33,785.00      33,628.00       14,457.00       30,172.00       23,257.00
177    Printing of Medical Records                  1,337.00            3,265.00        3,249.00        1,397.00        2,917.00        2,248.00
178    Purchase of hospital linen                  52,068.00       127,150.00        126,580.00       54,435.00      113,522.00       87,487.00
179    Uniforms and Clothing (Patients)            74,708.00       182,526.00        181,678.00       78,103.00      162,999.00      125,647.00
182    Rates and Rentals                              139.00             340.00           338.00         145.00          303.00          234.00
190    Miscellaneous Other                            140.00             342.00           340.00         146.00          305.00          235.00
220    Purchase of Plant, Machinery & Equip         7,810.00           19,081.00      18,992.00         8,164.00      17,040.00       13,135.00
250    Maintenance of Plant and Equipment          10,019.00           24,479.00      24,366.00       10,475.00       21,860.00       16,851.00
260    Maintenance of Building and Stores          72,961.00       178,258.00        177,429.00       76,278.00      159,189.00      122,709.00
                                               11,390,824.00    27,829,798.00      27,700,352.00   11,910,521.00   24,852,571.00   19,157,202.00
Less: Amounts procured centrally
140    Electricity                                290,169.00       708,936.00        705,639.00      305,359.00      633,097.00      488,012.00
151    Purchase of Drugs                       10,047,933.00    24,548,944.00      24,434,763.00   10,504,657.00   21,922,776.00   16,898,804.00
155    Purchase of x-ray supplies                   5,567.00           13,601.00      13,538.00         5,819.00      12,146.00         9,362.00
158    Dressings & Non Pharmaceuticals             28,338.00           69,235.00      68,914.00       29,627.00       61,830.00       47,659.00
177    Printing of Medical Records                  1,337.00            3,265.00        3,249.00        1,397.00        2,917.00        2,248.00
178    Purchase of hospital linen                  52,068.00       127,150.00        126,580.00       54,435.00      113,522.00       87,487.00
179    Uniforms and Clothing (Patients)            74,708.00       182,526.00        181,678.00       78,103.00      162,999.00      125,647.00
220    Purchase of Plant, Machinery & Equip         7,810.00           19,081.00      18,992.00         8,164.00      17,040.00       13,135.00
                                               10,507,930.00    25,672,738.00      25,553,353.00   10,987,561.00   22,926,327.00   17,672,354.00

       Total Allocation per district through
       DMOH                                       882,894.00     2,157,060.00       2,146,999.00     922,960.00     1,926,244.00    1,484,848.00


       Health Centres                                2                  12               5              2               9               15
       Dispensaries                                 13                  12              21              11              17              36
       Total Rural Health Facilities                15                  24              26              13              26              51


       Average Allocation per Facility           58,859.60        89,877.50         82,576.88       70,996.92       74,086.31       29,114.67




                                                                  Page 98 of 120
Annex 5: Detailed Analysis of Financial Requirements for Human Resources

As reflected in the MoH recurrent Appropriation Accounts, personnel costs account for
approximately 52% of total public health spending. No costing exercise would, therefore,
be complete without a critical assessment of the Human Resource element

Using data from the Human Resource Mapping exercise current staffing levels were
compared to those implied by Government staffing norms. It is recognised that these
norms have shortcomings and are subject to debate. But they are it present the best
benchmark for analysis. However, it is recommended that MoH review these norms in
the light of changing needs, the inclusion of new services and likelihood of
available resources. The team have developed a spreadsheet model which would allow
the financial impact of different assumptions about staff levels to be tested

The overall picture - as shown in the chart below – suggests that dispensaries are
relatively well of in human resource terms compared to health centres though both need
at least a doubling of funding to achieve the current norms. Furthermore, the shortfalls for
dispensaries are concentrated more in support staffing cadres in contrast to health
centres where health and administration staff are more of a problem. These issues are
looked into in more detail in the following sections. Issues of who should pay and whether
some of the shortfalls could be covered through reallocating existing staff are also
explored.

The chart below depicts the overall picture in health centres and dispensaries comparing
current expenditure with the shortfall (making the distinction between health
workers/administrative staff and support staff for the latter

                        Financial Shortfall: Reach Staffing Norms by Type of Facility and
                                                     Staffing
                                             Total Shortfall 1,774 m Shs annually
                              1,082 m Shs for Health Centres: 39% of requirements currently met
                                 692 m Shs Dispensaries: 46% of requirements currently met
               1,800


               1,600
                                                                                                  Shortfall (Support
                                                                                                  Staff)
               1,400


               1,200
                                                                                                  Shortfall (Health
               1,000                                                                              and Administration )
       m Shs




                800

                                                                                                  Current Expenditure
                600


                400


                200


                  0
                              Health Centres                              Dispensaries




                 The chart below illustrates the shortfall by cadre and by type of facility

                                                   Page 99 of 120
                                        Comparison of Current Expenditure on Staff with Requirements
                                                             to Achieve Norms
                                                                                                                                                                                                                                                                                                         Shortfall
               600
                                                                                                                                                                                                                                                                                                         Current Expenditure

               500



               400
       M Shs




               300



               200



               100



                 0




                                                                                                                                                                                                                                       Community Nutritional
                                                                                Laboratory Technician




                                                                                                                                                  Patient Attendant



                                                                                                                                                                       General Attendant




                                                                                                                                                                                                                                                                                                                          Patient Attendant
                                                                                                                                                                                                                      Pharmaceutical




                                                                                                                                                                                                                                                                                                                                              General Attendant
                                          Total Nursing Cadre




                                                                                                        Family Health Field




                                                                                                                                                                                                                                                                               Total Nursing Cadre
                                                                Public Health




                                                                                                                                                                                                                                                                                                     Public Health
                                                                                                                                                                                                                                                               Clerk/Cashier




                                                                                                                                                                                                                                                                                                                                                                  Watchman
                                                                                                                              Statistical Clerk




                                                                                                                                                                                                           Watchmen
                                                                                                                                                                                           Driver



                                                                                                                                                                                                    Cook
                     Clinical Officer




                                                                                                                                                                                                                                                                                                      Technician
                                                                                                                                                                                                                        technician



                                                                                                                                                                                                                                          Technologist
                                                                                                            Educator




                                                                                                                                                  Health Centres                                                                                                                                                     Dispensaries




This review focuses on the financial implications of meeting staffing norms. It is clear,
however, that availability of funds is only one of the issues which prevent the norms being
achieved. In some areas there are staff shortages and given the lead time required to
train staff such shortages may continue for some time to come even if funding were
available.

1. Costs of Achieving the Staffing Norms in Dispensaries

Regional Breakdown

The figure below graphically depicts the financial shortfall in dispensaries by province.
Generally, current salary expenditure is between 40-50% of what would be required to
achieve the norms though it is below 30% in North Eastern and almost 90% in Nairobi




                                                                                                                                                                      Page 100 of 120
                Financial Shortfalls: Achieving Staffing Norms in Dispensaries
                                          by Province
     100%




                                                                                                              Shortfall: Support
         80%
                                                                                                              Staff



         60%                                                                                                  Shortfall: Health
                                                                                                              and Administration
 %




         40%                                                                                                  Current



         20%




         0%
               Central   Coastal   Eastern   Nairobi      North    Nyanza Rift Valley Western   National
                                                         Eastern




Cadre Wise Breakdown

The table below shows the cost of achieving the staffing norms in dispensaries according
to two scenarios.

          Scenario 1: by bringing all dispensaries that are below the norm up to the norm
           and leave the facilities that have staff above the norms as they are.
          Scenario 2: by redistributing all staff in facilities where levels are above the norms.

Shortfalls for support staff are high as these posts have traditionally been filled using
community funds. The shortfall ranges from K Shs 595m under scenario 1 to K Shs 469m
under scenario 2 (some 112% and 88%of current spending respectively).

Financial Shortfalls against Current Staffing Norms by Cadre


                                      Total              Public
                                     Nursing             Health          Patient          General                         Total Annual
                                      Cadre            Technician       Attendant        Attendant         Watchman          Outlay
National Staff Shortfall
per staffing norms                    -811                -852            -1,455           -1,455            -1,455                -
Current Annual Staff
Salaries                           330,847,380         127,205,100                      74,148,420                        532,200,900
Total Requirement as
per staff Norms                    435,801,557         235,475,575     127,374,204      201,522,624        127,374,204   1,127,548,165
Shortfall (Scenario 1)             104,954,177         108,270,475     127,374,204      127,374,204        127,374,204    595,347,265
Shortfall (if excess can
be redistributed)
(Scenario 2)                       47,753,503          45,875,166      126,727,138      121,401,537        127,374,204    469,131,549

Percentage increase
(Scenario 1)                          32%                 85%                -             172%                 -             112%
Percentage increase
(Scenario 2)                          14%                 36%                              164%                                88%




                                                                   Page 101 of 120
          A more detailed cadre wise breakdown of the shortfall is shown in the table below

                  Comparison of Current Staffing to Norms per Province in Dispensaries


                                                 Enrolled                      Public
                                                 Clinical         Registered   Health       Patient     General
            DISPENSARIES                         Nurse            Nurse        technician   Attendant   Attendant   Watchman    Others

Staffing Norms in Dispensaries                                             2                       1           1           1             1

Central       Actual Staff Numbers                      454               30         158                                           155

              No. of Staff in facilities                    83            22          61           0           0           0       155
              above Norms
              No. of Staff in facilities below              -55            0        -107        -199        -199         -199            0
              Norms
              Net Excess/Shortfall per                      28            22          -46       -199        -199         -199      155
              province
Coast         Actual Staff Numbers                      166                8          84                                            36

              No. of Staff in facilities                    11             8          17           0           0           0        36
              above Norms
              No. of Staff in facilities below          -125               0          -73       -140        -140         -140            0
              Norms
              Net Excess/Shortfall per                  -114               8          -56       -140        -140         -140       36
              province
Eastern       Actual Staff Numbers                      515               38         173                                           161

              No. of Staff in facilities                112               38         172           -1          -1          -1      161
              above Norms
              No. of Staff in facilities below          -211               0        -211        -307        -307         -307            0
              Norms
              Net Excess/Shortfall per                      -99           38          -39       -308        -308         -308      161
              province
Nairobi       Actual Staff Numbers                          66            18          56                                            56

              No. of Staff in facilities                    52            18          53           0           0           0        56
              above Norms
              No. of Staff in facilities below               -2            0           -5          -8          -8          -8            0
              Norms
              Net Excess/Shortfall per                      50            18          48           -8          -8          -8       56
              province
North
                                                            25             9          16                                                 8
Eastern       Actual Staff Numbers
              No. of Staff in facilities                     0             9            1          0           0           0             8
              above Norms
              No. of Staff in facilities below              -49            0          -22         -37         -37         -37            0
              Norms
              Net Excess/Shortfall per                      -49            9          -21         -37         -37         -37            8
              province
Nyanza        Actual Staff Numbers                      251               24          98                                           146

              No. of Staff in facilities                    15            24          34           0           0           0       146
              above Norms
              No. of Staff in facilities below          -118               0        -113        -177        -177         -177            0
              Norms
              Net Excess/Shortfall per                  -103              24          -79       -177        -177         -177      146
              province




                                                                  Page 102 of 120
Rift Valley        Actual Staff Numbers                                                                           688             47              371                                            214

                   No. of Staff in facilities                                                                      83             47              130              0         0              0    214
                   above Norms
                   No. of Staff in facilities below                                                              -411                 0          -267          -507       -507        -507        0
                   Norms
                   Net Excess/Shortfall per                                                                      -328             47             -137          -507       -507        -507       214
                   province
Western            Actual Staff Numbers                                                                           195             13               45                                            27

                   No. of Staff in facilities                                                                      86             13               23              6        48              -2   27
                   above Norms
                   No. of Staff in facilities below                                                               -19                 0           -54            -80       -80         -80        0
                   Norms
                   Net Excess/Shortfall per                                                                        67             13              -31            -74       -32         -82       27
                   province
National           Actual Staff Numbers                                                                         2,360           187            1,001               0         0              0    803
                   No. of Staff in facilities                                                                     442           179               491              5        47              -3   803
                   above Norms
                   No. of Staff in facilities below                                                              -990                 0          -852        -1,455     -1,455      -1,455        0
                   Norms
                   Net Excess/Shortfall per                                                                      -548           179              -361        -1,450     -1,408      -1,458       803
                   province




           Current Workload Levels

           The charts below show that currently average workload is of the order of 18.9 patients12 –
           although there is significant variation between facilities, between districts and between
           provinces. Average workload is well above 20 in coastal and Nyanza provinces but below
           10 in Nairobi. This suggests that it might be feasible, on average, to double workload and
           still remain within the current workload norms of 40 patients per health worker though this
           would be exceeded in a number of districts.

                                                                                                    Average Staff Workload in Dispensaries by Province
                                                                                     30
                        Worlkload per staff (nurses and public health technicians)




                                                                                     25




                                                                                     20




                                                                                     15




                                                                                     10




                                                                                     5




                                                                                     0
                                                                                          Central     Coast    Eastern      Nairobi       North Eastern   Rift Valley   Nyanza   W estern




           12
                based on a simple average of district averages

                                                                                                                         Page 103 of 120
                                                                                                           Workload per Staff Member by in Dispensaries by District
       50


       45


       40


       35


       30


       25


       20


       15


       10


           5


           0
                                                                                                                                            Taita Taveta

                                                                                                                                                           Tana River




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Lugari/Malava
                                                         Murang'a




                                                                                        Thika




                                                                                                                                                                               Isiolo




                                                                                                                                                                                                                                                                                                                                        Ijara




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        Turkana




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    Teso
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Trans Mara
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          Trans/Nzoia
                                                                                                Kilifi




                                                                                                                                                                                                                                                                                                    Tharaka/Nithi
                          Kiambu


                                               Maragua




                                                                                                         Kwale
                                                                                                                 Lamu




                                                                                                                                                                        Embu




                                                                                                                                                                                                                                Mbeere




                                                                                                                                                                                                                                                                                  Moyale




                                                                                                                                                                                                                                                                                                                              Garissa


                                                                                                                                                                                                                                                                                                                                                Mandera


                                                                                                                                                                                                                                                                                                                                                                  Bondo
                                                                                                                                                                                                                                                                                                                                                                          Gucha




                                                                                                                                                                                                                                                                                                                                                                                                             Kisumu
                                                                                                                                                                                                                                                                                                                                                                                                                      Kuria


                                                                                                                                                                                                                                                                                                                                                                                                                                       Nyamira
                                                                                                                                                                                                                                                                                                                                                                                                                                                 Nyando


                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Siaya
                                                                                                                                                                                                                                                                                                                                                                                                                                                                              Suba
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Baringo




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Kajiado
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         Kericho
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Keyio


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      Laikipia


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            Nakuru




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Samburu




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Busia




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          M Elgon


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Vihiga
                                   Kirinyaga




                                                                    Nyandarua




                                                                                                                                  Mombasa




                                                                                                                                                                                                                                                        Meru North
                                                                                                                                                                                                                                                                     Meru South




                                                                                                                                                                                                                                                                                                                                                                                                                                                          Rachuonyo




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Nandi South




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  Uasin Gishu


                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             Bungoma




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Kakamega
                                                                                Nyeri




                                                                                                                        Malindi




                                                                                                                                                                                        Kitui


                                                                                                                                                                                                           Makueni




                                                                                                                                                                                                                                                                                           Mwingi


                                                                                                                                                                                                                                                                                                                    Nairobi




                                                                                                                                                                                                                                                                                                                                                                                                                              Migori




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     Nandi
                                                                                                                                                                                                                                         Meru Central




                                                                                                                                                                                                                                                                                                                                                                                             Kisii Central
                                                                                                                                                                                                                     Marsabit




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Bomet
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       Buret




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 Marakwet




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Narok
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           Koibatek
                                                                                                                                                                                                Machakos




                                                                                                                                                                                                                                                                                                                                                                                  Homa Bay
                                                                                                                                                                                                                                                                                                                                                          Wajir




                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               Butere/Mumias
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                West Pokot
Interestingly, although total workload increases with the number of staff average workload
per health worker appears to decline the higher the number of workers. This may be due
in part to the fact that the addition of an extra staff member will automatically bring down
the average workload (indivisibility of inputs)


                                                                                Association between Number of Staff and Average Workload by
                                                                                                  in Dispensaries by District
                          50

                          45

                          40

                          35
       average workload




                          30

                          25

                          20

                          15

                          10

                             5

                             0
                                               0                                                                                                                               50                                                                                                                                             100                                                                                                                                     150                                                                                                                     200                                                                                                                                                                   250
                                                                                                                                                                                                                                                                                  number of nurses and public health technicians




                                                                                                                                                                                                                                                                                                                    Page 104 of 120
2. Costs of Achieving the Staffing Norms in Health Centres

Similar analyses were carried out for health centres

Regional Breakdown

On average, health centres are only currently receiving 30-40% of the resources needed
to meet the staffing norms though again there is wide variation – less than 20% in North
Eastern and around 50% in Nairobi
                  Financial Shortfall: Achieving Staffing Norms in Health Centres
                                             by Province
           100%


           90%


           80%


           70%                                                                                                  Shortfall Support
                                                                                                                Staff
           60%
       %




           50%
                                                                                                                Shortfall Health
           40%                                                                                                  and Administration

           30%


           20%
                                                                                                                Current
                                                                                                                Expenditure
           10%


            0%
                  Central   Coastal   Eastern   Nairobi    North    Nyanza   Rift Valley   Western   National
                                                          Eastern




Table below shows the staff mapping for Health Centres. Again this can only be used as
a tool to assist the human resource planners decide on the most necessary requirements.
The staff mapping raises questions of redistribution of personnel in providing this
resource in the priority areas and cadres. For example, we note that at the national level,
we have an excess of Public health technicians. If the services that the PHT’s provide
are not a core function and a priority, then it would be prudent to retrain this cadre and
then re-assign them to higher priority area/cadre, instead of hiring new nurses.

A similar picture emerges as for dispensaries with significant variations.

Cadre Wise Breakdown




                                                          Page 105 of 120
Comparison of Current Staffing to Norms per Province in Health Centres

                                                                                              Laborat   Family                                                             Pharma     Community
                                                   Enrolled   Regist   Public    Public       ory       Health     Statisti   Patient                                      ceutical   Nutritional
                                        Clinical   Clinical   ered     Health    Health       Techni    Field      cal        Attenda   General                     Watc   technici   Technologi    Clerk/C   Administr
                                        Officer    Nurse      Nurse    Officer   Technician   cian      Educator   Clerk      nt        Attendant   Driver   Cook   hmen   an         st            ashier    ation       Others
Staffing Norms in Health Centres               2         8                  1            1         1           2          1         3           5       1       2      2          1            1         1
Central       Current Staff Numbers          42       377        60                   176                                                                                         1           69                    47      169
              No. of Staff in
                                               3        52       60         0         125          0           0          0         0           0       0       0      0          0           27         0          47      169
              Facilities above Norms
              No. of Staff in                                                                                                                                  -      -
                                            -82      -137         0      -57           -21       -57       -114        -57      -171        -285      -57                      -57           -19       -57           0         0
              Facilities below Norms                                                                                                                         114    114
              Net Excess/Shortfall in                                                                                                                          -      -
                                            -79        -85       60      -57          104        -57       -114        -57      -171        -285      -57                      -57             8       -57          47      169
              province                                                                                                                                       114    114
Coast         Current Staff Numbers          20       108        33                     71                                                                                        1           33                    17       21
              No. of Staff in
                                               0         7       31         0           40         0           0          0         0           0       0       0      0          0            9         0          17       21
              Facilities above Norms
              No. of Staff in
                                            -42      -152         0      -30            -6       -30        -60        -30        -90       -150      -30     -60    -60       -29             -9      -30           0         0
              Facilities below Norms
              Net Excess/Shortfall in
                                            -42      -145        31      -30            34       -30        -60        -30        -90       -150      -30     -60    -60       -29             0       -30          17       21
              province
Eastern       Current Staff Numbers          35       198        45                   101                                                                                         0           41                    31       76
              No. of Staff in
                                               0        14       43         0           60         0           0          0         0           0       0       0      0          0            9         0          31       76
              Facilities above Norms
              No. of Staff in                                                                                                                                  -      -
                                            -73      -248         0      -53           -15       -53       -106        -53      -159        -265      -53                      -53           -23       -53           0         0
              Facilities below Norms                                                                                                                         106    106
              Net Excess/Shortfall in                                                                                                                          -      -
                                            -73      -234        43      -53            45       -53       -106        -53      -159        -265      -53                      -53           -14       -53          31       76
              province                                                                                                                                       106    106
Nairobi       Current Staff Numbers          10         52       11                      9                                                                                        5            9                     0       17
              No. of Staff in
                                               1        18        9         0            6         0           0          0         0           0       0       0      0          2            4         0           0       17
              Facilities above Norms
              No. of Staff in
                                              -4       -16        0        -6           -3        -6        -12         -6        -18        -30       -6     -12    -12         -3            -2       -6           0         0
              Facilities below Norms
              Net Excess/Shortfall in
                                              -3         2        9        -6            3        -6        -12         -6        -18        -30       -6     -12    -12         -1            2        -6           0       17
              province




                                                                                         Page 106 of 120
North
           Current Staff Numbers       3        9     2            8                                                                1      3            3     2
Eastern
           No. of Staff in
                                       0        0     2      0     2      0      0      0        0        0      0     0     0      0      0      0     3     2
           Facilities above Norms
           No. of Staff in
                                       -9     -39     0      -6    0      -6    -12     -6     -18      -30      -6   -12   -12     -5     -3     -6    0     0
           Facilities below Norms
           Net Excess/Shortfall in
                                       -9     -39     2      -6    2      -6    -12     -6     -18      -30      -6   -12   -12     -5     -3     -6    3     2
           province
Nyanza     Current Staff Numbers      38      219    34           124                                                               0     36           37    91
           No. of Staff in
                                       0        6    32      0    62      0      0      0        0        0      0     0     0      0      1      0    37    91
           Facilities above Norms
           No. of Staff in                                                                                              -     -
                                     -112    -392     0     -73   -20    -73   -146    -73    -219     -365     -73                -73    -41    -73    0     0
           Facilities below Norms                                                                                     146   146
           Net Excess/Shortfall in                                                                                      -     -
                                     -112    -386    32     -73   42     -73   -146    -73    -219     -365     -73                -73    -40    -73   37    91
           province                                                                                                   146   146
Rift
           Current Staff Numbers     114      558    117          387                                                               5    122           59    178
Valley
           No. of Staff in
                                      11       29    88      0    253     0      0      0        0        0      0     0     0      1     36      0    59    178
           Facilities above Norms
           No. of Staff in                                                                                              -     -
                                     -145    -502     0    -117   -13   -117   -234   -117    -351     -585    -117               -116    -48   -117    0     0
           Facilities below Norms                                                                                     234   234
           Net Excess/Shortfall in                                                                                      -     -
                                     -134    -473    88    -117   240   -117   -234   -117    -351     -585    -117               -115    -12   -117   59    178
           province                                                                                                   234   234
Western    Current Staff Numbers      35      336    51           103                                                               0     36           19    86
           No. of Staff in
                                       0       18    50      0    61      0      0      0        0        0      0     0     0      0     10      0    19    86
           Facilities above Norms
           No. of Staff in                                                                                              -     -
                                      -79    -147     0     -57   -15    -57   -114    -57    -171     -285     -57                -57    -31    -57    0     0
           Facilities below Norms                                                                                     114   114
           Net Excess/Shortfall in                                                                                      -     -
                                      -79    -129    50     -57   46     -57   -114    -57    -171     -285     -57                -57    -21    -57   19    86
           province                                                                                                   114   114
National   Current Staff Numbers     297    1,857    353          979                                                              13    349           213   640
           No. of Staff in
                                      15      144    315     0    609     0      0      0        0        0      0     0     0      3     96      0    213   640
           Facilities above Norms
           No. of Staff in                                                                                              -     -
                                     -546   -1,633    0    -399   -93   -399   -798   -399   -1,197   -1,995   -399               -393   -176   -399    0     0
           Facilities below Norms                                                                                     798   798
           Net Excess/Shortfall in                                                                                      -     -
                                     -531   -1,489   315   -399   516   -399   -798   -399   -1,197   -1,995   -399               -390    -80   -399   213   640
           province                                                                                                   798   798




                                                                   Page 107 of 120
                                Additional Annual Cost of Staffing Health Centres according to the Norms


                                                                            Family
                                   Total                                    Health                                      Community
                    Clinical      Nursing                     Laboratory     Field      Statistical   Pharmaceutical    Nutritional     Clerk/
                    Officer        Cadre      Public Health   Technician   Educator       Clerk         technician     Technologist    Cashier       Others          Total
National Staff
Shortfall per
staffing norms       -546         -1633           -492          -399         -798          -399           -393            -176          -399         -4334
Current Annual
Staff Salaries    40,757,100    293,690,280   124,730,460         -            -             -          1,850,820      48,074,580     15,129,120   118,949,220   643,181,580
Total
Requirement as
per staff Norms   115,684,294   506,196,659   187,414,205     36,686,816   73,373,631   36,686,816     57,802,532      72,318,494     43,469,584   535,774,623   1,665,407,654
Shortfall         74,927,194    212,506,379   62,683,745      36,686,816   73,373,631   36,686,816     55,951,712      24,243,914     28,340,464   476,928,603   1,082,329,274
Shortfall (if
excess can be
redistributed)    72,868,755    152,775,560    14,906,500     36,686,816   73,373,631   36,686,816     55,524,600      11,019,961     28,340,464   416,825,403   869,195,504
Percentage
increase            184%           72%            50%                                                    3023%            50%           187%         712%           168%
Percentage
increase (if
excess can be
redistributed)      179%           52%           -12%                                                    3000%            23%           187%         112%           135%




                                                                                   Page 108 of 120
                                         average workload per nurse and clinical officer




                                                                                                                                                                            0
                                                                                                                                                                                2
                                                                                                                                                                                    4
                                                                                                                                                                                        6
                                                                                                                                                                                            8
                                                                                                                                                                                                10
                                                                                                                                                                                                     12
                                                                                                                                                                                                          14




                                0
                                     5
                                                  10
                                                               15
                                                                             20
                                                                                           25
                                                                                                30
                        Kiambu
                       Kirinyaga
                       Maragua




                                                                                                                                                                                                                                                                          realistic.
                       Murang'a
                     Nyandarua




                                                                                                                                                            Central
                           Nyeri
                           Thika
                            Kilifi
                          Kwale
                      Mombasa
                           Lamu
                         Malindi
                    Taita Taveta




                                                                                                                                                            Coast
                      Tana River
                          Embu
                           Isiolo
                            Kitui
                      Machakos
                        Makueni
                       Marsabit
                         Mbeere
                                                                                                                                                                                                                                                                                                                                                              Current Workload Levels




                    Meru Central
                     Meru North




                                                                                                                                                            Eastern
                     Meru South
                         Mwingi
                   Tharaka/Nithi
                         Nairobi
                        Garissa
                            Ijara
                       Mandera
                           Wajir




                                                                                                                                                            Nairobi
                          Bondo
                         Gucha
                      Homa Bay
                    Kisii Central
                        Kisumu
                           Kuria
                          Migori
                        Nyamira
                        Nyando




Page 109 of 120
                     Rachuonyo
                          Siaya




                                                                                                                                                            North Eastern
                           Suba
                        Baringo
                         Bomet
                                                                                                                                                                                                                             Province in Health Centres




                           Buret
                         Kajiado
                        Kericho
                          Keyio
                       Koibatek




                                                                                                                                                            Rift Valley
                        Laikipia
                      Marakwet
                         Nakuru
                          Nandi
                    Nandi South
                          Narok
                       Samburu




                                                                                                     Average Staff Workload in Health Centres by District
                     Trans Mara
                                                                                                                                                            Nyanza
                    Trans/Nzoia
                                                                                                                                                                                                               Average Daily Workload Per Nurse and Clinical Officer by




                        Turkana
                    Uasin Gishu
                                                                                                                                                                                                                                                                          4 in Nairobi and above 12 in Coastal region. This also suggests that




                    West Pokot
                       Bungoma
                          Busia
                  Butere/Mumias
                     Kakamega
                   Lugari/Malava
                        M Elgon
                                                                                                                                                            Western




                           Teso
                          Vihiga
                                                                                                                                                                                                                                                                          significant increases in utilisation should be possible if the existing norms are
                                                                                                                                                                                                                                                                          Again workload per health worker varies significantly averaging 9.8 but below
Again although workload increases with the number of staff the average
workload actually declined
                             Association between Staffing and Workload by District in Health
                                                        Centres
             600,000




             500,000




             400,000
 worldload




             300,000




             200,000




             100,000




                     0
                         0                    20        40           60                       80                      100       120        140               160                   180   200
                                                                                          number of nurses and clinical officers




It is also noticeable that the average workload for those facilities which have
staffing levels above the norm are considerably lower than those at or below
the norm

Potential for Reallocating Surplus Staff

There are a number of facilities where staffing levels exceed the norms –
especially for public health technicians and nursing cadres. This raises the
question as to whether redistribution of staff is feasible or desirable.
                               Number of Staff Below/Above Norms by Cadre and Type of
                                                       Facility
             1,800

             1,600                                                                                                                                           Surplus
             1,400
                                                                                                                                                             Shortfall
             1,200
 number




             1,000

              800

              600

              400

              200

                 0
                                                                                                                            Technologist
                              Total Nursing




                                                                                                                                             Total Nursing
                                                   Public Health




                                                                          Public Health




                                                                                                                                                                   Public Health
                                                                                                     Pharmaceutical




                                                                                                                             Community
                                                                           Technician




                                                                                                                             Nutritional




                                                                                                                                                                    technician
                                                                                                       technician
                                                     Officer
                                 Cadre




                                                                                                                                                Cadre




                                                                   Health Centres                                                                      Dispensaries




                                                                                     Page 110 of 120
Allocation in excess of the norms is supposed to ensure facilities with higher
workloads have more staff. The evidence collected on workload as part of the
Human Resources Mapping exercise, however, shows that for the 337 health
centres staffed at or below the norms the average staff workload is some 12.9
contacts in the 41 facilities where the norms are exceeds the workload is only
7.9 or 50% less. Whilst the provision of additional staff will no doubt account
for part of this reduction it does not appear, on the basis of this evidence, that
staff are allocated rationally. As such it is recommended that MOH review
the current approach to assigning staff to facilities in excess of the
norms when there are major shortfalls elsewhere

The chart below indicates that most of these excess staff are located in Rift
Valley and Central provinces


                                  Expenditure on Staff Above Staffing Norms
                                       in Health Centres by Province
                                                                                                        Others
         80                                                                                             Administration
                                                                                                        Clerk/Cashier
         70                                                                                             Community Nutritional Technologist
                                                                                                        Pharmaceutical technician
                                                                                                        Watchmen
         60
                                                                                                        Cook
                                                                                                        Driver
         50                                                                                             General Attendant
                                                                                                        Patient Attendant
 m Shs




         40                                                                                             Statistical Clerk
                                                                                                        Family Health Field Educator
                                                                                                        Laboratory Technician
         30
                                                                                                        Public Health Technician
                                                                                                        Public Health Officer
         20                                                                                             Registered Nurse
                                                                                                        Enrolled Clinical Nurse
         10                                                                                             Clinical Officer


          0
              Central   Coastal    Eastern   Nairobi   North Eastern   Nyanza   Rift Valley   Western




Conclusions and Key Findings

Staffing shortfalls are huge in relation to current staffing norms. For both
health centres and dispensaries salary expenditure would have to more than
double to meet the norms. This being the case, a policy framework needs to
be put in place to address the human resource issues. These findings should
assist the human resource planning department in the MOH to focus on areas
that are critical in providing health services and to help them determine
priorities. There is an urgent need to reassess the staffing norms in order to
reflect the realities on the ground and new health challenges posed since the
current norms were established.            It is further recommended that an
identification of intermediate targets i.e. essential staffing norms which need to
be met immediately are set.




                                                       Page 111 of 120
It would appear that based on current workload norms it should be possible in
many cases to increase utilisation without the need for additional staff
although there will be places where this is not possible. Whether this is
feasible is another matter. There is also a strong case for reviewing the
workload standards. If significant redistribution is possible the costs of
achieving the norms would be somewhat lower but still substantial

It is clear that staffing needs at health centres are more acute in terms of the
staffing norms. However, the poor are more likely to attend dispensaries.
Government clearly faces difficult choices over where additional staff should
placed

Cost sharing revenue can play a role in funding but if Government is serious
about moving towards the current norms, substantial MOH support will be
needed. This analysis sets out the overall cost of meeting the norms, but not
how they should be financed. To date, casuals have largely been employed
through cost sharing revenue. As we have seen the 10/20 policy and halving
of revenue is likely to prevent facilities doing this and the situation is only likely
to get worse. The estimated cost sharing revenue of 140m K Shs in 2003/4
(before the 10/20 policy reduced revenues) would have allowed facilities to
meet less than 20% of the estimated current shortfall required to ensure
staffing norms are achieved in health centres. Moreover, this would have
required for all the cost sharing revenues to have been put to this use (in 2004
only around a third of cost sharing revenues were spent on paying staff).




                                  Page 112 of 120
Annex 6: Methodology for Costing Analysis

1. Determining Level of Inputs and Cost

To derive the ideal cost levels at current utilisation levels, an analysis of
service utilisation patterns was carried out, coupled with an assessment of the
specific inputs required for each service. This entailed consulting clinicians
and making reference to treatment protocols for the key health conditions.
These inputs were then costed based on KEMSA and MEDS prices for drugs
and non-pharmaceuticals. For Vaccines and Family Planning commodities
unit prices were obtained from KEPI and the Division of Reproductive Health
respectively.

Costing entailed identifying and computing the value of drugs and other inputs
such as non-pharmaceuticals, required for each case for a particular health
condition. While these cost estimates provide a general overview of what
specific services would cost a lot more time is needed to look at each service
and related inputs including equipment and physical infrastructure. In costing
consumables such as drugs, the unit cost used did not include the cost of
delivery and handling. Hence, a 15 per cent adjustment was made to cater for
logistics and handling for all goods.

2. Assumptions on Costing Treatment

Where services provided involved adults and children, a distinction was made
between inputs required for adults and those required for children. In malaria
treatment, for example, estimation of proportion of children / adults in the total
number of cases was done in consultation with clinicians. This was necessary
to cater for differences in treatment protocols between adults and children.

The estimated proportions for various health conditions are presented in table
1. Furthermore, given that treatment of children depends on age and weight,
calculations were based on a child of average weight and age. In addition, for
each condition, estimates were made on possibility of re-attendance, where
initial treatment fails. The probability of treatment failure (1st line) was
considered and the cost of second line treatment included in the computation.




                                Page 113 of 120
          Table 1: Estimates on proportion of Children & Adult per Health Condition

                                                                Percentage
             Health Condition               Percentage Adults   Children

             Malaria                                     30%                   70%
             Pneumonia                                   20%                   80%
             URTI                                        30%                   70%
             Diarrhoea                                   20%                   80%
             Intestinal Worms                            20%                   80%
             Skin Diseases                               50%                   50%
             STIs                                       100%
                Urethritis                              100%
                GUD                                     100%
                Vaginitis                               100%


Based on this kind of computation it is estimated, for example, that the
treatment of malaria (excluding personnel costs and laboratory services)
currently costs about K Shs 25 and K Shs. 22 per adult and child case
respectively. Table 2 illustrates the costing process, moving from input to
input. In this analysis SP plus Amodiaquine (Comaquin) is taken as the 1st line
treatment. It is also estimated that 30 per cent of patients have to go to the 2 nd
line treatment that involves Quinine Injection.
       Table 2: Cost of Consumable Inputs Required in Treating a Malaria Case

                                Adults            Adult          Children         Children
                                Treatment         Treatment      Treatment        Treatment Cost
                                                  Cost
   Malaria: 1st Line
     SP (Fansidar) Tabs         3 tabs                  3.17     1 tab                       1.06
     Comaquin Tabs              9 tabs                  5.12     n/a
     Comaquin Syrup                                              30 ml.
                                                                                             2.52
     Paracetamol Tabs           18 tabs
                                                        2.76
     Paracetamol Syrup                                           45 ml                       9.00
     Sub-Total
                                                       11.05                                12.58
     2nd Line (30% of patients)
      Quinine Inj 600 mg
                                                        8.73                                 4.36
     Syringes
                                                        2.54                                 2.54
     Paracetamol                18 tabs                 1.52
     Paracetamol Syrup                                           45 ml.
                                                                                             2.70
     Needles
                                                        1.50                                 1.50
     Sub-Total
                                                       14.28                                11.10
     Total                                             25.34                                23.68




                                         Page 114 of 120
3. Cost of Consumables Per Case

Based on this analysis, average costs of consumables required for various
interventions were derived. These costs are reflected in table 3 below. For
example, maternity service per delivery is estimated to cost about K Shs. 844
in medical consumables. On the other hand PMTCT service is estimated to
cost K Shs. 284 per mother and K Shs. 1,720 for infants. These average costs
per case/client need to be multiplied by the total number of cases/clients to
derive the total cost of medical consumables. PMTCT (for infants) was found
to be the most expensive interventions per case/clients. Unless resources are
made available to health centres where deliveries take place and more
mothers deliver in these facilities this service will seriously be hampered.

            Table 3: Average Cost of Consumables per case/client

      Service                                   Adult Cost (K Shs)   Child (K Shs)
      Malaria                                           25                 24
      Pneumonia                                         52                289
      URTI                                              47                 40
      Diarrhoea                                         11                 35
      Intestinal Worms                                  5                  6
      Skin Diseases                                     26                 13
      ANC (per mother, 4 visits)                       117
      PMTC                                             284               1720
      HIV Testing                                      200
      Maternity                                        844
      STIs
        Urethritis                                     42
        GUD                                            79
        Vaginitis                                      30

4. Cost based on pre-July 2004 Utilisation Level

As already noted, the key parameters that determine cost of health services at
RHF level are the nature of health conditions and the volumes
(caseload/number of clients) involved in service utilisation. These two
parameters particularly determine the level and cost of consumables (variable
costs) in the short run. Other important factors as discussed earlier in the
chapter are the levels of personnel and cost of maintaining infrastructure
which tend to be fixed in the short run. An analysis of cost (based on service
utilisation before July 2004) and assuming fixed personnel and infrastructural
resources is presented in tables 4 to 6.




                                   Page 115 of 120
 Table 4: Average Cost of Health Services Delivery per Health Centre based on pre-July
                                2004 Utilisation Levels

                                                                              MERU        UASIN
Health Condition           ISIOLO      NAROK         KILIFI     KAKAMEGA      SOUTH       GISHU
Malaria
   1st Line                  21,967      32,514       72,836        78,470     117,644      57,108
   2nd line                  21,844      32,332       72,427        78,029     116,983      56,788
   Total                     43,811      64,846      145,264       156,499     234,627     113,896
Pneumonia                    28,924      34,949       36,636       181,736     188,967      61,382
URTI                         67,055     125,497      113,691        73,245     253,054      61,145
Diarrhoea                   200,000      15,436       36,344        20,303       8,090       2,637
Intestinal Worms                247       1,114        1,598         1,078      12,242         121
Skin Diseases                 3,126      19,260       23,737        18,128      35,413       5,288
Sub-Total                   343,163     261,103      357,271       450,989     732,392     244,470
STIs
   Urethritis                  8,390      12,585       14,263         5,034       9,229      10,068
   GUD                         4,742       6,322        9,483         7,903       9,483      11,064
   Vaginitis                   2,376       2,970        5,941         4,753       4,753       5,941
Sub-Total (STIs)              15,508      21,877       29,687        17,689      23,465      27,072
TB                             7,754      10,939       14,843         8,845      11,732      13,536
All others (Curative)         73,285      58,784       80,360        95,505     153,518      57,016
Laboratory Services           30000       30000        35000         35000       40000       35000
Total Curative               469,710     382,703      517,162       608,027     961,107     377,094
ANC                           84,532     101,321      449,358       119,316     131,869     142,246
PMTCT                      1,452,888   1,741,462    7,723,352     2,050,743   2,266,505   2,444,860
Maternity                    183,630     220,103      976,153       259,193     286,463     309,005
FP Commodities                93,409      43,795       97,521       430,498     193,674     219,121
Vaccines                     371,923     510,390      506,233       473,793      40,845     450,564
HIV Testing                   43,200           0      172,400        44,000      65,000     162,400
Outreach Services             30,000      30,000       30,000        30,000      30,000      30,000
Laboratory Services           10,000      10,000       15,000        15,000      20,000      15,000
Sub-Total (Prev &
Prom)                      2,269,581   2,657,071    9,970,018     3,422,543   3,034,356   3,773,197
Total (Drugs and Non
Pharm)                     2,739,291   3,039,774   10,487,179     4,030,570   3,995,463   4,150,290
Utilities (Water, Power,
Telephone)                    60000       60000        80000         80000       90000       80000
Maintenance of
Buildings & Equipment        50,000      50,000       50,000        50,000      50,000      50,000
General Admin
(Transport, Cleaning
etc)                         50,000     120,000      250,000       200,000     200,000     200,000
Personnel Costs
(Current Level)              684,060   1,401,100    1,221,930       889,316   1,949,465   1,633,476
Sub-Total                    844,060   1,631,100    1,601,930     1,219,316   2,289,465   1,963,476
Grand Total                3,583,351   4,670,874   12,089,109     5,249,886   6,284,928   6,113,766
Net of PMTC                2,130,463   2,929,412    4,365,758     3,199,143   4,018,423   3,668,907




                                       Page 116 of 120
  Table 5: Average Cost of Health Services Delivery per Dispensary based on pre-July
                                2004 Utilisation Levels

                                                                               MERU        UASIN
Health Condition           ISIOLO       NAROK       KILIFI       KAKAMEGA      SOUTH       GISHU
Malaria
   1st Line                  18,203       16,560     38,888          36,332     107,237     11,837
   2nd line                  18,101       16,467     38,670          36,128     106,635     11,771
   Total                     36,304       33,028     77,558          72,459     213,872     23,608
Pneumonia                    31,695       72,020     78,094          26,444     305,625     16,342
URTI                         43,842       52,720     78,326          37,957     180,730     32,284
Diarrhoea                     4,045        9,922     24,068           8,192      12,111      3,741
Intestinal Worms                384          787      2,340             699      11,600        239
Skin Diseases                 3,927        4,578     23,443          10,250      29,334      3,562
Sub-Total                   120,198      173,054    283,828         156,001     753,272     79,776
STIs
   Urethritis                 5,034        6,712     14,263           5,034       9,229      4,195
   GUD                        4,742        6,322      9,483           7,903       9,483     11,064
   Vaginitis                  3,565        4,753      5,347           4,753       4,753      7,129
Sub-Total                    13,340       17,787     29,093          17,689      23,465     22,388
TB                            6,670        8,893     14,546           8,845      11,732     11,194
All others (Curative)        28,042       39,947     65,494          36,507     157,694     22,671
Total Curative              168,250      239,680    392,961         219,042     946,163    136,029
ANC                          11,543        9,048     85,639          75,321     159,036     24,228
PMTCT                         8,928        6,998     66,237          58,256     123,004     18,739
Family Planning
Commodities                  32,884        9,729     58,902          81,221     129,976     59,159
Immunisation Vaccines       150,817      254,878    162,518         332,565     107,763     89,997
HIV Testing                                                                      24,000
Outreach Services            10,000       10,000     10,000          10,000      10,000     10,000
Sub-Total                   214,172      290,653    383,296         557,362     553,780    202,124
Total (Drugs and Non
Pharm)                      382,421      530,333    776,257         776,405    1,499,943   338,153
Utilities (Water, Power,
Telephone)                    30000        30000        40000         40000       45000     40000
Maintenance of
Buildings & Equipment        20,000       20,000        20,000       20,000      20,000     20,000
General Admin
(Transport, Cleaning
etc)                         80,000      100,000    150,000         150,000     150,000    150,000
Personnel Costs
(Current level)             257,520      317,843     269,977         344,617     871,852   365,903
Sub-Total                   387,520      467,843     479,977         554,617   1,086,852   575,903
Total Cost                  769,941      998,176   1,256,234       1,331,022   2,586,795   914,056
Net of PMTC                 761,014      991,178   1,189,997       1,272,766   2,463,791   895,317




                                      Page 117 of 120
      Table 6: Average Health Centre Cost after adjusting for Consumables and Meeting
                       Personnel Norms at Current Utilisation Levels

                                                                                                          MERU             UASIN
Health Condition                     ISIOLO           NAROK            KILIFI        KAKAMEGA             SOUTH            GISHU
a) Health Centres
Consumable (Drugs and
Non Pharm)                           2,739,291       3,039,774      10,487,179           4,030,570       3,995,463         4,150,290
Personnel Costs (Current
Level)                                  684,060      1,401,100       1,221,930             889,316       1,949,465         1,633,476
Consumables (Adjusted
                  13
upward by 25% )                      3,652,388       4,053,032      13,982,905           5,374,093       5,327,284         5,533,720
Personnel Costs (as per
norms)                               1,368,120       2,802,200       2,443,860           1,778,632       3,898,930         3,266,952
Utilities (Water, Power,
Telephone)                                60000          60000            80000               80000          90000            80000
Maintenance of Buildings &
Equipment                                50,000          50,000          50,000              50,000          50,000          50,000
General Admin (Transport,
Cleaning etc)                           50,000         120,000         250,000             200,000         200,000           200,000
Total Cost                           5,180,508       7,085,232      16,806,765           7,482,725       9,566,214         9,130,672
b) Dispensaries
Consumable (Drugs and
Non Pharm)                              382,421        530,333          776,257            776,405       1,499,943          338,153
Personnel Costs (Current
Level)                                  257,520        317,843          269,977            344,617         871,852          365,903
Consumables (Adjusted
upward by 25%)                          509,895        707,111       1,035,009           1,035,207       1,999,924          450,871
Personnel Costs (as per
norms)                                  515,040        635,686          539,954            689,234       1,743,704          731,806
Utilities (Water, Power,
Telephone)                                30000          30000            40000               40000          45000            40000
Maintenance of Buildings &
Equipment                                20,000          20,000          20,000              20,000          20,000          20,000
General Admin (Transport,
Cleaning etc)                           80,000         100,000         150,000             150,000         150,000           150,000
Total Cost                           1,154,935       1,492,797       1,784,963           1,934,441       3,958,628         1,392,677


This would particularly be more pronounced if there is a simultaneous
reduction in fees. In July 2004 there was such a perception that was
associated with lowering of fees under the 10/20 policy. The table below
shows average utilisation assuming the peak utilisation observed soon after
July 2004 was maintained. In some districts such as Kilifi and Meru South,
there was about 100 per cent increase in caseload. A similar pattern was
observed in dispensaries.




13
   in carrying out the cost analysis on inputs, not all data was available. It is estimated that the costing information
available covered about 75 per cent of key inputs required at RHF. Adjustments have to be made to cater for the
balance of 25 per cent of resources not captured.


                                                Page 118 of 120
  Table 7: Peak Outpatient Cases per Health Condition soon after July 2004 at Health
                                    Centre Level

                                                                            Meru       Uasin
Health Condition                 Isiolo   Narok       Kilifi    Kakamega    South      Gishu
Malaria                           1,530     3,462     17,952        6,473    17,376    17,848
Pneumonia                           240       282         252        754      1,104       836
URTI                              1,308     4,890     12,552        1,743    12,726     5,392
Diarrhoea                           240       600       1,572        683       246        192
Intestinal Worms                     48       114       1,236        304      3,870        56
Skin Diseases                       180     1,332       2,352       2,240     1,914       664
STIs
  Urethritis                        200       300         340        120       220        240
  GUD                                60        80         120        100       120        140
  Vaginitis                          80       100         200        160       160        200
CWC                               1,296     4,320     12,480        1,024     6,174     2,424
ANC                               1,450       726       3,828       1,104     1,050     1,928
FP                                  922     1,368       1,428       1,484     1,860     1,356
PMTCT - Mothers (Expected = 9%
of mothers)                          65        33         172         50        47         87
PMTCT – Children                     65        33         172         50        47         87
Maternity (target 60% of ANC
Mothers)                            435       218       1,148        331       315        578
HIV Testing                         216           0     1,104        210       552      1,644

The inability of the health system to respond accordingly soon after July 2004
quickly compromised service quality, resulting in gradual decline in utilisation.
This doubling in utilisation would require doubling of variable inputs
particularly drugs and non-pharmaceuticals. Simultaneously, staff and other
fixed inputs would have to be doubled in the longer term to ensure that
patients/clients received adequate care without being subjected to long
waiting time. Services such as ANC and CWC that are labour intensive would
require more staff time to guard against compromising quality.




                                   Page 119 of 120
Annex 7

Facilities selected

The selection of health centres and dispensaries from sample districts was carried
out in a random manner, except for the severely arid and large Isiolo district where
purposeful sampling will be carried out to minimise travelling. The sample facilities
are listed below.

Sample Facilities

Isiolo          Narok          Kilifi             Kakamega          Meru South     Uasin Gishu
HC              HC             HC                 HC                HC             HC
1) Merti        1) Enabelbel   1) Vitengeni       1) Shiseso        1) Mpukoni     1) Soy
                2) Nairage     2) Rabai           2) Kambiri        2) Muthambi    2) Turbo
Dispensaries        Enkare                        3) Iguhu                         3) Ziwa
1) Kipsing                     Dispensaries       4) Bushiangala*   Dispensaries   4) Ainabkoi*
2) Anti-        Dispensaries   1) Bwagamoyo                         1) Kajuki
    poaching    1) Olmesutie   2) Dida            Dispensaries      2) Kibugua     Dispensaries
3) Kulamawe     2) Megwara     3) Gotani          1) Approved       3) Kiini       1) Kipkabus
4) Oldonyiro    3) Entolntol   4) Jaribuni            Sch. Kak.     4) Mumbuni     2) GK Prison
5) Ngaremara*   4) Olchoro     5) Junju           2) Kharanda       5) Baragu          Ngeria
                5) Sekenani    6) Matsangoni      3) Namagara       6) Mukuuni*    3) Karuna
                6) Siyaipei*   7) Ngerenya        4) Shikusi                       4) Barsombe
                               8) Takaungu        5) Sivilie                       5) Kibagenge/
                               9) St. Teresa*     6) Chombeli                          Segero
                                                  7) Kuvasali                      6) Mogoon
                                                  8) Ingotse*                      7) Tugen Estate
                                                                                   8) Kimoning
                                                                                   9) Chagaiya
                                                                                   10) Osorongai
                                                                                   11) Segero*



HC = 1          HC = 2         HC = 2             HC = 4            HC = 2         HC = 4
Disp = 5        Disp = 6       Disp = 9           Disp = 8          Disp = 6       Disp = 11
* Mission       * Mission      * Mission          * Mission         * Mission      * Mission




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