02.02.01. How is the health system financed? | Kenya

02.02.01. How is the health system financed? | Kenya

03 Mar 2022

Health care in Kenya is financed through three main sources (Munge & Briggs, 2014):

  • Direct payments (out-of-pocket payments (OOP)): This forms the highest proportion out of the sources of health-care financing for public health expenditure and fully for private health expenditure,
  • Government expenditure (through taxation, employer schemes, health insurance etc.),
  • Donors

OOPs are charged for health care services in public and private health institutions and accounted for nearly 30% of the total expenditure on health, thus reducing access to care. However, recently there has been an increase in government investment to reduce the financial burden on the poor and vulnerable populations through abolishing user fees in public health facilities (e.g., Makueni County), the provision of free maternity and the introduction of a Health Insurance Subsidy Programme. Half of the total health budget is allocated to the three referral hospitals and the remaining resources are allocated to the 47 counties. Payments are provided in block grants, depending on the size of the population, poverty levels, land share etc. Apart from the county Departments of Health budget from the national government (forming 36.4% of the total budget), the counties also collect their own revenue through households (37.3%), donors (16.3%) and NGOs (10.1%) (Maina et al., 2016). Donor funding is mainly concentrated in areas with high HIV prevalence such as Siaya, Kisumu, Migori, Mombasa and Turkana (T. Maina et al., 2016). This funding is channelled either through the government budgetary system referred to as “on-budget” or through the extra-budgetary known as “off-budget” via donor administered programmes e.g. the World Bank Multi-Country HIV/AIDS Programme (MAP) or NGOs (KNASA & NACC, 2014). The private sector is mainly funded by donors through grants/programmes to NGOs, health insurance (Marek et al., 2005) and out-of-pocket payments.


KNASA, & NACC. (2014). Kenya National Aids Spending Assessment Report for the Financial Years 2009/10-2011/12. https://unaids-test.unaids.org/sites/default/files/unaids/contentassets/documents/data-and-analysis/tools/nasa/20141017/kenya_2009_en.pdf

Maina, T., Akumu, A., & Muchiri, S. (2016). Kenya County Health Accounts: Summary of Findings from 12 Pilot Counties. Washington, DC. https://www.healthpolicyproject.com/pubs/7885_FINALSynthesisreportoftheCHA.pdf

Marek, B. T., Farrell, C. O., Yamamoto, C., & Zable, I. (2005). Trends and Opportunities in Public-private Partnerships to Improve Health Service Delivery in Africa. Human Development Sector Africa Region, The World Bank. https://documents1.worldbank.org/curated/en/480361468008714070/pdf/336460AFR0HDwp931health1service.pdf

Munge, K., & Briggs, A. H. (2014). The progressivity of health-care financing in Kenya. Health Policy and Planning, 29(7), 912–920. https://doi.org/10.1093/heapol/czt073