Table 2 Key input data and assumptions for UHC financing scenarios
Input | Contributory scenario | Non-contributory scenario |
|---|---|---|
Population | 1. Baseline total population size is 44.4million [27] and growing at an annual rate of 2.5% [28] to reach 56.8million and 67.6 million in 2023 and 2030 respectively. 2. At baseline, the distribution of the total workforce was as follows: formal sector workers (23.2%), pensioners (5.5%) and informal sector including indigents (71.3%) [29]. The annual growth rate in formal sector employment is estimated at 0.5% on average from the baseline until 2030, although private sector employment would grow at a much faster rate than in the public sector. The informal sector workforce (which also includes indigents) was estimated to decline at an annual rate of 0.37% between 2013 and 2030 based on trends since 2004 [29–31]. Twenty percent of the population is considered indigent at the baseline and this followed a similar declining pattern as the informal sector. The National Bureau of Statistics considers indigents as a part of the informal sector hence the similar growth trajectory. 3. Estimates on growth rates of wages were set at 5% per annum for the formal sector and pensioners at 3% per annum [32, 33]. | |
Macro-economy | Real GDP growth rate is estimated at an average of 5.0% per annum between 2013 and 2030 and interest rates were set at 5% per annum on average [34]. | |
Health care unit costs | Unit costs for outpatient and inpatient services for public, non-profit and for-profit facilities were estimated based on evaluation of local studies on unit costs [35]. The unit costs were inflation-adjusted to 2013 prices and projected to estimate prices for 2030. However, a higher growth rate (14.6%) in unit costs was used for public sector services because these are currently under-resourced and significant increase in public funding is required to make quality services available and affordable for all. Average unit costs for private facilities increased at half the rate for public sector (i.e. 7.3%) from 2007 to 2013. The unit costs were as shown in Table 3. | |
Utilization rates | Utilization rates were based on analysis of government documents and comparative analysis of the rates in other low- and middle-income countries (LMIC). The rates, on average, were 3.1 outpatient visits per capita per annum at the baseline [6] increasing to 4.0 in 2023 and finally to 4.3 OP visits per capita per annum in 2030. Average annual inpatient days per capita were 0.255 at baseline, 0.287 by 2023 and 0.305 IP days per capita per year by 2030. The utilization rates were projected until 2030 based on current utilization trends in Kenya and triangulated by utilization data from developing countries such as Rwanda [36] and Thailand [37]. | |
Health insurance | 1. Formal sector contributions gradually increased from the current level of 2.4% of gross pay at the baseline [38] to a more realistic contribution rate of 6.5% from 2017 onwards 2. Pensioners contributions were varied from 2.4% of monthly pensions at the baseline to 4% from 2017 onwards 3. Contributions from the informal sector were set at KSh 6000 per household per annum at the baseline (or KSh 1200 per insured adult, child and principal contributor considering that the average household size consists of five people). The KSh 6000 is the new NHIF contribution rate for the informal sector [38]. These are then increased with inflation 4. Annual government subsidies per exempted individual were put at KSh 3000 per annum at baseline. This is based on estimated current government health expenditure per capita. With an average household size of 5, this would be equivalent to KSh15000 per household at the baseline. The subsidy amount was automatically increased in the model in line with inflation. Note: The KSh6000 is the new NHIF contribution amount per household as from April 2015 and already seems like it could be high for many informal sector workers and the KSh15000 is based on current government spending on health, divided by the ‘uninsured’ (informal sector & indigent population). Government contribution per exempted person is higher than contributions from the informal sector because contributions from the latter are regarded as what they can afford and not necessarily what should adequately fund a given package of care. 5. Administrative costs gradually decreased from 12% of total revenue at the baseline to 8% by 2023 and 7% from 2024 onwards. Although the NHIF administrative costs are currently very high (over 35% of total revenue) the study opted for a more realistic figure of 12% at the baseline given that NHIF data validity and reliability is questioned; i.e. large surplus is subsumed under administrative costs [39]. The 12% estimate at the baseline is also within the range of 2–17% of total expenditures on administrative costs in middle-income countries [39]. We use the international best practice to estimate administrative costs for the entire period of the simulation even though the WHO-GTZ mission to Kenya in 2004 recommended administrative costs at 5% of total health insurance expenditure within five years of implementation. The international best practice for administrative costs should range from 10 to 12% of total health insurance expenditure (MOH-PER, 2007) so based on the international best practice it was estimated that administrative costs for the contributory system would be 12% for the first two years of implementing UHC then with efficiency improvements continue to drop off to 10%, 9% (2018–2020) and 8% (2021–2023) and 7% from 2024 to 2030. | 1. Formal sector contributions gradually increased from 2.4% of gross pay at the baseline to stand at 6.5% from 2017 onwards 2. Pensioners’ contributions were varied from 2.4% of monthly pensions at the baseline to 4% from 2017 onwards 3. Government subsidies per exempted individual were put at KSh 3000 per annum at the baseline and automatically increased in the model in line with inflation 4. All informal sector workers and indigent populations were exempted 5. Administrative costs reduced from 12% to stay at 5% throughout the simulation consistent with estimates for such costs under non-contributory financing for UHC [39]. |