Abstract:
Health insurance is very crucial in improving access to healthcare. The National
Hospital Insurance Fund outpatient scheme was incepted with the object of addressing
financial difficulties faced by the member of the Fund when seeking healthcare
without the need to be admitted to health facilities. The contractual agreement
between the Fund and the health facilities mandated to offer outpatient services has
hitherto been faced by a couple of financial hurdles that have rendered provision of
quality healthcare by these health outlets challenging. In tandem, this study linked the
aforestated scheme to financial sustainability of Sub-County health facilities in
Nakuru County. The study examined the effect of NHIF outpatient service capitation,
NHIF outpatient reimbursement process, utilization levels of NHIF outpatient
services, and administrative costs on financial sustainability of the foregoing health
facilities. The financial intermediation theory and the financial health model guided
the study. A descriptive survey design was adopted. The management employees
working in the public health sector in Kenya were targeted. The accessible population
constituted the 183 management staff working with the 6 Sub-County hospitals in
Nakuru County. Stratified random sampling technique was adopted to obtain 81
respondents from the study population. The study used a structured questionnaire to
collect data and a secondary data collection sheet. The questionnaire was pilot tested
to determine both its validity and reliability. The collected data were subjected to
necessary analysis with the facilitation of the Statistical Package for Social Sciences
Version 24 programme. Data analysis encapsulated both descriptive and inferential
statistics. The results of the analysis were presented in form of tables. It was found
that by increasing the NHIF capitation, reimbursement process, and utilization levels
of the NHIF cover there was little likelihood to increase financial sustainability of
Sub-County hospitals. However, the study revealed that by increasing the
administrative costs, financial sustainability was likely to be reduced to a small extent
but substantially. The study also established that mitigating factors hardly affected the
financial sustainability of the aforementioned health facilities. The public health
facilities had not recorded improved cash flows nor reduced their various costs. It was
found that the NHIF outpatient scheme could explain 25.0% of the variation of
financial sustainability of the aforementioned hospitals. It was concluded that NHIF
capitation, reimbursement process, utilization levels of NHIF outpatient scheme, and
mitigating factors have little effect on financial sustainability of the surveyed health
facilities. However, it was inferred that, though administrative costs did not negate
financial sustainability in a big way, reducing them was likely to have far-reaching
implications on financial sustainability of Sub-County hospitals operating in Nakuru
County. The study advises the hospitals to ensure that the utilization level of the
scheme is proportional to the capitated amount and also the reimbursed funds. It is
also recommendable to both national and devolved governments for increased
budgetary allocation to all the public health facilities in Kenya.
