EFFECT OF NATIONAL HOSPITAL INSURANCE FUND OUTPATIENT SCHEME ON FINANCIAL SUSTAINABILITY OF PUBLIC HOSPITALS IN KENYA A CASE OF SUB-COUNTY HOSPITALS IN NAKURU COUNTY, KENYA

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.