Relationship Between Public Healthcare Expenditure And Selected Economic And Socio-Demographic Factors In Kenya

Abstract

Human health has improved drastically during the last century, yet grave inequalities in health persist. In Kenya, Public expenditure on health as a percentage of total government expenditure has been declining. Also Public expenditure on health as a percentage of Gross Domestic Product (GDP) has been declining. This means that access to health care has been and still is out of reach for majority of Kenyans. Increasing population and demand for healthcare outstrips the ability of the government to provide effective health services. Majority of Kenyans cannot easily access health care due to long distances they have to travel to get to health facilities, inadequate qualified health personnel, lack of medicines and more seriously the high cost since they have to make out-of-pocket payments to get health services. Per capita expenditure on public health is inadequate to meet even the most basic services such as diagnosis. This study investigated the relationship between per capita public healthcare expenditure (PHEXP) in Kenya as the dependent variable and independent variables; Real Per Capita GDP (RPGDP), Population (POPN), secondary school enrolment (SSE) and life expectancy (LFE). The specific objectives were: to determine the relationship between Gross Domestic Product and public health care expenditure, to investigate the relationship between secondary school enrolment and public health care expenditure, to evaluate the relationship between population and public health care expenditure and to determine the relationship between life expectancy at birth and public health care expenditure. Data used in the study was annual time series secondary data which was sourced from International Monetary Fund (IMF) and The Kenya National Bureau of Statistics (KNBS). The data was analyzed using STATA 10 econometric software. The study covered a period of 31 years from 1980 to 2010. The results indicated that public healthcare expenditure (PHEXP) has a positive relationship with real per capita GDP (RPGDP) and population (POPN) and a negative relationship with secondary school enrolment (SSE) and life expectancy (LFE). Only life expectancy (LFE) was statistically significant but real per capita GDP (RPGDP), population (POPN) and secondary school enrolment (SSE) were statistically insignificant. The regression results indicated that the model is a good fit, meaning that all the predictors in the model account for the variation in the dependent variable. The variables were cointegrated implying there was a long-run relationship between them. The study recommended that: First, the government should increase its budgetary allocation to the health sector based on the economic growth of the country to ensure attainment of universal healthcare; Secondly, population should be taken into consideration when making allocations to the health sector. Increase in population means increased demand for health services hence more government spending is required to meet the increased demand. Thirdly, the government should also support secondary school enrolment and adult literacy programmes as these will make the population to be knowledgeable and health conscious.