Healthcare Financing and Financial Sustainability of National Referral Hospitals in Kenya
| dc.contributor.author | Biruri,David | |
| dc.date.accessioned | 2025-02-13T06:45:38Z | |
| dc.date.available | 2025-02-13T06:45:38Z | |
| dc.date.issued | 2024-10 | |
| dc.description | A Thesis Submitted to the School of Business, Economics and Tourism in Partial Fulfilment of the Award of Master of Science Degree in Finance of Kenyatta University October, 2024 Supervisors: 1.Caroline Kimutai 2. Nathan Mwenda Mutwiri | |
| dc.description.abstract | In the backdrop of the rising global burden of diseases, global economic uncertainties, demographic transitions, and pandemics, most national referral hospitals in Kenya are struggling to remain afloat. They are highly characterized by diminishing sources of funding coupled with declining hospitals’ net margins and financial reserves. Their pre existing financial vulnerability was exposed during the coronavirus pandemic, which almost pushed the entire public healthcare system into a near collapse. Most of them were in dire need of government emergency bailouts to meet their short-term financial needs. It is on this ground that this study strived to investigate the statistical relationship between healthcare financing and financial sustainability of National Referral Hospitals in Kenya. More specifically, it examined the statistical relationship between out-of-pocket financing, government healthcare financing, donor healthcare financing, national health insurance financing; and financial sustainability of National Referral Hospitals. It also evaluated the moderation effect of financial leverage on the relationship between healthcare financing and financial sustainability. The study hinged on resource dependence, Musgrave, demand in healthcare, resource-based view and free-cash-flow theories. Using a positivism philosophy and explanatory study design the study assessed the relationship. It adopted a generalized least squares panel model with random effects and used a census sampling design to sample all five National Referral Hospitals. The study relied on quantitative secondary data for the period 2019-2021 obtained through a secondary data abstraction tool from the hospital’s financial reports and other government agencies. The study utilized both descriptive and inferential statistics to analyse the collected data using EViews analytical applications. The study performed a number of diagnostic tests that included tests on normality, multicollinearity, heteroscedasticity, and stationarity. The findings revealed that out-of-pocket healthcare financing had a negative and statistically significant relationship with financial sustainability of National Referral Hospitals. The study found out-of-pocket to be regressive and resulted in inequity in healthcare utilization and catastrophic healthcare expenditure that impaired households’ current and future abilities to meet their healthcare financial obligations. Based on this the study recommended a set of ceiling caps on out-of-pocket expenditure in line with World Health Organizations’ threshold of 10% of total healthcare financing. The study further revealed that government healthcare financing had a strong positive and significant relationship with financial sustainability of National Referral Hospitals. This emphasized the indispensable role of government in healthcare financing of National Referral Hospitals. The study recommends that the government should consider increasing the amount of funds allocated to health sector to prevent a financial crisis in the healthcare system. The statistical evidence further established that donor healthcare financing had a strong negative and statistically significant relationship with financial sustainability as compared to out-of-pocket financing; which can be largely attributed to diminishing donor funding and overreliance of this form of financing that increase financial vulnerability of these hospitals. The inference further indicated that National Health Insurance Fund financing had a positive and most significant relationship with financial sustainability. To alleviate healthcare financing disequilibrium and its subsequent impact on financial sustainability of National Referral Hospitals, the study proposed a review and realignment of the current healthcare financing policies, laws, and reforms. The study recommends the establishment of a robust and optimal National Health Insurance Policy and adoption of innovative sources of financing public healthcare, such as the use of social impact bonds to finance various health programs with severe social impacts like lifestyle diseases. However, more research on social impact bonds is required | |
| dc.description.sponsorship | Kenyatta University | |
| dc.identifier.uri | https://ir-library.ku.ac.ke/handle/123456789/29572 | |
| dc.language.iso | en | |
| dc.publisher | Kenyatta University | |
| dc.title | Healthcare Financing and Financial Sustainability of National Referral Hospitals in Kenya | |
| dc.type | Thesis |