Funding Options and Financial Sustainability of National Hospital Insurance Fund, Kenya
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Date
2023
Authors
Muhumed, Mohamed Abdullahi
Journal Title
Journal ISSN
Volume Title
Publisher
Kenyatta University
Abstract
Financial sustainability has been a challenge among health care providers due to limited financial resources amidst increasing medical claims. Financial sustainability is important especially for National Medical Insurance Funds which fall under the mandate of National governments. Medical claims under the National Hospital Insurance Fund, Kenya have been on the rise in relation to contributions, hence affecting financial sustainability of the Fund. While only 25% of Kenyans have some form of medical insurance, the government finances medical services for older persons living with severe disability in addition to public secondary school students. The general study objective was to determine the effect of funding options on financial sustainability of National Hospital Insurance Fund. The study specific objectives were; to determine the effect of formal sector revenue, informal sector revenue, government medical funding programme and enhanced medical contribution scheme on financial sustainability of National Hospital Insurance Fund. The study is anchored on Group dynamics theory, financial health theory and systems dynamic theory. The study adopted explanatory non-experimental research design. The study covered the period (2016 – 2021). Secondary data was obtained from the published financial reports by National Hospital Insurance Fund which was deemed reliable and valid since National Hospital Insurance Fund is normally audited on yearly basis. The study employed descriptive and inferential statistics and multiple regression. Correlation analysis indicates that formal sector revenue and government funding have a weak negative correlation with financial sustainability, while informal sector revenue and enhanced medical contribution have a moderate positive correlation with financial sustainability. Regression results indicate that formal sector revenue, informal sector revenue and enhanced medical contribution has a statistically significant positive effect on financial unsustainability. The study found that enhanced medical contribution helps to stabilize financial status of National Hospital Insurance Fund to a great extent in comparison to other options. The study recommends that National Hospital Insurance Fund should expand its own revenue generating activities, have strategic partnerships in addition to employing appropriate financial analysis and controls for financial sustainability. The study recommends further increase in revenue streams in addition to partnering with international community. The study recommends researches in uptake of government sponsored health care which has not been fully utilized.
Description
Research Project Submitted to School of Business, Economics and Tourism in Partial Fulfilment of the Requirements for the Award of Degree of Masters of Business Administration (Finance Option) of Kenyatta University, April, 2023
Keywords
Funding Options, Financial Sustainability, National Hospital Insurance Fund, Kenya